Banks will exchange torn money, but the bill has to meet specific damage thresholds

If you have a bill that is torn, stained, faded, or otherwise damaged, your bank can send it to the Federal Reserve for inspection and replacement. The Federal Reserve's Bureau of Engraving and Printing maintains a Mutilated Currency Division that examines damaged bills and issues replacements when the damage meets their criteria. You do not need to be the person who damaged the bill—the bank handles the submission on your behalf, and you get new currency back.

The process is free. There is no fee to your bank, and your bank will not charge you. The timeline varies depending on how damaged the bill is and how busy the division is, but most straightforward cases take two to four weeks from the time your bank submits the bill.

The key limitation: the bill must be identifiable as U.S. currency, and enough of it must be present to prove its value. A bill that is 51 percent intact, with the serial number visible, will almost always be replaced. A bill that is 50 percent or less intact will be examined more closely, and replacement is not may provide.

Key Takeaways

  • Your bank can submit damaged bills to the Federal Reserve's Mutilated Currency Division at no cost to you.
  • Bills that are more than 50 percent intact and have a visible serial number are routinely replaced.
  • The process takes two to four weeks in most cases, though complex damage may take longer.
  • You do not need to explain how the bill was damaged—the Federal Reserve examines the bill itself, not your story.
  • If a bill is too damaged to identify or is less than 50 percent intact, the Federal Reserve may deny the claim, and you will not receive a replacement.

What counts as damage the Federal Reserve will replace

The Federal Reserve replaces bills damaged by fire, water, insects, chemicals, or physical wear. A bill that has been through a washing machine, exposed to mold, partially burned, or torn into pieces can all be submitted. The division also handles bills that have faded so badly the denomination is hard to read, or bills that have been written on or stained.

The standard is whether the bill is still identifiable as U.S. currency and whether enough material remains to confirm its value. If you have a $20 bill that is torn in half but both halves are present and clearly show it is a $20, that will be replaced. If you have a bill that is 40 percent ash and 60 percent intact but the serial number is still visible, the division will examine it closely and likely replace it.

Intentional mutilation—such as cutting a bill in half deliberately, or writing over it as a prank—is technically illegal under federal law, but the Federal Reserve does not prosecute individuals for submitting damaged bills. They examine the bill and make a replacement decision based on the damage itself, not the intent.

How to submit a damaged bill to your bank

Walk into your bank with the damaged bill or bills and tell the teller you want to submit them for replacement through the Federal Reserve. You do not need an account at that bank—most banks will accept damaged currency from non-customers. The teller will place the bill in a special envelope or form (the Federal Reserve provides these to banks), note the denomination and serial number if visible, and send it to the Federal Reserve's processing center.

Some banks ask you to fill out a brief form stating the denomination of the bill. This is routine and takes one minute. You will receive a receipt showing what you submitted. Keep this receipt until the replacement arrives, which usually comes back to the bank within two to four weeks. The bank will notify you when the replacement currency arrives, and you can pick it up at the same branch.

If you have multiple damaged bills, you can submit them all at once. The Federal Reserve processes them together, and you will receive replacements for all of them (or a denial for any that do not meet the threshold).

Bills that are too damaged to replace

If a bill is less than 50 percent intact, the Federal Reserve will examine it, but replacement is not may provide. A bill that is mostly ash, or mostly missing, or where the serial number cannot be identified, will likely be denied. In these cases, you will not receive a replacement, and the damaged bill will not be returned to you.

If you have a bill that is only partially present—for example, you have one half of a torn bill but not the other half—the Federal Reserve may still replace it if the half you have is more than 50 percent intact and the serial number is visible. But if you have only a small corner or fragment, replacement is unlikely.

There is no appeal process if your claim is denied. The Federal Reserve's decision is final. If you believe the bill should have may have access to, you can submit it again through your bank, but the division will reach the same conclusion based on the same damage assessment.

What happens if you find damaged money in circulation

If you receive a damaged bill as change or find one on the street, you can still submit it for replacement. The Federal Reserve does not care whether you damaged it or whether it was already damaged when you received it. The only requirement is that you own it now and want to exchange it for a replacement.

This is one reason the Federal Reserve maintains the Mutilated Currency Division: bills wear out in circulation, get damaged by weather or accidents, and need to be replaced to keep the money supply functional. Your bank is the easiest route, but you can also mail damaged bills directly to the Federal Reserve's Mutilated Currency Division if your bank refuses to submit them (though most banks will).

Timing and what to expect

From the moment you hand the bill to your bank teller, the process typically takes two to four weeks. The teller submits it to the bank's regional Federal Reserve branch, which batches submissions and sends them to the Mutilated Currency Division in Washington, D.C. The division examines the bill, makes a replacement decision, and sends the new currency back to your bank.

Your bank will call you or send a notice when the replacement arrives. You then return to the bank and exchange your receipt for the new bill. If the claim is denied, your bank will notify you of that as well, usually with a brief explanation of why the bill did not meet the threshold.

In rare cases—such as bills damaged by fire or disaster—the division may take longer than four weeks. But for routine damage like tears, stains, or water damage, two to four weeks is standard.

Frequently Asked Questions

Can I exchange a bill that is torn in half if I have both pieces?

Yes. If both halves are present and together show more than 50 percent of the bill, with the serial number visible, the Federal Reserve will replace it. Tape the pieces together before you submit them, or just hand both pieces to your bank teller—either way works.

What if my bank says they will not submit damaged money?

Most banks will submit damaged currency, but if yours refuses, you can mail the bill directly to the Federal Reserve's Mutilated Currency Division, Bureau of Engraving and Printing, 14th and C Streets SW, Washington, D.C. 20228. Include a letter stating the denomination and explaining the damage. The division will examine it and mail a replacement or a denial letter back to you.

Do I have to explain how the bill got damaged?

No. The Federal Reserve examines the bill itself, not your explanation. You can straightforward tell your bank teller the bill is damaged and needs replacement. The division does not investigate how the damage happened.

Will I get the same bill back, or a different one?

You will receive a new bill. The damaged bill is destroyed by the Federal Reserve and never returned to you. The replacement is a new bill from the Bureau of Engraving and Printing.

What if the bill is so old it is no longer in circulation?

Age does not matter. Even if the bill is a $2 bill, a silver certificate, or an older design, the Federal Reserve will replace it if the damage meets the threshold and it is still identifiable as U.S. currency. The denomination and design are irrelevant—only the damage and the ability to identify the bill matter.