New Zealand's banknotes are set for a makeover later this year, with the Reserve Bank set to release more vibrant and secure notes into circulation.

Reserve Bank deputy governor Geoff Bascand says designs and printing techniques have advanced significantly since the current notes were released in 1999, and the demand for cash continues to increase.

The new designs will still feature the same individuals and flora and fauna that are on the current notes.

'Our brighter money doesn't just celebrate innovation and the pioneering New Zealand spirit through the images depicted on the banknotes – the notes themselves are at the forefront of banknote technology,” says Geoff.

'Our new notes contain more sophisticated security features that greatly enhance the overall design.” Geoff says the transparent windows are larger, and striking holographic features will help to make the notes very easy to verify, but hard to counterfeit.

Counterfeit rates are low in New Zealand compared to the rest of the world, but Geoff says technology changes are making it easier and they need to stay ahead of the game.

Currently, counterfeit banknotes are circulating the North Island and police are warning retailers to keep their eyes peeled. Read more about the counterfeit notes here.

The new notes will be released progressively. The target date for the release of the $5 and $10 notes is October, and the target date for the release of the $20, $50 and $100 is April 2016.

Both the current notes and new notes will circulate together and both sets will be legal tender.

'The Reserve Bank will withdraw the old series notes from circulation naturally as the banks return them to us,” says Geoff.

'Our note circulation and distribution strategy has been designed in consultation with industry, and it represents a ‘business-as-usual' approach which should minimise the additional costs of introducing new notes.”

The Reserve Bank will continue to work closely with banks, manufacturers of bank-note-handling equipment and retailers to ensure a smooth transition to the new notes.

A public awareness campaign will be run closer to the times the notes are released.