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"Fit" currency is currency that meets the Fitness Guidelines for Federal Reserve Notes (PDF). "Fit" currency has been processed by the Federal Reserve and has been deemed suitable for further circulation. The Federal Reserve identifies and destroys notes that are soiled, worn or have defects such as graffiti, holes, tears and folded or missing corners. Suspect counterfeit notes are also identified and sent to the Secret Service, leaving only fit notes to be packaged and returned to circulation.
"Fit" currency is currency that meets the Federal Reserve's published Fitness Guidelines for Federal Reserve Notes (PDF). Currency that is "fit for commerce" is currency that may not necessarily meet the Federal Reserve's published fitness guidelines, but that is accepted by the public, useable in the majority of automated currency handling equipment and merchants, and can easily be identified as a genuine note.
Reserve Banks monitor the number of fit notes processed from each institution's deposits as a percentage of total notes deposited by that institution during each month. Reserve Banks then apply this monthly average fitness rate by Federal Reserve Bank zone or sub-zone to an institution's weekly deposits to determine how much currency it cross-shipped.
Example: In January 2018, Bank X's deposits of $10s to the Boston Federal Reserve Bank were 65 percent fit. In the first week of January 2018, Bank X deposited 500 bundles of $10s to the Boston Federal Reserve Bank. Bank X deposited 325 bundles (500 * .65 = 325) of fit currency. The 65 percent fitness rate will be applied to Bank X's deposits of $10s each week of January 2018.
The Federal Reserve has worked and continues to work with the vendors of commercially available currency fitness sensors to develop specifications that will enable them to calibrate their sensors with the Federal Reserve's standards.
Average fitness rates are available at the zone and sub-zone level in monthly cross-shipping reports. Visit FedCash Cross-shipping Reports via FedLine Web® for more detailed information on how to access your reports.
The Currency Quality Policy defines the threshold level of quality for each denomination that is "fit for commerce;" identifies a framework for monitoring quality; and specifies actions the Federal Reserve Banks would take to adjust the quality of currency in circulation to avoid inconvenience to the public, or increased risk of recirculating counterfeit notes.
The "fit-for-commerce" standard has two components, which may differ by denomination: 1) a minimum fitness threshold based on consumer acceptance and the technical tolerances of machines that handle currency, and 2) a maximum allowable incidence of below-threshold notes remaining in circulation. The goals of the standard are the following:
For more information on the Currency Quality Policy, visit the Currency Quality Program page.
1The public's ability to recognize the security features of currency can diminish if notes are heavily soiled, torn, worn, or crumpled.
2Automated currency handling equipment includes, for example, vending machines, fare card machines and currency sorting machines.
The Federal Reserve Banks implemented the Currency Quality Policy before the cross-shipping fee took effect in July 2007.
The Federal Reserve monitors the quality of currency deposited and processed at Federal Reserve Offices on a monthly basis. The Federal Reserve also takes annual samples of currency received by depository institutions (DIs) from their customers.
Please contact your servicing Reserve Bank and share your concerns. Please be prepared to share the denomination, quantity (one bundle, etc.) and physical condition (i.e. dirty, torn, etc.) of the currency.
The Federal Reserve encourages every depository institution (DI) and cash handler to work closely with their equipment manufacturer, equipment vendor and third party service provider to make any necessary adjustments to equipment in order to avoid incurring cross-shipping fees. In addition, every DI and cash handler should evaluate and adjust currency sorting practices in accordance with the Fitness Guidelines for Federal Reserve Notes (PDF).
Equipment manufacturers, vendors or third party service providers may submit requests for clarification regarding the Fitness Guidelines for Federal Reserve Notes (PDF) in writing to the National Cash Product Office (CPO).