What are Micro-Deposits, And Why Does Stash Use Them?

What are micro-deposits and what are they used for?

Micro-deposits are small amounts of money that are transferred online, from one financial account to another. The deposits are typically less than $1 and are sent to your account by another financial institution to verify its ownership and validity.

For example, if you’re attempting to link your bank account to another financial institution (like Stash), the financial institution will use micro-deposits to make sure it is establishing a connection to a legitimate account, with the same verified account owner, and that the account has the ability to send and receive funds.

A customer will be notified that a micro-deposit has been sent to their bank account, and will then receive a notification to verify the micro-deposit amounts or transaction code to complete the link with the other financial institution. Once the customer has verified the micro-deposits, the initiating party may withdraw them automatically.

Why Stash uses micro-deposits

Stash uses micro-deposits for the same reason any other financial institution does: to verify a customer’s external bank link.

When you sign up to use Stash, you’ll be asked to link your bank account so that you can transfer money on and off of Stash’s platform. Stash uses Plaid for external bank linking services. With Plaid, you may be able to link your bank instantly using your online banking username and password. However, some banks only support linking through micro-deposit verification. You may be asked to enter your account and routing numbers so that we can send micro-deposits to your account to verify ownership before you can start moving money on Stash. The process usually takes one to two business days.

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