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Grading Paper Money
By Allen G. Berman, Warman's Coins & Paper Money
April 26, 2011


State of preservation is as important for paper money as it is for coins. Paper money is primarily graded to describe the amount of wear, but other factors can influence value. Many of the terms used to describe the grades of paper money are the same as for coins. Of course the physical nature of paper requires a whole different set of definitions. They are briefly described here.

Crisp Uncirculated (CU) - This is a note that is pristine as issued. It is literally crisp, with sharply pointed corners. It must have absolutely no folds, tears, or edge rounding. It can have no stains or staple holes.

Extremely Fine (XF) -This is a particularly nice note with only the slightest sign of wear. It will still be crisp to the touch. Slight rounding of the corner points is possible but no significant folds or creases. No tears, stains or staple holes at all. (A convenient method of detecting creases in a note is to hold the note pointed at a narrow light source and look at it from an acute angle, though not directly in the direction of the light.)

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Very Fine (VF) - This is a nice clean note with obvious but moderate signs of wear. Creases that break the ink will be visible, but generally only one in each direction, and neither crease too deep. Its corner points will be dull. While not limp, it will have only some of the crispness of better-grade notes. No significant stains are visible.

Fine (F) - This is a worn but not worn out note. It has no crispness left. It will have heavy creases, but none that threaten the structural integrity of the note. Its edges may not be perfectly smooth, but are not irregularly worn. Trivial ink marks and smudges are acceptable.

Very Good (VG) - This note is worn and limp. It has serious, deep creases. The edges are worn and not even. Some ink marks or smudges are visible. Tiny tears may be present but no parts missing. Small staple or pinholes are acceptable.

Good (G) - This condition is not considered collectible for most purposes. Only the rarest of notes in this grade could find a home with most collectors. It is usually limp, heavily creased, stained, ripped and pinned or stapled. Some of the creases will permit spots of light to shine through the note at their intersections.


The most important thing to know about handling currency is to NEVER FOLD PAPER MONEY. This instantly reduces its value. When in doubt as to whether a note has value or not, place it flat in a book until you can consult a numismatist or coin dealer. Do not carry an interesting note around in your wallet. When handling a note remember that its most fragile parts are its corners. Never touch them. Also, never repair a tear in a note with tape. The tape usually is a greater detriment to the note’s value than the tear.

Attempts to clean a note are also likely to cause damage.


Detecting counterfeit notes is not as difficult or as mysterious a business as many presume. Also, many of the methods used by merchants are so inefficient as to be of no value.

First it must be realized that, almost since the beginning, U.S. paper money has been printed not on paper but on cloth. It is part cotton and part linen with some silk. The silk is in the form of minute red and blue threads which dive in and out of the surface of the note. A color copier may be able to reproduce the colors of these tiny threads, but it cannot reproduce the texture of them entering and leaving the surface of the note. Another key to detecting counterfeits is crispness of the ink in the design. Images and lines should be sharp and distinct.

Most counterfeit bills passed in circulation are accepted not because the counterfeits are deceptive, but because little or no effort is put into determining if they are real at all. In recent years, Federal Reserve Notes have incorporated many new counterfeit-detection devices. These are fully described in that section.

Real notes have been used occasionally to create counterfeits. A counterfeiter will take the value numbers from the corners of a note and glue them to a note of a lower face value. Such notes will often feel too thick or irregular at the corners. More importantly, such a criminal is presuming the recipients will pay virtually no attention to the notes they are accepting. Such counterfeits can be detected by even a brief comparison with a real note.

Certain practices are designed to take an authentic note and make it appear to be in a better grade of preservation than it is. These include ironing a note to make it look less worn, and expertly gluing tears. Light will pass through a glued repair differently than through undamaged currency.

When choosing a dealer in rare currency, make sure they have the skills to know if a note is real, and the ethics to accept it back if it is not. There are specialized organizations that enforce codes of ethics. Two of the largest are the International Banknote Society (IBNS) and the Professional Currency Dealers Association (PCDA). These insignia in advertising indicate that the dealer is a member.

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