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Grading Banknotes

By AG    |   Sunday, 30 January 2011

Five characteristics are examined to accurately determine the state of preservation of a banknote. They are the state of cleanliness, the severity of folding, the state of the surface, the state of the edges and the severity and number of any punctures or pinholes on the note.

A points system is used where each characteristic is scored out of 20 - the maximum score for an absolutely pristine note being 100. Grading points are as follows:

  • Crisp, Flat, Uncirculated (CF) - 100
  • Extremely Fine (EF) - 90
  • Very Fine (VF) - 75
  • Fine (F) - 55
  • Very Good (VG) - 30
  • Good (G) - 20

The following describes scoring process used for each characteristic:


  • As printed - clean and bright: 20
  • Slight soiling - just noticeable: 15
  • Considerable soiling and/or banker's marks: 10
  • Very dirty, legibility is reduced: 0


  • As printed - flat and unfolded: 20
  • One or two folds leaving a very faint crease: 15
  • Several prominent folds: 10
  • Many folds and heavy creasing: 0


  • As printed - crisp with no damage: 20
  • Slight, just detectable abrasions or damage: 15
  • Readily detectible damage in several places: 10
  • Extensive damage: 0


  • As printed - perfectly straight and even: 20
  • Slightly rough or with very minor indentations: 15
  • Considerable indentation and/or with tears in the margins: 10
  • Badly damages edges and/or tears extending into the design: 0


  • As printed - no holes: 20
  • One or two pin holes only: 15
  • Several pin holes or a slightly larger puncture: 10
  • Several larger holes: 0

Grading Services and the 'Slab'

In the laste 1980's, a new innovation, the so-called slab, was introduced in an attempt to remove the subjectivity surrounding grading. Used particularly by investors, high value coins and other numismatic pieces are forwarded to a recognised, independent grading agency for evaluation. Along with a grading certification, each item is then sealed within a 'slab' of inert plastic.

Officially known as 'Encapsulated Numismatic Products', slabs were intended to promote investor confidence and enable the purchase and sale of numismatic items, sight unseen. In the U.S.A., the practice has enabled Wall Street companies to confidently trade in numismatic items through the investment market, with the actual item being traded remaining locked away in a bank vault.

The practice has its critics. Many believe that the entry of large scale investors into the numismatic market has pushed up prices to the point where genuine collectors are being pushed out.

Further, controversy of grading continues. Dealers and investors have been known to send a piece to several different grading services, seeking that slightly higher grading which will add hundreds or even thousands of dollars to the value of the piece.

One advantage of the slab is that market forces have helped to reduce the gap between the buying and selling price of items - the dealer's margin. This, however, is more than offset by the increased volitility of investment market driven valuations. Alongside the more established benchmarks of valuation - rarity and condition - the criteria of market forces has made numismatics a much more complex hobby.

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