Mirror, Mirror on the Wall, Which Issue of Currency if the Rarest of them ALL?

The mirror should respond, “Interest Bearing Notes”, or else there’s something wrong with your mirror. 🙂

According to Paper Money of the United States by Arthur L. and Ira S. Friedberg, Interest Bearing Notes are the rarest issue of all United States currency. Part of the reason for their rarity is obvious: the bearer earned money while possessing the note, and could collect his or her principle plus interest upon redemption. As a result, most people didn’t hold onto these notes unless they were well-to-do or absentmindedly lost them among personal belongings.  After all, who wouldn’t want to collect 3% interest (or more) on a $10-$5,000 investment in the mid 1800’s?

Interest Bearing Notes were issued to help stabilize the finances of the nation. The government needed operating cash and the banking system needed to be supported. That meant private citizens needed an incentive to invest in the United States, which was quite a leap of faith in the years leading up to the Civil War. These notes were a close cousin of Treasury Bonds, the usual form of financing the government.

Notes were issued for 60 days, 1 year, 2 years, and 3 years. Higher interest was paid on larger investments for longer periods of time. This table lists the issue dates and investment term length:

Table of Interest Bearing Note Issue Information

Term Date of Issue Interest Rate Denominations
60 days March 2nd, 1861 6% $50, $100, $500
1 year March 3rd, 1863 5% $10 – $5,000
2 years March 2nd, 1861 6% $50 – $1,000
2 years March 3rd, 1863 5% $50 – $1,000
3 years July 17, 1863 7.3% $50 – $5,000
3 years June 30, 1864 7.3% $50 – $1,000?*
3 years March 3, 1865 7.3% $50 – $1,000

* These $1,000 Interest Bearing Notes were listed as “probably issued” in the Friedberg guide. It is unclear if any official records exist, let alone if any notes are still outstanding.

According to the Friedberg guide, the aggressive 7.3% interest rate on 3 year Interest Bearing Notes “was the highest ever paid by the government”. Also, interest was payable on a daily basis. Some $50 notes had 1 cent interest paid per day, while $100 notes had 2 cents per day. See Paper Money of the United States  Part IV for further information.

Another interesting feature of some of the 3 year notes – particularly those issued last on March 3rd, 1865 – were the redeemable coupons printed next to the full engraving of the note itself. These coupons could be clipped off and redeemed by the bearer every 6 months of a 3 year term. Interestingly, only 5 coupons were supplied with a 3 year note, when in fact there are 6 half-year periods in the space of 3 years. In effect, the 6th coupon was the rest of the note (less the 5 coupons removed previously). When the note was finally redeemed, the bearer was paid the principle plus the 6 month interest accrued.

Overall, interest bearing notes were a potentially risky, but generally safe way to fund the government’s monetary policy initiatives. The 7.3% interest rate is legendary and will most likely NEVER be matched again. Today’s Certificate of Deposit rates barely clear 1.0% for jumbo certificates. Similarly, 2 and 5 year Treasury Bond Rates don’t even come close to 1.0%. 10 year and 30 year bonds do better, but most people can’t tie up too much capital in a 30 year bond investment. That money is better spent on real estate or paper money collectibles 🙂 . (Seriously – you stand to make more investing in rare currency or a good piece of property at this time).

Let’s have a look at some known examples of Interest Bearing Notes:

Fr. 197a 1863 $20 Interest Bearing Note - Chittenden-Spinner - PMG Very Good 8 NET - Realized $8,625 on April 18, 2008
Fr. 197a 1863 $20 Interest Bearing Note – Chittenden-Spinner – PMG Very Good 8 NET – Realized $8,625 on April 18, 2008












Think this note is a low-ball at VG 8? It may not look great but it’s pretty damn rare. A $8,625 hammer price isn’t exactly chump change either!

Fr. 196a 1863 $10 Interest Bearing Note - Chittenden-Spinner - PCGS Very Fine 20 - Realized $25,300 on January 7, 2011
Fr. 196a 1863 $10 Interest Bearing Note – Chittenden-Spinner – PCGS Very Fine 20 – Realized $25,300 on January 7, 2011












..and this note is considered “Common” for Interest Bearing Notes. $25,300 in 2011 is a good price. Don’t expect to see this note appear anytime soon.

Fr. 209 1861 $500 Interest Bearing Note - Unique in Private Hands - Choice Very Fine - Realized $299,000 on February 19, 2005
Fr. 209 1861 $500 Interest Bearing Note – Unique in Private Hands – Choice Very Fine – Realized $299,000 on February 19, 2005













This note appears in Paper Money of the United States courtesy of renowned numismatist Donald H. Kagin. This one hasn’t been seen on the market publicly since 2005. If it were to be auctioned today, the current owner would likely turn a profit despite the fact that he or she purchased the note prior to the 2008 financial crisis.

