Which of the following is NOT a required step when initiating direct deposit for an employee?

Which of the following is NOT a required step when initiating direct deposit for an employee?

• A. Receiving financial institution routing number
• B. Prenotification
• C. Getting authorization from the employee
• D. Receiving employee's bank account number

Answer: (B)

Direct deposit setup hinges on three essential pieces: obtaining the employee’s authorization, and collecting the bank routing number and the employee’s account number. With these in hand, funds can be routed via the ACH system to the correct account. Prenotification, which is a test entry used to verify that the routing and account numbers are valid before live deposits are sent, is optional rather than required. It serves as a safeguard, but you can initiate actual deposits without it if you have the employee’s authorization and the correct banking details. Therefore, prenotification is not a mandatory step. The other two elements—getting authorization and obtaining the routing and account numbers—are required.

Direct deposit setup hinges on three essential pieces: obtaining the employee’s authorization, and collecting the bank routing number and the employee’s account number. With these in hand, funds can be routed via the ACH system to the correct account. Prenotification, which is a test entry used to verify that the routing and account numbers are valid before live deposits are sent, is optional rather than required. It serves as a safeguard, but you can initiate actual deposits without it if you have the employee’s authorization and the correct banking details. Therefore, prenotification is not a mandatory step. The other two elements—getting authorization and obtaining the routing and account numbers—are required.