Each business day, Federal Reserve Banks handle currency that is deposited by banks. For safekeeping and space reasons, banks send currency to the Reserve Banks when they have more than enough on hand to satisfy their customers' needs.
Depending on daily and seasonal fluctuations, an individual bank may deposit funds at a Federal Reserve Bank several times a week. The Bureau of Engraving and Printing (BEP) of the U.S. Treasury, in turn, supplies newly printed cash, and the Bureau of the Mint supplies coin, to the Reserve Banks to fill bank orders.
Currency Deposits at the East Rutherford Operations Center
After receiving clearance from the New York Fed Police, armored carriers deliver currency to EROC's Paying and Receiving Division. The paying and receiving tellers verify the contents upon delivery and issue a receipt to the carrier.
The tellers perform a two-step process. First, they check the integrity of the currency and then enter the content information into an automated tracking system.
The currency is then transported to EROC's automated currency vault, where it is stored and later retrieved for processing.
Processing of Currency
Incorrect denominations, suspected counterfeits, and non-machine-readable notes are rejected, and, if necessary, the depositing bank's account is debited or credited. EROC employees inspect suspected counterfeit notes by hand, paying particular attention to the portrait, scroll work, seals, and colored fibers of each bill, as well as to the weight, color and texture of the paper. Suspected counterfeits are stamped "COUNTERFEIT" at the point of detection, and forwarded to the U.S. Secret Service, the Department of Homeland Security agency charged with maintaining the integrity of the nation's currency.
All destroyed currency is replaced with new currency ordered by the Federal Reserve from the Bureau of Engraving and Printing. Reserve Banks provide the BEP with an estimate of new currency needs for the coming year based on the past year's usage. Roughly 26 percent of all notes replaced are $1 notes, which have a life expectancy of 5.9 years. Other denominations remain in circulation longer. A $100 bill, for example, usually lasts seven years.