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Counterfeit money: 8 ways to spot fake money

Possessing counterfeit money carries a hefty penalty. Here’s how to tell if money is fake and how to report it.

Dawn Daniels's headshot
Michael Benninger's headshot

By

Dawn Daniels

&

Michael Benninger

Updated

Fact checked

If you’re given counterfeit money, you could have it confiscated — or even end up in trouble yourself if you spend it. Learn how to make sure your money is genuine.

8 ways to tell if the bill is fake

US money has a number of identifying characteristics you can use to check if a bill is genuine.

  1. Texture. Genuine money has a distinctive texture. If you touch a bill and it doesn’t feel right or familiar, it might be a counterfeit. Examine it more closely for further signs of counterfeiting.
  2. Colored fibers. Genuine bills will have red and blue threads woven into them. Counterfeiters will sometimes try to replicate these by printing red and blue lines onto the bills, so compare the texture against another bill — preferably from a bank.
  3. Color-shifting ink. For bills that are $10 and higher, the number in the bottom right corner will appear to change colors if you look at it from a different angle. Depending on what the denomination is and when it was printed, it may shift from copper to green or green to black. Color shifting ink was first added in 1996, so some older bills may not have this feature.
  4. The watermark. If you hold the bill up to the light, you should see a watermark on the right side. Depending on how old the bill is, it may be an oval or a replica of the face on the bill. If the watermark is a face that doesn’t match the one in the middle of the bill, it’s a counterfeit.
  5. Serial number. Each bill has a unique serial number. If you receive multiple suspicious bills and the serial numbers match, they’re counterfeits.The serial number should also correspond to the series number on the bill. The US Department of the Treasury has a table that shows what the first letter of the serial number should be based on the series.
  6. Printing. US bills have raised printing, and all lines should be sharp. Look for irregularities in definition between bills as well as lines wavering in thickness, color or clarity.
  7. Security thread. Each denomination has a unique security thread placement and color. Place the bill under a blue light to see what color it glows, and check that it matches the official guidelines for currency denominations.
  8. Security ribbon. New $100 bills will also have a blue 3D security ribbon with the several of the number 100 and bells printed on it.

Altered bills vs. counterfeit bills

Not all fake bills are printed from scratch. An increasingly common method of counterfeiting is taking smaller bills, like $5 or $10 bills, and altering them to look like $50 or $100 bills. These will feel real, but mismatched security strips and watermarks will give them away.

What to do with a counterfeit banknote

According to the Federal Reserve, you should immediately contact local police if you get a counterfeit bill while in the US. If you’re outside the US., contact the Secret Service, which may have a field office in your region. Check the Law Enforcement section of the uscurrency.gov website for details. In either case, try to remember any characteristics of the person who gave you the bill, and write down their license plate number and/or vehicle description if they get in a car.

How to avoid counterfeit currency ending up in your wallet

With digital security increasing, bank transfers or money transfer apps may be the easiest escapes from counterfeit currency. Apps like Cash App, PayPal and Zelle let you send or receive money from friends and family. Then, you can transfer from the app to your bank account, keeping your money fully online.

But it’s not always possible to go completely cashless. If you need to get cash, get it from a bank or ATM rather than getting cash back at a store.
Compare bank accounts that make getting cash free and convenient

Where does counterfeit money come from?

Counterfeit money comes from various sources both inside and outside of the US. Within the US, it’s typically small groups of individuals that design and print fake money. While outside of the country, larger operations have dedicated themselves to counterfeiting US dollars. Notably, Peru and Colombia are among the countries where millions of dollars in imitation American money has been printed in the past.

Do ATMs detect fake money?

Yes. ATMs can detect fake money by using electronic “eyes” that analyze deposited cash and scan it to ensure it’s printed with magnetic ink and matches the specifications of authentic bills. That said, counterfeit cash that’s deposited at an ATM in an envelope may not be detected until it’s processed at a bank.

Over half (52%) of boomers say that they don’t use money transfer services, compared to only 1 in 10 of both gen Y and gen Z.

Bottom line

Learning how to identify counterfeit bills can help prevent you from accidentally accepting them. But the safest way to make sure your money is legitimate is to get it from a bank you trust.

Frequently asked questions

Are debit cards safer than cash?

Not necessarily. Debit cards take the risk of counterfeit money out of the equation, but they come with their own set of risks. To keep your debit card safe, use a chip-and-PIN system, choose a PIN number that’s difficult to guess and opt to insert your card and enter your security pin rather than using contactless technology.

If I have a counterfeit bill, can I trade it in for a real one?

No, in most cases the bill will be confiscated and you won’t be reimbursed.

Do counterfeit pens work?

No. According to the Federal Reserve, counterfeit pens can be faulty and may misidentify a bill as genuine.

Dawn Daniels's headshot
Written by

Publisher

Dawn Daniels is a freelance content strategist and SEO manager and former editor at Finder, specializing in investments and lending. Dawn has edited more than 50 published books, including personal finance titles that have become best sellers on the Amazon Top 100. She holds a BA in English language and literature from Cornell College. See full bio

Michael Benninger's headshot
Co-written by

Staff writer

Michael Benninger is lead editor of banking at Forbes Advisor and a former writer at Finder, specializing in banking. His work and analysis has been featured in Business Insider, Yahoo Finance, GoBankingRates and the Los Angeles Times, among other top media. He holds a B.A. in business administration and marketing from Rowan University in New Jersey. See full bio

Michael's expertise
Michael has written 41 Finder guides across topics including:
  • Kids’ banking products
  • Cash management accounts
  • Fintechs and neobanks
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