Worn Currency

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DEFINITION of 'Worn Currency'

Currency notes that are torn, damaged or badly soiled. Banks separate such currency notes daily from the amounts that they collect from the public and exchange them for crisp new bills at the Federal Reserve Bank.

INVESTOPEDIA EXPLAINS 'Worn Currency'

Worn currency notes are assessed by the Federal Reserve Bank,which reviews the notes and determines whether they can be recirculated or should be retired from the money system. The Federal Reserve destroys worn currency notes at some of its banks located throughout the country.

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RELATED FAQS
  1. When did the U.S. start using paper money?

    On February 3, 1690, the Massachusetts Bay Colony issued the first paper money in the U.S., in order to pay for its war. ... Read Full Answer >>
  2. How is the Federal Reserve audited?

    Contrary to conventional wisdom, the Federal Reserve is extensively audited. Politicians on the left and right of a populist ... Read Full Answer >>
  3. Who decides when to print money in the US?

    The U.S. Treasury decides to print money in the United States as it owns and operates printing presses. However, the Federal ... Read Full Answer >>
  4. Why do some people claim the Federal Reserve is unconstitutional?

    The U.S. Constitution does not mention the need for a central bank, nor does it explicitly grant the government the power ... Read Full Answer >>
  5. How can the federal reserve increase aggregate demand?

    The Federal Reserve can increase aggregate demand in indirect ways by lowering interest rates. Aggregate demand is a measure ... Read Full Answer >>
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    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>

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