Banknote grading: what UNC, AU and VF actually mean
Paper is graded on folds, corners and crispness, and the gap between a perfect note and a folded one is routinely five times the money.
In the Buck index
$2 Federal Reserve NoteUnited States · 1976–2026 · Paper (25% linen, 75% cotton)$2.49 to $3.22
5 Pounds, Winston Churchill (Polymer)United Kingdom · 2016–2026 · Polymer$6.78 to $6.92
Coins wear. Paper folds, and folding is irreversible. That single difference is why banknote grading is stricter than coin grading and why the price gaps are wider.
The scale
| Grade | Short | What it means |
|---|---|---|
| Uncirculated | UNC | Never folded. Original crispness, sharp corners, perfect margins |
| About Uncirculated | AU | One light fold or a counting crease. Otherwise as new |
| Extremely Fine | EF or XF | Up to three light folds. Still crisp, corners sharp |
| Very Fine | VF | Several folds, slight rounding, some loss of crispness |
| Fine | F | Well circulated. Limp, rounded corners, maybe a small edge tear |
| Very Good | VG | Heavy wear, soiling, tears into the design possible |
| Poor | PR | Intact enough to identify, and that is all |
A note that is UNC apart from a single corner bend is AU, not UNC, and it is worth noticeably less. Graders are unforgiving here because a fold cannot be undone.
The words that follow the grade
- Original. Not pressed, washed or repaired. The most valuable word in the sentence.
- Pressed. Flattened to hide folds. Detectable from the flattened paper texture, and discounted heavily.
- Washed. Cleaned to lift stains. Kills the surface sizing and reads as dull and soft.
- Repaired. Tape, glue, reinforced corners. Any of these caps the grade at Fine.
- EPQ or PPQ. "Exceptional" or "Premium Paper Quality", added by grading services to a note whose paper is fully original. It carries a real premium.
What actually costs a grade
In rough order of how much money each mistake costs:
- Folding it to fit a wallet. UNC to VF in one afternoon.
- Storing it in a PVC sleeve. Plasticiser migrates into the paper over years and leaves a greasy haze that cannot be removed. Use polyester, sold as Mylar.
- Taping a tear. A tear is worth less than a taped tear, always.
- Sunlight. Inks fade, and fading is permanent. Store flat and dark.
- Flattening under a book. This is pressing, and graders name it.
Serial numbers and signatures still matter
Two notes in identical condition can be worth very different money because of what is printed on them. A low serial number, a star replacement note, a scarce signature combination or a rare issuing district all carry premiums that have nothing to do with grade. That is its own subject.
Where the money actually is
For most modern notes, condition is the entire value proposition: a current $2 bill is worth $2 folded and a few dollars crisp. For obsolete notes, condition multiplies a premium that already exists, which is why a $1,000 note in VF can be worth less than a much commoner note in UNC.
Work out which of those two situations you are in before deciding whether the note is worth protecting.
