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<p>[QUOTE=&quot;Numbers, post: 1059121, member: 11668&quot;]The Federal Reserve destroys all pre-1996 $5 through $100 notes that it receives from circulation.&nbsp; Notice that only the small-head notes are included in that policy; the 1996-generation notes are still reissued if in good condition, since they have nearly as many security features as the latest 2004-generation designs.&nbsp; But the Fed has announced that once the new Kodachrome $100 is released, the 1996-generation $100 *will* be added to the destroy list, since the fancy hologram thread in the new $100 will make it a major advance in security beyond the current design.</p><p>&nbsp;</p><p>Your question, though, was about commercial banks.&nbsp; Those banks are neither required nor even requested to &quot;help&quot; the Fed remove old (or just worn-out) currency from circulation.&nbsp; Instead, they&#039;re just supposed to send their *excess* currency back to the Fed, and let the Fed worry about which notes get reissued and which don&#039;t.&nbsp; Depending upon the sort of business that a particular bank does, it may ship excess cash back to the Fed all the time, or it may almost never need to do so (and this may vary by denomination, too).</p><p>&nbsp;</p><p>So, for example, if a particular bank frequently orders $20&#039;s from the Fed (to stock lots of ATMs, maybe), then that bank will probably never ship $20&#039;s back to the Fed, and so any $20&#039;s that come into said bank over the counter will go back out into circulation, regardless of age or condition.&nbsp; If the bank tries to ship their old/worn $20&#039;s to the Fed and at the same time order new $20&#039;s to replace them, then the Fed gets annoyed about the cost of the extra shipments, and charges the bank a &quot;cross-shipping&quot; fee to discourage such behavior.</p><p>&nbsp;</p><p>But if another bank often ships $20&#039;s back to the Fed (because lots of retailers deposit their proceeds at that bank, perhaps), then said bank might (or might not) make a point of ensuring that all the old/worn $20&#039;s it sees are sent to the Fed, saving only the nice new $20&#039;s to hand out to its customers.&nbsp; As long as the bank was going to ship some $20&#039;s to the Fed anyway, the Fed doesn&#039;t really care whether the bank is picky about which $20&#039;s it sends.[/QUOTE]</p><p><br /></p>

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