The bills in your wallet are worth the number on their face, but ever wondered where they came from and what it cost to produce them?
The Federal Reserve decides how many bills are to be printed in its Currency Budget and then these bills are printed by the U.S. Bureau of Engraving and Printing (BEP). Of course, the cost of printing is nowhere near the actual value, but it is still significant. The difference between the two is called Seigniorage.
How much money is printed?
In its 2017 Currency Budget, the Federal Reserve states that it will print 7.1 billion bills worth $209.05 billion this year. That is almost 2.7% less than the 7.3 billion bills budgeted to be printed last year, and an almost 20% drop from the 8.8 billion bills ordered to be printed in 2007.
Among all the bills to be printed this year, the $20 will have the highest volume, a stark departure from ten years ago when Fed data showed that the printing order for $1 bill was the largest.
Source: Federal Reserve
What does it cost?
On average, printing one bill will cost 10.3 cents this year versus 9.4 cents last year and it is over 15% higher than the average cost of printing a bill from 2013. In total, the government expects to spend $673.8 million on printing new bills this year.
The culprit in the increase for 2017 is higher staff costs—in particular an additional $9.3 million budgeted for “staffing and overtime expenses to support the acceleration of the next design family of notes.”
Cost by denominations
Printing a one-dollar bill costs 5.4 cents while printing a $100 bill costs 15.4 cents. Surprisingly, the most expensive bill to print this year will be the $50 bill at 19 cents a piece.
Smaller denominations are generally less expensive to print because of fewer security features. For example, the $5 bill has two water marks while the $10, $20 and $50 bills add color-shifting ink to the list of security features. The $100 bill includes a watermark, a 3-D security ribbon, a new color shifting feature (“the Bell in the Inkwell”) and a color-shifting ink, according to the Fed.