In currency collection, there are two types of bills: circulated and uncirculated. To qualify as one or the other, a bill must meet very specific criteria. Those criteria help to determine its worth. One question bill collectors have is whether uncirculated or circulated bills are more valuable.<\/p>\n\n\n\n
In almost every case, an uncirculated bill is more valuable than a circulated bill. The exception of a circulated bill being more valuable than an uncirculated bill is when it\u2019s rare or has historical significance. These exceptions, however, prove the rule of uncirculated bills being more valuable.<\/strong><\/p>\n\n\n\n Of course, when a circulated bill is worth more than an uncirculated bill, the difference in value can be significant. Ordinarily, though, an uncirculated bill is more attractive, desired, valuable, and in better shape. Below, we cover uncirculated and circulated bills and what drives value.<\/p>\n\n\n\n Most people regard bill currency as all the same<\/strong>, each indistinguishable from the other. If one examines a bill, they might take note of the signatories on it or the date it was minted, but generally, as long as the bill helps buy stuff they want, all bills are the same. To a collector, it is a different story.<\/p>\n\n\n\n Just like there are uncirculated coins, there are uncirculated bills<\/strong>. The majority of bills, like coins, are in circulation. Uncirculated bills have a special status with collectors and some investors. There are several reasons for their special status.<\/p>\n\n\n\n As the name implies, uncirculated bills are bills that are withheld from circulation<\/strong>. There are several reasons a bill might be withheld from circulation. Those reasons include being part of a special run of bills reserved for collectors, post-printing damage, a printing mistake, or a stamping error.<\/p>\n\n\n\n Of all these reasons, a reserved print run for collectors is the most common<\/strong>. Most rare would be a printing mistake because of the quality assurance processes that are in place to verify that a print is exactly as planned.<\/p>\n\n\n\n Regardless of the reason that a bill is uncirculated, barring an external influence, it is more valuable to a collector than a bill that has been in circulation<\/strong>.<\/p>\n\n\n\n To qualify as uncirculated, a bill must never have been in circulation or intended to be in circulation<\/strong>, not be available to the public on the currency circulation schedule, and available for private purchase. For these reasons, a bill is considered uncirculated, even if compliance with those criteria is the result of an error.<\/p>\n\n\n\n Everyone has gotten bills that are crisp and clean with no rips, folds, tears, stains or any other sign of wear and tear. The ink is vibrant, and the imagery is sharp. The fact it is being handed out, however, disqualifies it from being uncirculated<\/strong>, even if technically the person handing it out is the first person touching it.<\/p>\n\n\n\n Uncirculated bills meet all the criteria above but have one additional distinction, being that the bills were never intended for circulation. The only way an uncirculated bill could be circulated is either by mistake or if there was a currency crisis<\/strong> that demanded more currency than is currently held in reserves be put into the market.<\/p>\n\n\n\n That brings us to why uncirculated bills are worth more than their circulated counterparts. At the very base level, uncirculated bills, because they are not intended for circulation, are necessarily more unique and rare<\/strong> than bills that are in circulation or destined to be in circulation.<\/p>\n\n\n\n Other reasons uncirculated bills are popular with collectors include their aesthetic, their condition, or to fill out their investment portfolios. They\u2019re also chosen for value reasons, as there\u2019s a domino effect whereby if one person collects them, the value increases, so others start to collect them and thus increase the value more. There\u2019s a long-term value increase with collecting these bills<\/strong>.<\/p>\n\n\n\n For all these reasons, a bill can be considered to be uncirculated<\/strong> and, thus, worth more than a circulated counterpart.<\/p>\n\n\n\n By contrast, circulated bills are pretty easy to define, with minimal exceptions. The criterion to qualify as a bill in circulation is straightforward<\/strong>. If a bill is involved in a transaction and it was used as currency, it is considered in circulation. There are, though, a few more specific criteria.<\/p>\n\n\n\n A bill in circulation is simply a bill that is currently being used as currency. That does not, however, mean that every transaction involves a bill in circulation. The bill must be available to the public-in-general<\/strong>.<\/p>\n\n\n\n For example, a collector might have an uncirculated bill that another collector wants, or a dealer might have an uncirculated bill for sale. Merely because another collector purchases the bill in question does not mean the uncirculated bill moves to circulated status<\/strong>. If that were true, then every bill would be considered circulated unless it was never involved in any transaction whatsoever.<\/p>\n\n\n\n A second criterion is that the bill is used as currency<\/strong>. This means in the above example, the uncirculated bill would be considered a product and not currency, and the bills used to pay for that uncirculated bill would be in circulation.<\/p>\n\n\n\n Uncirculated bills are, though, unused currency<\/strong>. They generally will cost more than the face value of the bill because they are collectible. Depending on the year, the asking amount can be quite a bit more than the face value of the bill.<\/p>\n\n\n\n A bill that is in circulation will have some wear and tear on it<\/strong>. It also will not have certified uncirculated status. Most circulated bills will have quite a bit of wear and tear.