The Netherlands, like the other countries in the eurozone, uses the euro as its official currency.
The common currency eliminates the headaches that European travelers experienced prior to the euro's introduction when it was necessary to convert from one currency to the next each time a national border was crossed.
The value of the euro vs. the American dollar fluctuates continuously; for the latest rate, check a reputable online currency converter such as Xe.com.
(Note that there is often a commission on top of this to convert your home currency into euros.)
The Netherlands and the Guilder
Most residents of the Netherlands and tourists who visited the country before 2002, when the euro was adopted, will remember the guilder, which has been retired and retains no worth other than its (mostly subjective) collectors' value.
The guilder was the Dutch currency from 1680 to 2002, albeit not continuously,, and traces of it survive in many popular expressions, such as "een dubbeltje op z'n kant" ("a dubbeltje [ten-cent piece] on its side")—i.e., a close call.
The size of the center hole in a compact disc was modeled after the same coin, the 10-cent dubbeltje; the CD was the invention of Dutch electronics company Philips.
Guilder coins were exchangeable for euros until 2007. If you still have guilder notes, they'll be exchangeable until the year 2032.
But the country's official currency, now used for all transactions, is the euro.
Euro Notes and Coins
Euros come in both coins and banknotes. In the Netherlands, euro coins are minted in values of 1, 2, 5, 10, 20 and 50 cents, as well as € 1 and € 2; all feature Queen Beatrix of the Netherlands on the reverse (with the exception of some special-issue coins), while the € 1 and € 2 have a distinctive two-tone composition.
Banknotes come in denominations of € 5, € 10, € 20, € 50, € 100, € 200 and € 500.
There are no € 1 and € 2 banknotes; these are circulated exclusively as coins. In practice, coins tend to be more prominent in the eurozone than in the U.S. (where even dollar coins have yet to take off), so a coin purse can come in handy if your wallet doesn't have a dedicated coin pocket.
Also, note that many local businesses refuse to accept banknotes over € 100, and some even draw the line at € 50; this is usually indicated at the cashier's desk.
Virtually all businesses in the country round amount up or down to the nearest 5 cents, so visitors should expect this practice and not be taken aback when it happens. € 0.01, € 0.02, € 0.06 and € 0.07 are rounded down to the nearest 5 cents, whereas € 0.03, € 0.04, € 0.08 and € 0.09 are rounded up to the next five cents.
However, 1 and 2 cent coins are still accepted as payment, so travelers who have collected these denominations elsewhere in Europe can feel free to use them in the Netherlands.