R01

What Does ACH Return Code R01 Mean?

ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.

ACH Return Code R01, commonly known as "Insufficient Funds," is a standard code used in Automated Clearing House (ACH) transactions to indicate that a payment or transfer was unsuccessful due to insufficient funds in the account.

How To Address ACH Return Code R01

Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.

For example, if your business is attempting to initiate an ACH debit for $100, but the customer you are debiting only has $50 in their account, the bank would return the transaction with code R01. The customer’s bank must return the transaction with code R01 within 2 banking days.

This return code serves as a notification to the originator of the transaction that the payment could not be processed due to insufficient funds. The originator is then responsible for resolving the issue with the account holder and, if applicable, reinitiating the transaction once the necessary funds are available.

If you encounter R01, there are a few methods you can use to try and address the problem.

• Submit the payment request again.
• Request an alternate payment method to complete the transaction.
• Dispute the return code with the ODFI (note: this will not be a viable solution in many cases).

What Is An ACH Return Code?

ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by Nacha, the governing body for the ACH network.