Banknote Grading Explained
A banknote is more than paper—it is history you can hold. But two notes from the same country, year, and design can have very different values depending on condition. That is where grading comes in.
At Gary’s Coin Shop, we believe every collector should understand how banknotes are evaluated, from circulation wear and folds to colour, centering, paper quality, and professional certification. This guide breaks down banknote grading in a clear, collector-friendly way so you can buy, sell, and collect with greater confidence.
Grading Guidelines Guide
The grade of a banknote is one of the most important factors in determining its value. Grading reflects the overall condition, quality, and amount of wear a note has received over time. By understanding the main features used in grading, collectors can better evaluate a banknote’s appearance, preservation, and market value.
Banknotes are commonly graded on a numerical scale, with higher grades indicating better condition. While professional grading services use detailed standards, the following key areas can help you understand what to look for when examining a note.
General Condition
This includes the overall cleanliness and eye appeal of the banknote. Important factors include wear to the corners and edges, surface dirt, stains, tears, pinholes, staple holes, perforations, tape repairs, writing, ink marks, bank stamps, company stamps, or other forms of damage. Any issue that affects the appearance or originality of the note can lower its grade.
Paper Firmness
A banknote’s paper quality is very important. Higher-grade notes usually feel firm, crisp, and original, with strong paper fibers. Notes that feel soft, limp, overly handled, washed, pressed, or flattened may receive a lower grade, even if they appear clean at first glance.
Folds and Handling
Folds, bends, ripples, counting marks, and handling creases all affect grade. A single strong fold can significantly reduce a note’s condition, while multiple folds or heavy circulation marks indicate greater wear. Uncirculated notes should show no evidence of folding or handling.
Colour and Design Clarity
Strong colour, brightness, and sharp detail are important signs of a well-preserved banknote. Collectors look for clear printing, vivid colour intensity, and strong design details, including portraits, landscapes, signatures, serial numbers, dates, borders, and background patterns. Faded colours, dull paper, smudging, or weak design clarity can reduce the grade and overall value.
Understanding these grading elements can help collectors make more informed buying and selling decisions. For rare, valuable, or high-grade notes, professional third-party grading is recommended to confirm authenticity, condition, and market confidence.
General
Firmness
Folds
Colours
G - (Good)
Major signs of circulation, dirt, tears and perforations or major stamp mark may be present
No firmness at all.
Folds and major counting marks.
Altered colors and details deleted. Sometimes blackened banknote.
VG (Very Good)
Major signs of circulation, dirt, tears and perforations or major stamp mark may be present.
Little or no firm.
Folds and major counting marks.
Pale colors and details often altered and deleted.
F (Fine)
Signs of wear on corners and edges, but still a clean banknote.
Used fiber with little firm.
Several folding marks and major and minor counting marks.
Less intense colors and signs of wear on the details.
VF (Very Fine)
Signs of wear on corners and edges, but still a clean banknote.
Fibers slightly worn, maintaining a certain firmness.
Several folding marks and major and minor counting marks.
Less intense colors and signs of wear on the details.
EF (Extremely Fine)
Without alteration.
Broken fibers by a honest fold in the center, but intact elsewhere.
A major fold in the center. Can also show up two or three counting marks.
Bright colors and details present.
AU (About Uncirculated)
Without alteration.
Firm.
A major ripple (no fold) OR slight counting marks.
Vivid colors and details present.
UNC (UNCirculated)
The bill can be offset with near intact corners and edges. Must not have been restored or pressed.
Firm, almost perfect.
Can show 3 minor defects (3 demerit points). The marks left by binding machines or marks left by ATMs are acceptable.
Bright colors and attractive bill to the eye. Less bright colors on older banknotes are acceptable.
CUNC (Choice UNCirculated)
The bill can be offset with near intact corners and edges. Must not have been restored or pressed.
Firm, almost perfect.
Can show a minor defect (1 demerit point).
Bright colors and attractive bill to the eye. Less bright colors on older banknotes are acceptable
GUNC (GEM UNCirculated)
Centered bill with intact corners and edges. Must not have been
Firm, almost perfect, the paper is fresh and bright.
None.
Bright colors, bright and attractive bill to the eye.
Beyond the ordinary
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