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Banknotes and coins

Life of a banknote

Learn about the life cycle of our banknotes, from how they are made, sorted and circulated to what happens when they are no longer fit for circulation.

Published:

The journey from design to circulation

Before a New Zealand banknote is circulated and enters your wallet, it follows a complex process. It generally incorporates 4 stages:

  1. Selecting and integrating security features
  2. Design
  3. Printing
  4. Recycling

Jedd: Hi, I'm Jedd from the Reserve Bank of New Zealand. Today, Evelyn and I are going to give you a look at the life cycle of New Zealand's banknotes.

Evelyn: We'll show you how they're made, sorted and circulated as well as what happens when they're no longer fit for circulation.

Jedd: The banknotes have changed a few times through the years which brings us to these — our new Brighter Money. These little rectangles of flexible polymer substrate or plastic are what we know as cash.

Evelyn: To make big notes this high-tech, you need equipment we don't have in New Zealand. So, our new Brighter Money uses Australian made polymer substrate which is rolled into reels before being turned into banknote sheets. The notes have been designed and printed onto those sheets in Canada. That means that we can have holographic windows, micro text and many more security features all designed to put counterfeiters out of business.

Jedd: Once they're delivered to the Reserve Bank, the notes are sent to banks and from there, they go into circulation. Notes can stay in circulation for 6 or 7 years.

Jedd: But when a note gets damaged or worn out, how do we make sure it doesn't end up back in your wallet? We're constantly making sure our bank notes are fit for circulation.

Evelyn: First the notes are sorted by hand. Then we let this machine make the final call. Anything that's so good gets bundled up right here and the notes that aren't up to scratch go straight to the shredder. This is all that's left of the notes once the shredder is finished with them. From here, the shredded cash gets sent up to Auckland where the polymer substrate is recycled.

Jedd: Then it's sold to product manufacturers who use it to make stuff like this. I guess there's a lot of money in pot plant holders these days. 

Evelyn: The catch that's still good joins newly printed notes and they're all sent to a bank, ATM or retailer near you and even though there are other ways to pay, cash is still important in many sectors of the economy. It's use is still growing.

Jedd: So that's where our cash comes from and where it'll end up when its life cycle is over. We hope you've enjoyed this behind-the-scenes look at the Reserve Bank and our new Brighter Money. Thanks for coming with us.

Selecting and integrating security features

Banknotes use a range of security features to protect against counterfeiting. New features are constantly being developed.

The Series 7 banknotes use more sophisticated and modern security features. These include:

  • a larger window featuring a detailed metallic foil element
  • a native bird icon that changes colour as the note is tilted, and a bar is then seen moving through the shape
  • a small ‘puzzle number’ lines up when the note is held up to the light
  • raised ink used on the large denomination number.

Other security features include:

  • micro-printing
  • intricate background patterns
  • a fluorescent feature.

Design

Banknote design requires very specific technical knowledge in a range of areas. These include aesthetics, printing techniques, security features and banknote equipment requirements.

  1. We make initial decisions about the colour, wording and sizes of each denomination based on public surveys and expert advice.
  2. Designers draw up concept designs that include the various features of the note, including aesthetics, printing techniques, security features and banknote equipment requirements.
  3. Once these features are agreed upon, the designer produces an image of the front and back of each note denomination. These images are produced in the correct size and colours using a computer-based design system.
  4. A range of people then assess the banknote draft designs including security experts, banknote equipment manufacturers and design, and history and cultural experts. This is to ensure the banknote designs improve security, are aesthetically pleasing and reflect New Zealand’s culture and history.
  5. Copyright and/or the necessary permissions are then obtained for all the images and portraits, which Canadian Banknote Company incorporates into the design of the new banknotes.

Read a Bulletin article documenting the design process for the Series 7 banknotes

Printing

Canadian Bank Note Company in Ottawa, Canada, prints New Zealand’s Series 7 banknotes. Note Print Australia Limited in Melbourne produced the earlier Series 6 polymer banknotes.

Testing

The new banknotes go through rigorous testing to ensure they are as robust, secure and durable as possible before release. This includes:

  • laboratory testing to find potential areas of weakness in the design and printing
  • testing with users to ensure the new notes can be used by businesses, retailers, banks and others users such as banknote equipment manufacturers.

Recycling

In 2015, we introduced a recycling system for the old or damaged polymer notes. These notes are destroyed by being shredded and then recycled into plastic products like pot plant holders.