Paper Money Collecting: Beauty. History. Prestige.

Starting a Collection

There are many ways to collect paper money. The simplest way is to save notes found in circulation, and this is how many of the greatest collectors got their start.

Some beginners, for example, attempt to complete a set of $1 Federal Reserve Notes (FRNs) from circulation by looking for one note of each combination of Federal Reserve District and Bureau of Engraving and Printing (BEP) facility. US notes are released to one of 12 Federal Reserve Districts, which are identified by a different letter in a seal on the front of the note. These notes are printed at facilities in either Washington, DC, or Fort Worth, Texas; the location can be determined by the presence, or absence, of a tiny “FW” for Fort Worth in the lower right corner of the front of the note.

A 2009 $5 note printed in Fort Worth, Texas

Many collectors appreciate paper money because of its designs, which can often be quite intricate and attractive. Collections may be extremely diverse, connected only by the owner’s particular aesthetic preferences.

Collectors who travel abroad may also save notes from the countries that they visit. A popular goal is to build a collection that includes one note from every country. Not surprisingly, most people are unable to visit every country, and these collectors rely on paper money dealers who have storefronts, websites or other sales channels to help build their collections. Dealers are easy to find through the PMG Dealer Locator and the Professional Numismatic Guild (PNG), whose members are bound by a strict code of ethics and professionalism.

There are numerous collecting areas, and what someone chooses to collect depends on their interests, budget and other factors. Some collectors prefer vintage banknotes (generally defined as mid-20th century and earlier), others prefer modern banknotes, and there are many who collect both.

Among the most common types of collections:

• Type set: a set that includes one example of each banknote design, such as a collection of every $1 design issued by the United States.
• Seal type set: a set that includes every type of seal that the United States ever used.
• Thematic set: a collection focused on a particular theme – for example, trains or musical instruments on banknotes.
• Location set: a set that includes notes from a particular location – for example, National Bank Notes issued by banks in a particular city.

Paper money is enjoyed for its designs, value, subjects, history, eye appeal, rarity, condition and countless other reasons.

Paper Money Grading

A note’s condition is one of the most important factors in determining its value. An uncirculated note, which has no trace of wear, is almost certainly going to be worth more than a circulated, or worn, example of the same note. The difference in value can sometimes be extreme.

It is therefore essential that collectors fully understand a note’s condition. Originally, a basic system of adjectival grades was used to describe a note’s condition, with additional adjectives added over time. The most worn note was described as “Poor,” while the most pristine was described as “Gem Uncirculated.” Other adjectival grades filled the gaps: Fair, About Good, Good, Very Good, Fine, Very Fine, Extremely Fine, About Uncirculated and Uncirculated.

In the late 1940s, collector, researcher and author Dr. William Sheldon developed a numeric scale from 1–70 to describe the condition of early US cents. Collectors quickly embraced this scale for other coin types and eventually paper money as well.

In 2005, PMG was established to address the significant need for an impartial authority not only to assign a grade to a note, but also to guarantee that the note was genuine. It adopted the industry-standard scale of 1–70 for its grading (See the PMG Grading Scale).

PMG uses a team of paper-money graders to authenticate a note and determine its grade. After the note is authenticated and graded, it is encapsulated in PMG’s secure, tamper-evident holder with a label bearing a description of the note and its grade. Since PMG’s full-time graders are required to be impartial (they cannot buy or sell paper money commercially, or know the identity of the submitter), the grades that they assign are trusted by collectors and dealers around the world.

Notes graded by PMG are also backed by the PMG Guarantee, which provides one of several possible remedies in the rare event that PMG mistakenly assigns a grade that is too high or grades a note that is not genuine. This guarantee, the strongest in the industry, helps to protect collectors and give them more confidence in their purchases. As a result, PMG-graded notes sell for higher prices and have greater liquidity.

Learn more about PMG grading and its benefits >