This article describes the standard of grading Bank Notes that will be adhered to by the Canadian Currency Grading Service, Inc. You can find other technical descriptions for the various grades of Bank Notes in the Charlton Catalogue of Canadian Government Paper Money. The Canadian Paper Money Society has also set a standard for grading Bank Notes.

In the early nineties I wrote an article on grading Bank Notes that was printed in the Canadian Coin news. Since the early 1990s the standards for grading Bank Notes in Canada have changed. I believe eye appeal has a much larger role when assigning a grade to a bank note. Often I have seen an original note with a slight counting crease passed over for a flattened note that without close inspection show no signs of handling. Thus, the technically lower grade note is preferred by most collectors.

A bank note with soft folds may be graded EF, when pressed it can lose all signs of its folds and be offered as an AU note or if all signs of the folds disappear the note will be graded UNC or choice UNC. In my opinion a note in original condition with a counting crease is uncirculated. If the counting crease is small the note would grade MS-64. A regular counting crease would give the note a grade of MS-63. With a large counting crease a note would grade MS-62.

Before making a quick judgment on counting creases being included in the uncirculated grade, let us take a look at coins. Some people return bank notes as not being uncirculated unless they are perfect in appearance. To this day I have not seen a perfect coin. Yet there are many grades of uncirculated in coins. If a coin has the remains of an overall original mint luster without deep scratches, it will be graded uncirculated.

The original sheen of the paper and a lack of visible folds will put a bank note into the uncirculated grade. If a note with original sheen and a lack of visible folds has large defects or many minor defects the grade could be pulled down to almost uncirculated condition.

In Canada you generally will see notes with grades of :

  • UNC (uncirculated)
  • AU/UNC (AU-58), Choice AU (AU-55), Almost Uncirculated (AU50)
  • EF+ (EF-45), Extra Fine (EF-40)
  • VF+ (VF30), Very Fine (VF-20), about VF
  • Fine+ (F-15), Fine (F-12)
  • about Fine (VG-11), Very Good+ (VG-10), VG (VG-8)
  • G/VG (G-7), Good+ (G-6), Good (G-4)
  • about Good (AG-3), Fair (2), and Filler (1)

In the United States similar grading names are used but there is more than one grade of uncirculated note. UNC, Choice UNC, GEM UNC being the three most commonly used names for uncirculated notes.

Technically a note that once has been folded is not uncirculated. However, if the note upon inspection shows little or no signs of handling the grade will be high, even uncirculated in today's market.

Many Bank Notes have been processed. Some notes are obviously washed, glued, or taped. Obvious signs of repairs will make a note less desirable than an untouched note with problems. Interestingly, there are some professional paper conservators that can remove glue from a Bank Note, repair a tear, pinhole, and sometimes remove teller's writing. When a note is repaired so that the original impairment is gone, the note can actually improve in its grade, and the market value.

Some people would say that they do not want processed notes to be collectable. The modern reality is that paper money needs to be protected. Conservation of paper money will continue in the future. I have seen well-repaired, rare notes bring bids exceeding current catalogue values in auction. A well-repaired note is collectable. Presently it is up to the buyer to decide the actual value of these notes.

Current Dealer Grading Standards

Superb Gem UNC67 : Is a well centered essentially perfect note.

Gem UNC65: Appears as a perfect note with normal centering.

Choice UNC64: This uncirculated note may be off center. The note may be well centered with a half inch or smaller counting crease. There could be slight evidence of a corner flick but no hard fold showing.

Choice UNC63: The note could have two counting creases - one on each side. A counting crease is a small bump or ridge in the body of the note.

Choice UNC62: A long counting crease. The body of the note may not be totally crisp. There may be a small nick in the border of the note.

UNC60: This note could have three or four minor defects. Creases in the borders of the note. Three counting creases. There may be a small nick in the border of the note.

Choice AU58 = AU/UNC=AU++: This note could have a long counting crease over two inches long. A particularly hard counting crease. It could be a note with pinholes that would be otherwise uncirculated.

Choice AU55=AU+: Looks uncirculated but has too many creases.

AU50 = AU: Looks uncirculated except for a soft fold or two.

EF45 = EF+: One hard fold, bright crisp and clean.

EF40 = EF: Bright crisp note usually three or fewer hard folds. The paper may be broken along a major fold. The note should not show evidence of wear in the body of the note. If a note has the eye appeal of an almost uncirculated note, it may be called EF with more light folds.

VF35 = about EF: Wants to be an extra fine note but it has too much handling to make the grade.

VF30 = VF+

VF20: A crisp relatively clean note. May show a light haze of soiling. A touch of soiling may be found where the note was counted. Numerous folds are acceptable as long as the design is not worn off. Occasionally a note may grade VF with the paper broken due to folding on the back of the note. The edges and corners of the note will often show some signs of wear.

F 18 = about VF; F17= Fine/VF; F15= Fine+

F12 = Fine: The paper usually has some rigidity remaining. The printed design can be worn off on the major folds. All the major features of the design are present. There can be considerable soiling with a fading of the original colors. Many folds, and creases are present.

VG11 = about Fine; VG10 = Very Good Plus

VG8 = Very Good: Whole note, usually has full margins, a lot of soiling due to being well circulated, some border tears (nicks) may be present.

G7 = About VG: Full note with worn margins, may have excessive wear in a few areas obscuring some of the note design.

G6 = Good Plus

G4 = Good: Well circulated, may be dark, or faded. Parts of the design may be worn off. The serial/sheet numbers, date, manuscript signatures may be faded, or illegible.

G3 = About Good: Well worn rough edges, may be missing a corner, or two.

G2 = Fair: Has a good part of the design of the note. May be a partial note. May be extremely well worn.

G1 = Filler: Barely identifiable.

Comments: pin holes, stains, measured tears.

A note with portions missing will be graded as if it was a whole note, then fully described.