Micro-deposits are small sums 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 it is the correct account.
Micro-deposits might show up on your bank statement as a temporary credit of anywhere between $0.02 or $0.40. They are also usually deposited in pairs—so, your statement would show two micro-deposits to your account within one to three business days of linking your accounts.
Banks and other financial institutions use micro-deposits as a security measure. Specifically, they’re used to verify account ownership.
For example, if you’re attempting to link your bank account to another financial account (like an investment account), the new financial institution will want to make sure it has the right connection to another account. So, it will do a test run by initiating a micro-deposit.
A customer will be notified that a micro-deposit has been sent to his or her bank account, and will then receive a notification to verify the amount of the deposit by logging into the account. Once the customer has verified the amounts, the initiating party will withdraw the small deposits.
As micro deposits are used in IAV ( Instant Account Verification ), lets compare that in both Yodlee and Plaid
Yodlee provides two options:
Account validation and verification from Envestnet | Yodlee happens in real-time without requiring micro-deposits, routing numbers, or bank account numbers. Plus, account linking is intuitive, fast, and secure for a better user experience with Envestnet l Yodee FastLink.
Quickstart Guide: https://www.yodlee.com/account-verification
In the challenge deposit verification (CDV) process, Yodlee makes two micro deposits and a debit of amounts less than one dollar to the consumer's account by using the account number and routing number provided by him/her. Once the micro deposits and the debit are posted to the account, the consumer must check his/her statement or online transaction record to determine the exact amounts of the two deposits and the debit. The consumer must then return to the account verification application and input these amounts to confirm account ownership.