Posted On: November 25, 2025 by Prevail Bank in: Banking / Money Management
Farewell to the Penny: What you need to know.
The penny will no longer be minted (made) in early 2026, which raises a bunch of questions. Why is the penny being phased-out? Will pennies still be available after that date? Can banks continue to distribute pennies? How will businesses handle cash transactions moving forward?
Here are the facts as we know them:
- Pennies are still legal tender. They remain useable for transactions, deposits, and withdrawals, though their availability will gradually decline as existing coins fall out of circulation.
- No collection planned. Banks, businesses, and consumers will not be required to turn in pennies, nor will coins in circulation lose their value.
- Production cost exceeds value. It costs about 3.7 cents to make a one-cent coin. This is the 19th consecutive year where manufacturing costs have outweighed value. The phase-out reflects a shift toward efficiency.
- Other countries provide successful precedents. Canada, Australia, and New Zealand have successfully eliminated their lowest-denomination coins and use rounding rules for cash transactions. The United States will likely do something similar; Cash transactions will likely be rounded to the nearest five cents, while digital transactions would remain exactly the same.
- Policy discussions are underway. Bills like the Common Cents Act seek to formalize this change and establish consistent cash-transaction rounding rules.
- Estimated Effect on Consumers. Rounding cash transactions could cost U.S. consumers about $6 million per year in total, spread across millions of purchases. Most cash-users are unlikely to notice more than a penny or two difference over time.
So, while the penny may be heading into retirement, leaving behind a legacy; it’s not disappearing overnight. You’ll still be able to use them, stash them in jars, or find them under couch cushions for years to come. The big change is that new ones won’t be made after early 2026, and cash transactions might start rounding to the nearest nickel—just like other countries have done successfully. There will be adjustment period for both consumers and retailers, but we’ll get through it.
Prevail Bank – Member FDIC
