HOW TO GRADE BANKNOTES

Grading Standards

Banknote Grading

Banknote Grading is a subjective topic, that will vary from person to person.  While there are grading companies that can break this dilemma, there will still be some doubts.  The grading firms still rely on the perspective of the person assessing the banknote, this is subjective to his/her own perspective following their company standards.

While there is no “gold standard” for grading banknotes, we can at least agree on obvious observations.  As such, when you see folds or creases, or some repair done to the banknote, the grading scale becomes clearer. In this example the banknote can fall between Good to Fair (see chart below). Whereas the new released notes from a bank, will notably be between Uncirculated to About Uncirculated.

Below is a good measure to grade banknotes.  While these are also subjective, they pretty much follow the IBNS (International Banknote Society) standards.


Edges Corners Folds & Creases Paper & Color Tears Holes Missing Pieces
UNC
Uncirculated
Sharp Edges must be
maintained.
Sharp Corners must be
maintained.
Paper must be smooth
and crisp.
No wrinkles or creases
allowed.
Paper must be clean
with original sheen.
Colors must be fresh
and unfaded.
No tears allowed. No holes allowed. No missing pieces
allowed.
AU
About Uncirculated
Sharp Edges must be
maintained.
Sharp Corners must be
maintained.
No creases allowed.
May have either 1 slight
bend in center, OR 1
counting fold.
Paper must be clean
with original sheen.
Colors must be fresh
and unfaded.
No tears allowed. No holes allowed. No missing pieces
allowed.
EX/XF
Extremely Fine
There may be the
slightest sign of wear
where a fold meets an
edge.
Very slight corner
rounding.
2 slight bends or 1
crease allowed.
Slight wear where a fold
meets the edge.
Minimal dirt
and color smudges.
Paper must be relatively
crisp.
No tears allowed. No holes allowed. No missing pieces
allowed.
VF
Very Fine
Edges may show slight
wear.
Corners may have wear
but not be fully
rounded.
Moderate creases are
typical
Minimal dirt
and color smudges.
Paper must be relatively
crisp.
Edge tears must not
enter the border of the
design.
No holes allowed. No missing pieces
allowed.
F
Fine
Excessive handling on
edges and corners
typical.
Will typically show
rounding on corners.
Many folds, creases and
wrinkling.
Not excessively dirty.
Colors dull. Paper has
some softness.
Minor tears into the
border area, but may
not extend into the
design
No center holes
allowed.
1-2 Staple holes may be
allowed.
No missing pieces
allowed.
VG
Very Good
Much wear along edges
evident.
Will typically show
rounding on corners.
Many folds, creases and
wrinkling.
Some discoloration and
stains present.
Paper may be quite
limp
Minor tears may extend
into the design.
Small center hole
allowed.
Staple and pin-holes are
usually present.
No missing pieces
allowed.
G
Good
Much wear along edges
evident.
Will typically show
rounding on corners.
Multiple folds and
creases found
throughout.
Paper probably quite
limp.
Colors may be faded.
Writing on note is
common
May have several tears. Center hole may often
present at intersections
of creases. Staple holes
may be present.
Small pieces may be
missing.
F
Fair
Much wear along edges
evident.
Will typically show
rounding on corners.
Many folds, creases
present
Paper probably quite
limp.
Colors may be faded.
Writing on note is
common
May have several edge
tears.
Center hole may often
present at intersections
of creases. Staple holes
may be present.
Larger pieces may be
missing.
P
Poor
Edges may have been
trimmed.
Corners rounded, may
be torn off
Many folds, creases
present
Paper totally limp and
dirty. Colors usually
faded and design hard
to see.
Writing on note is
common.
May have several tears. Center hole may often
present at intersections
of creases. Staple holes
may be present.
May have large pieces
missing.
May have tape.

Thanks to David Lok from banknoteden.com for sharing the grading guide.