Banks replace damaged U.S. currency, but the process depends on how damaged it is

If your money is torn, stained, faded, or otherwise damaged, your bank can send it to the Federal Reserve for replacement. You do not need to prove how it got damaged. The Federal Reserve's Currency Redemption Program handles this — it is a free service that has existed since the 1860s.

The catch is timing and condition. If your bill is still recognizable as U.S. currency and you can identify the denomination, the Federal Reserve will replace it. If more than half the bill is missing or if it is so deteriorated that the denomination cannot be determined, replacement becomes harder or impossible. Most everyday damage — coffee spills, ink marks, small tears, fading from washing — falls well within what the Federal Reserve will replace.

Key Takeaways

  • Your bank can send damaged money to the Federal Reserve at no cost, and the Federal Reserve will replace it with new bills.
  • The bill must be identifiable as U.S. currency and you must be able to tell what denomination it is for replacement to happen.
  • If more than half the bill is missing, the Federal Reserve may deny the claim, though they examine each case individually.
  • The process takes two to four weeks because the bill travels to a Federal Reserve facility and is examined by hand.
  • You do not need to explain what happened to the money — the Federal Reserve does not require a reason or proof of loss.

How to start the replacement process at your bank

Walk into your bank with the damaged bills and tell a teller you want to exchange them for new currency. Do not try to tape the bills back together or clean them first — bring them as they are. The teller will take them and fill out a form documenting the damage and the amount.

Your bank will then send the bills to the nearest Federal Reserve branch. This is not the same as a regular bank branch — it is a regional facility that handles currency for all banks in that area. The Federal Reserve examines the bills and decides whether to replace them. If they approve, new bills are sent back to your bank, which contacts you to pick them up or deposits them into your account.

The whole process usually takes two to four weeks. Some banks charge a small fee for this service, though many do not. Ask your teller whether there is a fee before you hand over the money.

What counts as damaged enough to replace

The Federal Reserve replaces bills that are torn, burned, faded, stained, moldy, or otherwise worn. A bill does not have to be in perfect condition — it just has to be identifiable. If you can see the serial number and determine the denomination, the Federal Reserve will almost certainly replace it.

Bills that have been run through a washing machine, left in a flooded basement, or exposed to fire are common cases. A bill that is half-burned, heavily water-damaged, or covered in mold can still be replaced as long as enough of it remains to prove what it is. The Federal Reserve has replaced currency recovered from house fires, buried money, and bills that have been in the ground for years.

The one hard rule is that more than half the bill must remain. If you have only a corner of a $20 bill, the Federal Reserve will not replace it. If you have three-quarters of the bill, they will. The Federal Reserve also will not replace bills that are counterfeit or that have been deliberately altered or defaced.

What happens if the Federal Reserve denies your claim

Denial is rare. The Federal Reserve examines each bill individually and gives the benefit of the doubt when the denomination and authenticity are clear. They deny claims mainly when more than half the bill is genuinely missing or when the bill is so deteriorated that no one can tell what it originally was.

If your claim is denied, your bank will return the damaged bills to you. You cannot appeal the decision to the Federal Reserve — the examination is final. However, you can ask your bank to send the bills again if you believe the Federal Reserve made an error. Some people have had success resubmitting bills with a written explanation of the damage, though this is not may provide to change the outcome.

Damaged money from natural disasters or accidents

If you lost money in a flood, fire, or other disaster, the Federal Reserve will replace it through the same process. You do not need to prove the disaster happened or show insurance documents. Bring what remains of the bills to your bank, and they will handle the rest.

After major disasters, the Federal Reserve sometimes sets up temporary redemption centers in affected areas so people can exchange damaged currency on the spot. This happened after Hurricane Katrina and other large-scale events. If a disaster has recently affected your area, ask your bank whether a temporary center is operating nearby.

Coins and currency that is not U.S. dollars

The Federal Reserve replaces damaged U.S. paper currency only. Damaged coins are handled differently — you can exchange them at most banks for face value, but the bank does not send them anywhere for replacement. If a coin is so worn that you cannot read the date or denomination, some banks will still exchange it, though this is at the bank's discretion.

Foreign currency — euros, pounds, pesos, or any other country's money — is not replaced by the Federal Reserve. If you have damaged foreign money, you would need to contact the central bank of that country, which is usually not practical. Most banks will not exchange damaged foreign currency at all.

Frequently Asked Questions

Do I have to tell the bank why my money got damaged?

No. The Federal Reserve does not require an explanation. You can straightforward tell your teller the bills are damaged and ask for replacement. The bank fills out a form describing the condition, but you are not asked to provide a reason or proof of what happened.

Can I replace money that was damaged years ago?

Yes. There is no time limit on when you can exchange damaged currency. If you find old, faded, or deteriorated bills in a drawer or attic, you can take them to your bank at any time and request replacement.

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

Most banks will send damaged currency to the Federal Reserve, but some smaller banks or credit unions may decline. If your bank refuses, try a different bank in your area — they can submit the claim on your behalf even if you do not have an account there, though some may charge a fee.

Will the Federal Reserve replace money that is partially burned?

Yes, as long as more than half remains and the denomination is identifiable. Partially burned bills are examined carefully, but the Federal Reserve regularly replaces currency damaged by fire. Bring what you have to your bank without trying to repair or clean it.

How much damaged money can I exchange at once?

There is no limit. You can bring in a handful of damaged bills or a large bag of them. The Federal Reserve will examine all of it and replace what meets their standards. The process takes the same amount of time whether you are exchanging $10 or $10,000.