FAQ: Government Discontinuation of the Penny
- Why is the government stopping penny production?
The U.S. Mint announced that it will discontinue producing pennies due to the rising cost of manufacturing and distributing the coin. In recent years, it has cost more than one cent to make a single penny. Ending production is intended to reduce expenses and improve efficiency.
- Will pennies still be considered legal tender?
Yes. All existing pennies in circulation will remain legal tender. You may continue to use them for purchases, deposits, loan payments, and any other banking transactions.
- Can I still deposit pennies at the bank?
Yes. Our bank will continue to accept penny deposits in coin rolls or in bulk, just as we do today. There is no deadline for depositing pennies.
- Will the bank still provide pennies for withdrawals or coin orders?
We will continue to provide pennies as long as our supply lasts. Over time, availability may decrease as pennies naturally leave circulation, and we may limit penny orders depending on inventory.
- How will this change affect cash transactions?
Businesses may choose to round cash transactions to the nearest nickel once pennies become less available. This rounding applies only to the final cash total, not to listed prices. Electronic payments (debit, credit, ACH, etc.) will continue to settle to the exact cent.
- What happens to the pennies the bank receives?
Pennies turned in at the bank will be sent to the Federal Reserve for sorting and redistribution until the circulating supply naturally declines.
- Will this change affect my accounts or loans?
No. Account balances, loan payments, interest calculations, and electronic transactions will continue to be calculated to the exact cent. Only the availability of the physical penny is changing.
- How long will pennies continue to circulate?
Even without new production, pennies may remain in circulation for many years.
- What you can do?
For Individuals
- Use electronic payments when possible. Card, mobile wallet, and online payments avoid any rounding at checkout.
- Roll and redeem spare pennies. Bring in loose pennies to exchange for higher-value coins or deposit them into your account.
- Plan for rounding on cash purchases. Keep a small amount of nickels on hand to make cash totals easier.
For Small Businesses
- Prepare customers for rounding. If you choose to round final cash totals, post a clear notice at registers.
- Adjust coin ordering. Monitor your supply of small change and plan for reduced penny availability in the future.
- Encourage digital payments. Offering tap-to-pay or mobile wallet options can reduce the need for physical coins.
- Review your point-of-sale system. Ensure your register or POS can handle rounding if your business decides to implement it.
10. Where can I get updates?
We will update this FAQ as the government releases additional information. You may also visit the Federal Reserve, US Mint or the American Bankers Association websites for official updates and additional information.
Federal Reserve
US Mint
American Bankers Association