How to Grade Paper Money

Start with the folds

Hold the note at an angle under a single bright light, like a desk lamp. Tilt it slowly. Folds show up as lines that catch the light. Count them and note which way they run. Corner folds count less than folds through the design. A center fold is the most common.

Notes are graded mostly by circulation. Folds are the plainest record of circulation. A note that has been folded once into a wallet and never used again can still grade in the 50s. A note folded into quarters and carried for years drops into the 20s and 30s.

The grade bands in plain words

• Uncirculated (60 to 70): no folds through the design. The higher grades need good centering, sharp corners and no handling. A 65 or better is a Gem.
• About Uncirculated (50 to 58): looks nearly new but has one or two folds, or a few corner folds, through the design.
• Extremely Fine (40 to 45): two or three folds, one of which may be horizontal, with crisp paper.
• Very Fine (20 to 35): several folds, often four to ten, with some crispness left and perhaps light soiling.
• Fine (12 to 15): considerable circulation, rounded corners and possibly small edge splits, but whole, solid paper.
• Very Good and Good (4 to 10): heavily worn, limp, with splits, stains and sometimes small pieces missing.

Crispness and embossing

Intaglio printing pushes ink into the paper under heavy pressure. On a fresh note you can feel the design slightly raised on the face and see it pressed into the back. That embossing is one of the best signs of an original note. It wears down with circulation and disappears when a note is pressed.

Crisp paper also has a "body." Give a new note a gentle flick and it holds its shape. Limp, cloth-like paper means heavy use or a trip through the laundry. Don't snap a note to test it, though. A gentle bend tells you enough.

What EPQ means

EPQ stands for Exceptional Paper Quality, a designation used by PMG. It means the grader considers the note original: it hasn't been washed, pressed, repaired or treated to look better. Normal wear for its grade is fine. PMG requires EPQ for grades of 65 and above. It checks for it on notes from Very Fine 20 upward.

PCGS Banknote uses a similar designation called PPQ, for Premium Paper Quality. Either one tells a buyer the paper is as it left circulation, which collectors pay extra for at every grade.

Washed and pressed notes

People wash notes to remove dirt and press them to hide folds. Both tricks aim to bump a note up a grade. Both leave marks. Pressed notes lose their embossing and look flat. Folds still show as broken fibers when tilted under light, even if the crease itself is gone. Washed notes often have muted ink, a slightly fuzzy look to fine lines and paper that feels too soft or oddly stiff.

A grading service will not give EPQ or PPQ to a processed note. PMG may also flag serious problems with a NET grade, which lists the issue on the label. If you buy raw notes, assume any note that looks too clean for its age has been worked on until you can check it closely.

Problems that limit a grade

Some faults hold a note back however few folds it has: pinholes, tears, missing corners, ink or pencil writing, rust from paper clips, tape or tape residue, stains and trimmed margins. Old bank teller stamps and pinholes are common on large-size notes. Collectors accept them more readily there, but they still count.

When is third-party grading worth it?

PMG and PCGS Banknote are the two major US paper money grading services. They authenticate the note, assign a number grade, note paper quality and seal it in a protective holder. A graded note is easier to sell because the buyer doesn't have to trust your eye.

Grading has a fee, so it only makes sense for notes in the collector premium band or higher: large-size notes, scarce small-size types, short-run stars, strong fancy serials and real errors. A circulated Series 1957 silver certificate isn't a candidate. Send notes flat in sleeves and never try to improve one first.

Frequently asked questions