Paper Currency Grading: Understanding the PMG Scale

How Is Paper Currency Graded?

While coin collectors have the Sheldon Scale, paper currency collectors rely on a similar but distinct grading system. If you collect banknotes — U.S. currency, world notes, or historical paper money — understanding how grading works is essential to knowing what your notes are worth.

The leading authority in paper currency grading is PMG (Paper Money Guaranty), a service affiliated with NGC that has graded millions of banknotes since its founding in 2005.

The PMG Grading Scale

Like coins, paper currency uses a 1-70 numeric scale, but the criteria are different because paper and metal deteriorate in different ways. Here's how the scale breaks down:

Poor to Fair (1-2)

The note is heavily damaged with major problems — tears, missing pieces, heavy staining, or extreme wear. Barely identifiable as a specific issue.

About Good to Good (3-6)

Heavy wear and folding. The note is intact but limp, with significant creasing and possible edge damage. Design elements are visible but heavily worn.

Very Good (8-10)

Well-circulated with numerous folds and creases, but all design elements remain clear. The paper may be soft from handling. Margins are typically uneven.

Fine (12-15)

Moderate circulation with visible folds (typically 7-10 folds). Paper still has some crispness. Colors remain reasonably bright. This is the entry point for many collectors.

Very Fine (20-35)

Light to moderate circulation. Fewer folds (4-7), with the paper retaining some original crispness. Colors are bright, and the note presents well overall.

Extremely Fine (40-45)

Lightly circulated with only 2-3 folds. Paper is still crisp, with bright colors and clean surfaces. An attractive note that saw limited use.

About Uncirculated (50-58)

A note that technically saw minimal handling. May have a single light fold or counting crinkle. Original crispness is largely intact, with full color and clean margins.

Uncirculated (60-70)

No folds or evidence of circulation. Graded on centering, margin evenness, color brightness, and paper quality. A 70 is a note with perfect centering, perfect margins, and flawless paper quality — extraordinarily rare for vintage notes.

What Is EPQ (Exceptional Paper Quality)?

The EPQ designation is one of the most important qualifiers in paper currency grading. PMG awards EPQ to notes that meet specific criteria:

• The note must retain its original paper quality — no chemical treatment, pressing, or restoration
• The paper must have appropriate crispness and body for its grade
• No evidence of cleaning, washing, or pressing
• The note must not have been trimmed or repaired

A note graded "PMG 65 EPQ" is worth significantly more than one graded "PMG 65" without the EPQ designation. The EPQ confirms that the note's condition is entirely original — not enhanced through artificial means.

Why EPQ matters: An unscrupulous seller could press a folded note flat, wash out stains, or chemically treat yellowed paper to make it appear higher grade. EPQ tells buyers the note hasn't been doctored.

How Paper Currency Grading Differs from Coin Grading

While both use a 1-70 scale, the evaluation criteria are quite different:

Centering and Margins

For banknotes, centering is critical. The design should be evenly positioned on the paper with balanced margins on all sides. Poor centering significantly impacts the grade. Coins are evaluated for centering too, but it's a less dominant factor.

Folds vs. Wear

Coins show wear — high points getting smooth from contact. Banknotes show folds — physical creases in the paper. The number and severity of folds is the primary indicator of circulation for paper money.

Paper Quality vs. Luster

For coins, original mint luster is a key grading factor. For banknotes, it's about paper crispness, body, and brightness. A high-grade note should snap when you lightly flick it — limp paper indicates heavy handling.

Stains, Pinholes, and Repairs

Paper money is susceptible to problems that don't affect coins: foxing (brown spots from moisture), pinholes (from being posted on boards), tears, tape repairs, and ink marks. Any of these issues can result in a "Net" grade or notation that reduces value.

Is Paper Currency Grading Worth It?

Like coin grading, the decision comes down to value. Professional grading from PMG typically makes sense for notes worth $200 or more. For common modern notes in circulated condition, the grading cost outweighs the benefit.

Grading is especially valuable for:

• Star notes (replacement notes with a star in the serial number)
• Error notes (miscuts, misalignments, missing print)
• Vintage U.S. currency (National Bank Notes, Silver Certificates, Large Size notes)
• High-denomination notes ($500, $1,000, $5,000, and $10,000 bills)
• Colonial and Continental currency

Grade Your Paper Currency with AI

CoinGrader doesn't just grade coins — our AI can evaluate paper currency too. Upload clear photos of your banknote (front and back), and get an estimated grade on the PMG scale. It's a quick way to determine if your note is worth sending to PMG for professional certification.

Whether you're sorting through an inherited collection or evaluating a single note, our AI-powered tool gives you a starting point for understanding your paper currency's condition and value.