How important is the condition of a bank note?

The condition of a note will affect its value dramatically. You should therefore familiarise yourself with the standard gradings of condition. Basically, they are as follows:-

‘UNC’ = ‘Uncirculated’ (perfect mint condition)

‘XF’ = ‘Extremely Fine’ (almost perfect – a single crease perhaps)

‘VF’ = ‘Very Fine’ (a few creases and folds, but no tears. Still fairly crisp.)

‘F’ = ‘Fine’ (well used – edge tears, discoloration, etc. Crispness may have gone.)

‘VG’ = ‘Very Good’ (well worn, with tears, dirt, pinholes, etc. Probably somewhat limp.)

‘G’ = ‘Good’ (limp, small pieces missing, very dirty, graffiti, etc.)

It is now common practice to use the letter ‘A’ prefixing these grades when the note described is ‘almost’ up to the indicated grade. For example an ‘AUNC’ or ‘AU’ note is almost uncirculated. In other words, it is almost perfect, with only the slightest fault, such as a bend, a very slight discoloration of the paper, or a tiny edge nick for example. However, it is too good to be classed as XF or XF+. The same strict grading standards apply, regardless of a note’s age. Some dealers wrongly think that very old notes are allowed a little flexibility of grading and will make such misguided statements as “It’s XF, considering its age”. This is misleading; an UNC note has to be the same as it was when if left the printing press, whether it is 100 days old or 100 years old. Usually, an UNC note is worth at least twice as much as it would be in VF. This is because UNC examples are almost always harder to obtain than well-circulated ones. Unless your budget is unlimited, you will therefore have to make a choice between quantity and quality of condition at some stage. To help you better understand the grading of condition, see our Collecting Tips sheet No. 1. And for a better insight into how condition affects value, see our Collecting Tips No. 4 (both sheets are free on request with orders totalling $40 or more).