Yes, the bank will replace damaged money, but the process depends on what kind of damage it has
Banks and the Federal Reserve will replace paper currency that is torn, stained, faded, or otherwise damaged—as long as more than half of the bill remains and it is still identifiable as U.S. currency. If you have a bill that is badly worn, water-damaged, or partially burned, you can take it to your bank or mail it to the Federal Reserve's Mutilated Currency Division, and they will send you a replacement at no cost.
The process is straightforward but takes time. Your bank may handle minor damage on the spot, but serious damage gets sent to the Federal Reserve in Washington, D.C., where specialists examine it under magnification. Replacement typically takes four to twelve weeks once the Federal Reserve receives your package.
Key Takeaways
- Banks replace damaged U.S. currency for free if more than half of the bill is present and identifiable.
- Minor damage like small tears or fading can often be replaced at your bank branch within a few days.
- Severe damage—burns, water damage, or bills stuck together—must be sent to the Federal Reserve's Mutilated Currency Division in Washington, D.C.
- The Federal Reserve replacement process takes four to twelve weeks and requires you to describe the damage and how it occurred.
- You do not need to prove you own the money; the Federal Reserve replaces it based on the condition of the bill itself.
What counts as damage the bank will replace
The Federal Reserve replaces bills that are torn, creased, faded, stained, or worn thin from circulation. Water damage, mold, and minor burns are also covered. The key rule is that more than half of the bill must be present and you must be able to identify which denomination it is and which side (front or back) you are looking at.
Bills that are completely burned, dissolved, or so damaged that the denomination cannot be determined are harder to replace. The Federal Reserve can sometimes reconstruct bills from fragments, but this takes longer and requires more detailed documentation of what happened.
Replacing damaged money at your bank branch
Start by taking the damaged bill to your bank during business hours. Bring your account information and be prepared to explain what happened—whether it was torn in a wallet, damaged by water, or worn from use. Many banks can replace minor damage on the spot or within a few business days if they have the denomination in their vault.
The teller will inspect the bill and decide whether it can be handled locally or needs to go to the Federal Reserve. If your bank does not stock that denomination or the damage is severe, they will give you a form to fill out and send the bill to Washington. You will not lose the money during this process—the bank will credit your account or give you a replacement bill when ready in most cases.
Sending damaged money to the Federal Reserve
If your bank cannot replace the bill on the spot, ask for the Federal Reserve's Mutilated Currency Division mailing address and a submission form. You can also mail damaged bills directly to the Federal Reserve without going through a bank, though using your bank is usually faster.
Package the damaged bill carefully in an envelope or small box. Include a written description of the damage and how it occurred—for example, "bill was torn in half and taped together" or "bill was water-damaged in a flood." Write your name, address, and phone number on the form and in the package. Mail it to the Federal Reserve's Mutilated Currency Division at the address they provide.
The Federal Reserve will examine the bill under magnification, verify the denomination, and mail you a replacement. This process takes four to twelve weeks. You will receive a letter explaining what they found and confirming that a replacement bill is on the way.
Damage that makes replacement difficult or impossible
Bills that are completely burned, chemically dissolved, or so fragmented that the denomination cannot be determined are the hardest to replace. The Federal Reserve can sometimes reconstruct bills from multiple fragments if you send all the pieces, but this requires informed analysis and takes significantly longer—sometimes several months.
If you have a bill that is mostly ash or only small pieces remain, include a detailed explanation of what happened. The Federal Reserve will tell you whether reconstruction is possible. In rare cases where the bill cannot be identified or reconstructed, they will deny the claim, but this is uncommon.
What you need to bring or send
| Replacement Route | What You Need | Timeline |
|---|---|---|
| Bank branch (minor damage) | Damaged bill, account information, ID | Same day to 3 business days |
| Bank branch (severe damage) | Damaged bill, completed form, written description | 4 to 12 weeks |
| Direct to Federal Reserve | Damaged bill, completed form, written description, return address | 4 to 12 weeks |
Common mistakes to avoid
Do not tape or glue damaged bills together before sending them to the bank or Federal Reserve. Tape makes it harder for specialists to examine both sides of the bill and can damage the surface further. If a bill is torn in half, send both pieces separately in the same envelope.
Do not assume a damaged bill is worthless. Even bills that are badly worn, faded, or partially burned can be replaced. The only bills that cannot be replaced are those where the denomination is unidentifiable or less than half remains.
Do not expect when ready replacement for severe damage. If the Federal Reserve needs to examine your bill, the process takes weeks. Plan ahead if you need the money urgently—your bank may be able to give you a replacement bill when ready while the damaged one is being processed.
Frequently Asked Questions
What if I only have half a bill?
If you have exactly half a bill or slightly less, the Federal Reserve will not replace it. You need more than half of the bill present. If you have more than half but less than a complete bill, send both pieces (if you have them) to show the full denomination and design.
Do I have to prove the money is mine?
No. The Federal Reserve replaces damaged currency based on the condition of the bill itself, not on proof of ownership. You do not need a receipt or bank statement. This is one reason the process is free—the bill itself is the proof.
Can I replace coins that are damaged?
No. The Federal Reserve only replaces paper currency. Damaged coins are handled by the U.S. Mint, and they do not replace coins under normal circumstances. If a coin is defective due to a minting error, contact the U.S. Mint directly.
What if the bank says they cannot help?
If your bank declines to process the damaged bill, you can mail it directly to the Federal Reserve's Mutilated Currency Division. Include a clear description of the damage and your contact information. The Federal Reserve handles all damaged currency that banks do not process locally.
How long does it take if I go through my bank?
Minor damage handled at the branch takes one to three business days. Damage sent to the Federal Reserve takes four to twelve weeks from the date the Federal Reserve receives it, not from the date you give it to your bank. Ask your bank for tracking information so you know when it arrives in Washington.