So there you have it: Ultra Rare, Ultra Valuable, Ultra Cool Interest Bearing Notes. Lyn Knight Currency Auctions is offering Compound Interest Bearing Notes (more common) during his 2013 CPMX auction: View the Compound Interest Bearing Notes at 2013 CPMX Auction – click here.

Is my 1950B $100 Bill Worth Anything? What about a 1934 $20 Bill?

Most notes printed after 1934 aren’t collectible unless they are in near-perfect condition and have a star serial number. Many non-collectors are surprised notes from the 1950(A-E) series are still circulating, and mistakenly think they’ve struck it rich.

Paper money collectors always get a rush when the bank teller hands them a star note, or something less common like a North Africa Silver Certificate or Hawaii Brown Seal. Although the notes might be a bit beat up from circulating for several decades, in rare cases they are as good as new, deposited at the bank by a customer cleaning out a family member’s house.

We’ve also received calls from people with 1963 $1 Barr Notes found at Walmart or their local pizza parlor. Non-collectors are usually startled because they are so used to the latest colorized designs and signatures. Sometimes they think they’re getting handed counterfeit currency, when in reality the note they possess is authentic.

More importantly, are notes from the mid to late 1900s valuable?

In most cases, they are not collectible unless they are in perfect condition and/or have a star serial number. Old notes that find their way into your local bank might be creased, stained, or have handwriting marks that greatly decrease their collectible value. A circulated 1950 $100 bill is definitely a surprising find, but in reality it’s value is not much more than face unless perfectly preserved.

If you come across any notes that fit the below description(s), please contact us!

Call: (USA) +1-860-322-5415

Email: papermoneysite@gmail.com (send a photo or scan of your note attached for a faster appraisal)

1. Condition – Anything with “normal” circulation and several folds/creases is less collectible. A note that looks like it just came off the presses is much more desirable. These notes are known as “Uncirculated” or more commonly “Mint Condition”. The note must be near perfect to meet this high standard.

2. Star serial number – Star serial numbers are much rarer than normal serial numbers, because they are printed as replacements for notes that returned to the Treasury as damaged. Star serial number plus near-perfect condition is usually a formula for a valuable note. Some star notes printed since 1934 aren’t collectible if they are damaged or have been handled extensively. Still, feel free to contact us for a FREE appraisal of your star note!

3. Unique Serial Number – See if the serial number itself has anything unique or interesting about its pattern of digits. For example, is it 12345678, or 00000002, or 33334444, or 00001945 (a birth year note). Notes with interesting patterns of digits or very low numbers (under 100) are highly collectible, even if they were printed in the 1990s. See our table of collectible serial number patterns below.

4. Notes that have BOTH a star and a unique serial number (even more valuable). Star notes with “Fancy Serial Numbers” (as they are known in the hobby) are rarer and therefore more collectible, even if the note itself has a few folds, slight damage, or evidence of handling. In this case, the star and fancy serial number outweigh the note’s condition.

5. Notes with authentic printing errors (ink smears, missing prints, inverted reverses, foreign matter, etc.) All notes with suspected B.E.P. printing errors must be authenticated before any collector will purchase them. Error note experts might be able to appraise a note based on a scan or photo, but most dealers prefer to see it in person before making an offer. Modern technology and desktop image manipulation software makes it easy to produce fake error notes. It’s best to have error notes graded, authenticated, and identified by a grading service like Paper Money Guarantee or PCGS Currency.

If you come across any notes that fit the above description(s), please contact us!

Call: (USA) +1-860-322-5415

Email: papermoneysite@gmail.com (send a photo or scan of your note attached for a faster appraisal) Table of collectible serial numbers (letters and digits can vary except in cases of birth year, low numbers, or ladder numbers).

Special Serial Known As
Number with * Star Serial
A00000001A Number 1 Serial
A00000310A Low Serial (under 2000)
A99999976A High (over 99999900 )
A00001960A Birth Year Serial
A12345678A Perfect Up Ladder
A87654321A Perfect Down Ladder
A00001234A Partial Up Ladder
A87650000A Partial Down Ladder
A33333333A Solid Serial Number
A70004444A Partial Solid Number
A23232323A Super Repeater
A00232323A Partial Repeater
A44442222A Double Quad
A00033000A Palindrome or “Radar”
A66668666A 7 of a Kind (the 6’s)
A45555555A 7 in a row (the 5’s)
A34433443A Radar Repeater
A54444445A Super Radar
A10101110A Binary (only 1’s & 0’s)
A01010101A Binary Super Repeater