Jake Miller
The legal tender status of old New Zealand bank notes is a relevant topic, given the country's transition from paper to polymer banknotes in 1999, which increased their durability and security. While Series 6 and 7 of genuine New Zealand banknotes are still legal tender, regardless of condition, older notes, such as the $1 and $2 notes, have been demonetised and replaced by coins. The Reserve Bank of New Zealand continues to accept old or withdrawn currency at face value, but money changers are not obligated to do so. Individuals with old or damaged banknotes can lodge a claim with the Reserve Bank and may receive reimbursement based on the proportion of the banknote remaining.
| Characteristics | Values |
|---|---|
| Issuing authority | Reserve Bank of New Zealand |
| Legal tender | Series 6 and 7 of $5, $10, $20, $50 and $100 banknotes are legal tender |
| Exceptions | $1 and $2 notes are not legal tender |
| Exchange | Old/damaged currency can be exchanged at face value |
| Overseas bank accounts | Overseas transaction fees may apply |
| Contaminated currency | Seal in a bag or container and indicate type of contamination |
| Collectible notes | Special edition $10 notes issued in 1999 are now collectors' items |
| Replacement | The Reserve Bank will replace damaged notes as long as they are recognisable |
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What You'll Learn
Series 6 and 7 NZ$5, $10, $20, $50 and $100 notes are legal tender
Banknotes and coins issued by the Reserve Bank of New Zealand are legal tender. Series 6 and 7 of New Zealand $5, $10, $20, $50 and $100 genuine banknotes are legal tender, regardless of their condition. The old notes will slowly disappear from circulation as they move through the banking system, to be replaced by new notes. However, you can still use them.
Although sellers are not obliged to accept old notes, there are legal implications if someone in debt offers legal tender as payment, as the recipient cannot demand payment in another way.
If you have old banknotes or coins that are no longer legal tender, or are damaged or incomplete, you can exchange them with the Reserve Bank of New Zealand. They will always pay the face value for currency that has been legally issued for use in New Zealand but has ceased to be legal tender. If you have between one-third and two-thirds of a damaged banknote, they will pay half the value of the banknote. If you have two-thirds or more of the banknote, they will pay the full value of the note.
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NZ $1 and $2 notes are no longer legal tender
Legal tender refers to exchanging goods and services for money. In New Zealand, legal tender includes Series 6 and 7 of $5, $10, $20, $50, and $100 banknotes, as well as the current $1 and $2 coins. Notably, the $1 and $2 notes are no longer considered legal tender in New Zealand.
The history of New Zealand's currency is fascinating. Before 1934, various trading banks issued their own banknotes, and they were not obligated to accept each other's currency. However, by the 1920s, there was a growing desire for a unified national currency. This led to the establishment of the Reserve Bank of New Zealand in 1934 as the sole authority for issuing national banknotes.
Over time, the design and composition of New Zealand's currency have evolved. The country transitioned from paper banknotes to polymer banknotes in 1999, improving durability and incorporating enhanced security features. The $1 and $2 notes were replaced by coins in the 1990s, aligning with the global trend of using coins for lower denominations.
It's important to distinguish between legal tender and payment methods. While businesses are not required to accept cash payments, they cannot refuse legal tender for debt settlement. If you possess old or damaged $1 and $2 notes, you can still exchange them for their face value at the Reserve Bank of New Zealand. However, if the notes are incomplete, the reimbursement may be less than the face value, depending on the amount of the note remaining.
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The Reserve Bank of NZ will pay face value for old currency
The Reserve Bank of New Zealand will pay face value for old currency that has been legally issued for use in New Zealand but is no longer considered legal tender. This includes pre-decimal currency and damaged or incomplete banknotes. If you have an incomplete banknote, the Reserve Bank of New Zealand will reimburse you for a certain value if you have at least more than one-third of the banknote. As a general rule, you will receive half the value of the banknote if you have between one-third and two-thirds of the banknote, and if you have two-thirds or more of the banknote, you will receive the full value.
To exchange your old currency, you must fill out a claim application form and bring the old currency and completed form to the Reserve Bank of New Zealand's office on 2 The Terrace in Wellington. Claims can be made to a New Zealand bank account or an overseas bank account. However, if you have an overseas bank account, your bank and the Reserve Bank's trading bank may charge overseas transaction fees, which could result in you not receiving a payment for your claim if the fees exceed the claim value. In such cases, you can choose to donate your claim to charity.
It is important to note that the Reserve Bank of New Zealand does not exchange foreign currency. If you believe your old currency may be worth more than its face value, you should contact a numismatic dealer. Additionally, the Reserve Bank of New Zealand does not offer advice on the value of banknotes and coins as collectible items.
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Old currency can be exchanged at the Reserve Bank of NZ
While old New Zealand currency notes are not always considered legal tender, they can still be exchanged at the Reserve Bank of New Zealand. The Reserve Bank will exchange old banknotes or coins that are no longer legal tender, or those that are damaged or incomplete. The bank will pay the face value for currency that was previously legal tender in New Zealand, including pre-decimal currency.
If you are exchanging an incomplete banknote, the bank will reimburse you for a certain value, provided that you have at least more than one-third of the banknote. As a general rule, the bank will pay half the value of the banknote if you have between one-third and two-thirds of the note. If you have two-thirds or more of the banknote, they will pay you the full value.
To exchange old currency, you must fill out a claim application form and bring the old or damaged cash to the Reserve Bank's office at 2 The Terrace in Wellington. Claims can be made to a New Zealand bank account or an overseas bank account. However, if your claim value is less than the sum of the overseas transaction fees, you will not receive a payment for your claim. In this case, you can choose to donate your claim to charity, especially if the claim is for a small amount (less than NZD25).
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Businesses are not always required to accept cash as payment
In New Zealand, banknotes and coins issued by the Reserve Bank of New Zealand are considered legal tender. Series 6 and 7 of New Zealand $5, $10, $20, $50 and $100 genuine banknotes are legal tender, regardless of their condition. The current New Zealand 10 cent, 20 cent, 50 cent, $1 and $2 coins are also legal tender.
While legal tender is often confused with the concept of payment, businesses are not always required to accept cash as payment. Generally, you can use cash to pay unless the business clearly informs you in advance that they don't accept it. They can inform you in person before you pay or by displaying a sign on the premises.
Businesses can refuse to accept cash payments for goods and services as there is no federal statute mandating that a private business, person, or organisation must accept currency or coins as payment. Private businesses are free to develop their own policies on whether to accept cash unless there is a state or local law that says otherwise.
If a business decides not to accept cash payments, it should post its policy visibly for customers. This can be done by displaying the policy at the front door, on the website, at the point of sale, and anywhere else customers will see before making a purchase. The policy should include the types of payments accepted, such as cheques or credit cards, and may also include the reason for the policy, such as due to COVID-19.
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Frequently asked questions
Series 6 and 7 of New Zealand $5, $10, $20, $50 and $100 banknotes are legal tender, regardless of their condition. The $1 and $2 notes were withdrawn in 1991 and are no longer legal tender.
No, shops are not obliged to accept old notes, or any notes, if offered. However, if you are in debt to someone and you offer them legal tender as payment, they cannot demand payment in another way.
The Reserve Bank of New Zealand will always pay face value for old currency that was previously legal tender. If you think your notes may be worth more, contact a numismatic dealer.