<\/p>\n\n\n\n For example, look at any bill you have that is not certified as uncirculated. It likely has grime or dirt on it<\/strong> and possibly is stained. It also is very likely it is frayed, ripped, or gouged. Any bill that has those types of wear and tear cannot be considered uncirculated.<\/p>\n\n\n\n Uncirculated are almost always worth more than circulated bills due to their increased rarity, the better condition of the bills, how they\u2019re graded, and how collectible they are. The only exceptions include those with historical significance or printing errors of some kind.<\/strong><\/p>\n\n\n\n Having established the criteria for both circulated and uncirculated bills, several factors weigh into the value of either. As a rule, the vast majority of uncirculated bills are worth more than their circulated counterparts<\/strong>. There are several reasons for this. The most basic is a certification by the US Mint that the bills are not in circulation. Other factors are outlined below.<\/p>\n\n\n\n Rarity is an important factor regarding the value of uncirculated currency<\/strong>. Uncirculated bills are always a minority portion of a print run. That means from the outset, uncirculated bills are rarer than the bills put into circulation. So, from the beginning, before any bills are actually put into circulation, the bills earmarked as uncirculated are worth more.<\/p>\n\n\n\n That principle also applies to currency in the past<\/strong>. If you have an uncirculated bill that is extremely old, there is a chance that in addition to its rarity as an uncirculated bill, it has enhanced value because of its age. If it also has historical significance, the value is even more.<\/p>\n\n\n\n As mentioned, not all uncirculated bills are equal. In terms of value determinations, uncirculated bills come in four types<\/strong>, including damaged bills, print errors, human errors, or those that are purposefully uncirculated for collection purposes.<\/p>\n\n\n\n To be a purposefully uncirculated bill is to be set aside and designated as uncirculated<\/strong> purely for collectors. These bills may be marked to indicate their status, but other than that, they are pristine. They have never been folded, and have no stains, wear, fading, tears, punctures, or fraying.<\/p>\n\n\n\n Damaged bills typically are bills that have been damaged during the process of moving them from the point of bursting margins on a sheet to being stacked<\/strong>. A set of bills may have been dropped or something may have spilled on them. Rarely, the bills might have been damaged by handling and review.<\/p>\n\n\n\n Print errors can be in registration, ink coverage, or centering<\/strong>. The result includes, but is not limited to smudged images, uncentered images, uneven ink coverage, uneven ink margins, bleeding of ink, or over-absorption of ink that leads to fading.<\/p>\n\n\n\n Human errors are the rarest type of bill mistake<\/strong>. These are errors made in setting up the imagery, choosing inks, information errors like wrong serial numbers, etc. Because of automation and quality assurance, these types of errors seldom happen. When they do, they are usually caught very quickly and the sheet(s) with errors on them are destroyed.<\/p>\n\n\n\n All bills that are potentially collectible are graded on the PMG Paper Money Grading Scale<\/strong>, which is a derivation of the Sheldon grading scale, the internationally recognized paper money grading scale. There are 11 numerical grades that apply to uncirculated bills. Those are:<\/p>\n\n\n\n 60: This is a bill that may have variable tone issue with the paper<\/strong>, a small stain, or fading. There are no folds on a bill at this level. There might be handling markings.<\/p>\n\n\n\n 61: This uncirculated note is poorly centered, and the margins may infringe on the design<\/strong>. There may also be counting marks, smudges, or handling marks. There are no folds in this bill.<\/p>\n\n\n\n 62: There may be very minor handling issues with this uncirculated bill<\/strong>. It may also have corner tip issues and possibly margin infringement on the design. It will not have folds.<\/p>\n\n\n\n 63: The centering on this bill will have issues. There may also be very minor handling issues<\/strong>, but this uncirculated bill will have no folds.<\/p>\n\n\n\n 64: With this type of uncirculated bill, the centering is off, and some handling might be evident, but not obvious.<\/strong> There will be no folds in the bills that qualify at this grade level.<\/p>\n\n\n\n 65: A bill that reaches sixty-five will have no issues in terms of quality<\/strong>, imagery, or margins but may have some minor distractions because of handling. The centering on this level bill must be above average.<\/p>\n\n\n\n 66: A bill at this level might have barely noticeable handling marks<\/strong>. The centering on this bill is above average.<\/p>\n\n\n\n 67: This level of uncirculated bill will have above-average margins and registration<\/strong>. Handling might be noticeable, but not obvious.<\/p>\n\n\n\n 68: The margins and centering might be off on this bill, but evidence of handling is minor<\/strong>. Centering on this bill will be near perfect.<\/p>\n\n\n\nCirculated Versus Uncirculated \u2013 The Basics<\/strong><\/h2>\n\n\n\n
What Are Uncirculated Bills?<\/h3>\n\n\n\n
Uncirculated Criteria<\/h3>\n\n\n\n
Characteristics Of Uncirculated Bills<\/h3>\n\n\n\n
Why Are Uncirculated Bills Popular?<\/h3>\n\n\n\n
What Are Circulated Bills?<\/h3>\n\n\n\n
Public Availability<\/h4>\n\n\n\n
Currency<\/h4>\n\n\n\n
Condition<\/h4>\n\n\n\n
Circulated vs Uncirculated Bills: Which Are Worth More?<\/strong><\/h2>\n\n\n\n
Rarity<\/h3>\n\n\n\n
Bill Condition<\/h3>\n\n\n\n
How Bills Are Graded<\/h3>\n\n\n\n