The US Federal Reserve has established a mechanism for exchanging them.
From next month, a certain number of dollar bills will start to leave the market and, to facilitate their replacement, the Federal Reserve (Fed) has established a mechanism that it is publicising among the American public.
Wear and tear of paper money, the main reason for exchanging
Although new issues and redesigns do not automatically invalidate old notes, those that have reached the end of their useful life must be exchanged.
The wear and tear on US paper money varies according to its denomination and how it is used in the market.
While some banknotes remain in circulation for long periods, others must be withdrawn more quickly due to their deterioration.
How are banknotes that are withdrawn from circulation exchanged?
The Federal Reserve Banks automatically withdraw worn banknotes when they enter their systems.
If a banknote is in good condition, it remains in circulation, but if it is seriously damaged, it is withdrawn and destroyed.
For users, the exchange process is simple: they just need to deposit the banknotes at their trusted bank.
When withdrawing cash, they will receive new banknotes or banknotes in better condition.
How long is the useful life of dollar bills?
The Federal Reserve indicates that the useful life of a bill depends on its denomination.
This is how higher-value bills, such as the USD 50 or USD 100, tend to last longer because they are used less frequently.
On the other hand, the lower-value notes, such as the $1 or $5, are the ones that wear out the fastest due to their constant circulation.
Average lifespan of dollar bills:
- $1: 6.6 years
- $5: 4.7 years
- $10: 5.3 years
- $20: 7.8 years
- USD 50: 12.2 years
- USD 100: 22.9 years
When should a dollar bill be exchanged?
According to the Federal Reserve, the bill must retain at least 50% of its original surface area and show visible identification in order to be exchanged at a bank.
In cases of extreme deterioration, it is recommended that you go to a bank to receive guidance on the exchange or refund process.
Please note that the banknotes to be withdrawn will be characterized by the following damage:
- Mutilated banknotes (with cut edges, tears or stains).
- Banknotes in poor condition due to natural wear and tear.
Although old banknotes are not automatically invalid, their circulation may be affected if they are in poor condition.
The measure seeks to ensure that only banknotes in optimal condition circulate, avoiding the use of damaged or counterfeit money on the market.
How can I protect your banknotes?
- Proper storage: keep banknotes in a cool, dry place. Avoid places with temperatures above 24 degrees, as heat can damage them.
- Use of wrappers: form bundles of banknotes and wrap them in aluminum foil or airtight zip-lock bags.
- Avoid elastic bands: do not use elastic bands to tie up banknotes, as they can dry out and stick to the paper, causing stains or tears.
- Periodic checks: inspect the condition of the banknotes every six months to detect signs of moisture or damage.
- Avoid contact with harmful substances: keep banknotes away from chemicals, detergents and any substance that could damage them.
- Protect them from the sun: do not expose banknotes to direct sunlight, as this can cause discoloration and deterioration of the paper.
