Yes, banks will exchange damaged money, but the process depends on how damaged it is and which bank you use
If your cash is torn, stained, faded, or otherwise worn, your bank will almost certainly exchange it for you at face value. You walk in with the damaged bill, hand it to a teller, and walk out with a replacement. No forms, no waiting period, no loss of value. The Federal Reserve backs this — banks are required to accept damaged currency from customers and send it to the Fed for replacement.
The catch is that "damaged" has a specific meaning. A bill that is half-destroyed, missing a large piece, or so deteriorated that you cannot read the serial number may be rejected or sent to the Bureau of Engraving and Printing for inspection rather than simply swapped at the counter. A bill that is merely dirty or slightly torn will be exchanged immediately.
Some banks make this easier than others. Large national banks with high teller volume usually handle it without question. Smaller banks or credit unions may ask you to fill out a form or may send the bill to the Federal Reserve themselves, which takes longer but still results in replacement.
Key Takeaways
- Banks exchange torn, stained, or faded bills for new ones at full face value with no fee or loss.
- Severely damaged bills—missing more than one-quarter of the note or illegible—may require inspection by the Bureau of Engraving and Printing, which takes weeks.
- Large banks typically exchange damaged money over the counter; smaller institutions may require a form or send the bill to the Federal Reserve.
- You do not need to be a customer of the bank to exchange damaged currency, though some branches may refuse non-customers.
What counts as damaged money your bank will swap immediately
A bill is considered damaged but exchangeable if it is still recognizable as U.S. currency and more than half of it remains intact. This includes bills that are torn along an edge, creased or folded, stained with coffee or dirt, faded from sun exposure, or slightly burned at the corners. The serial number and portrait should still be visible enough to identify the denomination.
Tellers see this constantly—bills pulled from washing machines, damaged in fires, chewed by pets, or simply worn thin from years in circulation. Your bank's teller drawer likely contains a small stack of damaged bills waiting to be sent to the Federal Reserve. When you hand over a damaged bill, the teller will inspect it briefly, confirm it meets the threshold, and hand you a replacement from their drawer or order one from their vault.
The exchange happens at the counter and takes minutes. You receive the full face value. There is no documentation required for minor damage.
When the Federal Reserve gets involved and how long it takes
If a bill is severely damaged—burned beyond recognition, missing a large section, or so deteriorated that the serial number cannot be read—the teller will not exchange it on the spot. Instead, they will send it to the Federal Reserve's cash processing center, which sorts and inspects damaged currency. The Fed then forwards bills that are too damaged to identify to the Bureau of Engraving and Printing for final information.
This process takes two to four weeks. You will receive a replacement bill by mail once the Fed confirms the denomination. You still receive full face value; there is no deduction or fee. The delay is the only cost.
Some banks will give you a receipt and ask for your contact information so they can notify you when the replacement arrives. Others may ask you to return to the branch to pick it up. Ask the teller what their procedure is before you leave.
What happens if more than half the bill is missing
If you have a bill with a large piece missing—say, a quarter or more of the note is gone—the bank may refuse to exchange it at all, even after Federal Reserve inspection. The Fed's rule is that if less than half of the bill remains, it cannot be verified as genuine U.S. currency and therefore cannot be replaced.
This is rare in everyday life. It usually happens when a bill has been in a fire, run through machinery, or buried for years. If this occurs, the teller will explain that the bill cannot be exchanged and will return it to you. You have lost the value of that bill.
There is no appeal process or workaround. The Bureau of Engraving and Printing makes the final call, and their decision is based on whether enough of the bill remains to prove it was genuine currency.
Do you have to be a customer to exchange damaged money
Legally, no. The Federal Reserve requires banks to exchange damaged currency for any person, not just account holders. However, individual banks set their own policies, and some branches—particularly smaller ones or those in high-crime areas—may decline to serve non-customers.
Your best bet is to call ahead and ask. Say something like: "I have a damaged bill I need to exchange. Do you exchange currency for non-customers?" Most large banks will say yes. If your bank refuses, try another branch of the same bank or a different bank in your area.
If you are a customer, there is no reason to hesitate. Walk up to any teller and hand over the bill.
How to prepare damaged money before you go to the bank
Do not try to tape the bill back together or clean it aggressively. Tape makes it harder for the teller to inspect and may actually disqualify the bill from exchange. If the bill is dirty, a gentle rinse under cool water is fine, but let it air dry completely before you bring it in. Do not use heat or a dryer.
Bring the bill in a small envelope or plastic sleeve so it does not get further damaged in your wallet or pocket. If you have multiple damaged bills, bring them all at once—the teller can process several in one transaction.
You do not need to call ahead for minor damage. Walk in during normal business hours and go to any teller. For severely damaged bills, a quick call to confirm the branch handles Federal Reserve exchanges can save you a wasted trip, though most do.
What to do if a bank refuses to exchange your damaged bill
If a teller refuses to exchange a bill that you believe is still more than half intact and identifiable, ask to speak to a manager. Explain that the Federal Reserve requires banks to exchange damaged currency. The manager may override the teller's decision or may confirm the bank's policy.
If the branch still refuses, try a different branch of the same bank or a competing bank. You can also contact the Federal Reserve directly—they maintain a list of banks in your area that handle damaged currency exchanges. Call the Federal Reserve's main number for your region and ask for the cash services department.
As a last resort, you can mail the bill directly to the Bureau of Engraving and Printing with a letter explaining the damage. They will inspect it and mail you a replacement if it qualifies. This takes four to six weeks and requires you to trust the mail, so it is not ideal, but it is an option if no local bank will help.
Frequently Asked Questions
Can I exchange a bill that is half burned?
If more than half of the bill remains and you can still identify the denomination and serial number, yes. The teller will send it to the Federal Reserve for inspection, and you will receive a replacement by mail in two to four weeks. If less than half remains, the bill cannot be replaced.
What if I washed a bill by accident and it is now falling apart?
Bring it to the bank as soon as possible. Even if it is in pieces, the teller can send all the pieces to the Federal Reserve together. The Fed can often reconstruct enough to confirm the denomination and issue a replacement. Do not throw away any pieces.
Do I lose money if the bank exchanges my damaged bill?
No. You receive the full face value of the bill, whether the exchange happens at the counter or through the Federal Reserve. There is no fee or deduction. The only cost is time if the bill is severely damaged and must be inspected.
Can I exchange foreign currency or old U.S. bills at my bank?
No. Banks only exchange damaged U.S. currency currently in circulation. Foreign money and old or rare bills must be handled through currency exchange services or collectors. Your bank's teller cannot help with these.
What if the bill is counterfeit?
If a teller suspects a bill is counterfeit, they will not exchange it and may contact law enforcement. This is rare. If you believe you have received counterfeit currency, contact your local police or the U.S. Secret Service, not your bank.