In May 2025, the U.S. Treasury announced that it would stop minting one-cent coins, marking the end of the penny. After more than 230 years in circulation, rising costs of production and inflation have led the U.S. to start phasing out pennies. As the purchasing power of one cent continues to decline and more Americans turn to digital payments, pennies have become a less important part of everyday transactions. So while pennies won’t disappear overnight, the end of their production will mean some changes for consumers.
According to the Secretary of the Treasury, the decision to discontinue the penny was simple: it no longer met the needs of the United States. At 3.69 cents per one-cent coin, the cost of penny production far exceeds the value of these coins. While this wasn’t always the case, the rising cost of materials like zinc and copper has made minting pennies significantly more expensive, leading to a loss of $85.3 million on penny production in 2024 alone.
The U.S. isn’t the first nation to phase out low-value coins like the penny. New Zealand phased out its one, two and five-cent coins in the 1990s and early 2000s, while the Royal Canadian Mint ended production of its penny in 2012. These decisions were made for the same reasons the U.S. decided to discontinue the penny: high production costs and low value.
As businesses and consumers continue to shift to digital banking and non-cash payments, and as inflation continues to reduce the purchasing power of small change, it’s clear that pennies have become largely unnecessary in everyday transactions.
With the end of the one-cent coin’s production, many consumers want to know what happens to pennies now. Fortunately, any existing pennies are still legal tender, meaning you can spend them, save them or deposit them in a bank account.
While the U.S. Mint isn’t making any new pennies, there are still around 300 billion pennies in circulation. Over time, as pennies are lost, destroyed or stowed away, the number of one-cent coins in circulation will decline. Though the use of pennies in day-to-day cash transactions will become less common, they’ll likely remain in circulation for years, if not decades.
If you have pennies or other coins you want to deposit in your bank account, you can visit your local Seacoast Bank branch or use a coin-counting machine to convert them to cash.
Though cash isn’t most people’s preferred way to pay, many Americans are rightfully wondering about the impact on prices without pennies. For example, if a cup of coffee costs $2.99, customers paying in cash might not have four pennies, and if the customer uses dollar bills, the café might not be able to provide one penny of change.
For businesses, the end of the penny might mean they need to adjust their pricing slightly, such as rounding cash transactions to the nearest 5 cents. Though each business can ultimately choose its own prices, the symmetric rounding rule is a common way to resolve any potential issues with cash payments involving pennies. This method suggests rounding to the nearest 0 cents, 5 cents or 10 cents. So, if a transaction cost is $3.02, the price would be rounded down to $3 even. But if the cost is $3.08, the price would be rounded up to $3.10. For consumers, rounding prices could have a minor inflationary effect, but it’s unlikely to cause significant changes to the prices of goods and services.
The end of the penny may also accelerate the adoption of digital payments, particularly for businesses who want to streamline operations. Moving away from cash can simplify operations but requires a secure processing infrastructure. Seacoast Bank not only helps businesses with checking and savings accounts but also provides business payment solutions, like processing debit and credit card transactions.
The end of penny production will likely have a very minimal impact on consumer banking, primarily because the one-cent coin remains legal tender. And since most payments are made digitally, rounding adjustments for cash prices won’t affect the majority of transactions.
As retailers and banks adjust to the decline of pennies in circulation, it’s important to recognize that these changes will take time. Retailers that accept cash will have to round their prices up or down to avoid relying on pennies, while penny shortages mean banks may not always be able to provide pennies to customers upon request. In some cases, a business may choose not to accept pennies at all. As a consumer, using digital payments whenever possible can help you avoid price rounding problems, in addition to offering you more convenience and security.
If you’re not sure what to do with your pennies, here are some options:
The end of the penny marks another step toward the widespread adoption of digital payments and other cashless society trends. While the U.S. Mint is no longer producing the one-cent coin, you can still deposit pennies at banks and spend them at many retailers. As a consumer, you may notice that cash prices are changing as businesses start rounding cash transactions to avoid using pennies. But since there are still about 300 billion pennies in circulation, they’re unlikely to disappear anytime soon.
Whether you want to deposit your spare change or explore digital banking, Seacoast Bank solutions are built to help Floridians with all their financial needs. Contact us today or visit your local Seacoast Bank branch for more guidance on digital banking and coin deposits.
The U.S. Treasury Department stopped producing pennies mainly because the cost to make them significantly exceeded their value, and rising inflation has reduced the purchasing power of one cent.
Pennies remain legal tender, so you can continue to use them for purchases or bank deposits.
Cash transactions will have to incorporate rounding to avoid pennies. This means that retailers will either have to round up or down to the nearest 0, 5 or 10 cents.
With the elimination of the penny, only cash transactions will be rounded. Digital, credit, debit card and ACH payments will remain exact.
While you can still request penny rolls at your local bank, these requests will be fulfilled based on availability.
The elimination of the penny will affect cash prices, which can either be rounded up or down. However, on a larger scale, the elimination of the penny is unlikely to have a major effect on inflation.
With the discontinuation of the penny's production, charities that collect them will likely see a decrease in donations. As a result, many of these charities will have to explore new fundraising strategies.
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