The Often Perplexing Fr. 214 1879 $10 Refunding Certificate


What the heck is a “Refunding Certificate” anyway?

The Fr. 214 1879 $10 Refunding Certificate is an interesting relic of a bygone era. When the United States government first started issuing currency, the vast majority were Legal Tender notes, Silver Certificates, and Gold Certificates. These notes were commonly used in day-to-day banking transactions. Legal Tenders were used for regular commerce between merchant and customer and to pay “public and private” debts.

What most people don’t realize is the government also issued a series of notes that bore interest. 1863 saw the introduction of the Compound Interest Treasury Note and the Interest Bearing Note; two financial vehicles used to encourage the purchase of government securities. Given their nature, both Compound Interest Notes and Interest Bearing notes are generally very rare and highly sought after. Denominations ranged from $10 – $1000 and paid the bearer additional money upon redemption. All known examples – especially high denominations – are museum pieces and unknown in most collections.

$10 Refunding Certificates offered bearers an indefinite return of 4% per year. This made them particularly attractive as investment tools for regular folks looking to made a little extra cash. Unfortunately, a July 1, 1907 act of Congress effectively stopped paying interest on these notes. If you still had one of these notes in your possession, it accrued $11.30 in interest, or a redemption value of $21.30 (including the $10 you originally invested).

Unlike its interest bearing predecessors, many examples of this note survive to this day, some in tip top condition.

The following is a scan of a $10 Refunding Certificate sold at auction, hammering at $15,525 in 2009. The note’s grade is stupendous: PMG 65 Gem Uncirculated EPQ. Accordingly, the lofty winning bid in excess of $15,000 was well justified.

Fr. 214 1879 $10 Refunding Certificate - PMG Gem Uncirculated 65 EPQ - From a 2009 Heritage Auction
Fr. 214 1879 $10 Refunding Certificate - PMG Gem Uncirculated 65 EPQ - From a 2009 Heritage Auction

Most common examples of this note grade above Very Fine, by virtue of the fact that former owners left them in safe places to avoid any sort of damage or else they might have lost their deposit and interest. This is in stark contrast to Legal Tenders, Silver Certificates, and Gold Certificates of the same time period, which were subject to heavy usage and often stored in odd places.

Feel like buying one of these Fr. 214 notes? Make sure you have plenty of padding in your wallet: these “interesting” 😉 notes will set you back at least $2,000. High grade examples – grading above About Uncirculated – go for exponentially more. In fact, one note sold at a Heritage Auction for more than $19,000 in 2008. Its grade was the same as our example above, PMG 65 Gem Uncirculated EPQ (Exceptional Paper Quality).

Here’s some parting wisdom, just in case you come across a $10 Refunding Certificate in your travels. There is another type of this note, Fr. 213, that is exceptionally rare. While Fr. 214 is charged with “Payable to the bearer”, Fr. 213 is charged with “Payable to order”. This slight variant has not been seen at auction in recent memory. That doesn’t mean they do not exist. Our guess is they reside in some high end collections kept far away from prying eyes.

Forget collecting your $21.30: the Fr. 214 and Fr. 213 1879 $10 Refunding Certificate will net you THOUSANDS more. It literally pays to know your currency!

This article is written for news and entertainment purposes only. All references to Heritage Auctions, LLC are trademarked and copyright Heritage Auction Galleries. When’s the last time the government refunded you for anything? Get one of these bad boys in your collection and when you sell it off, your “refund” will be substantial!