Banks are not planning to stop accepting pennies, but the penny's future is genuinely uncertain

Your bank will still take pennies today, and there is no announced date when that will change. However, the penny has been losing value for decades — it now costs more than one cent to make a penny — and there is real debate in Congress about whether the U.S. should stop producing them altogether. If that happens, banks would eventually stop accepting them as currency, though the timeline would be years, not months.

The confusion often comes from news stories about other countries phasing out their smallest coins, or from proposals that sound more certain than they actually are. The U.S. penny is still legal tender, still being minted, and still accepted everywhere. But understanding why people talk about getting rid of it, and what would actually have to happen first, helps you see whether this is something that affects how you handle cash.

Key Takeaways

  • Banks accept pennies now and have no announced plan to stop; the U.S. Mint still produces them regularly.
  • The penny costs more to manufacture than its face value, which is why economists and lawmakers periodically propose discontinuing it.
  • If the U.S. stopped minting pennies, it would take Congressional action and years of transition before banks stopped accepting them.
  • Other countries have phased out their smallest coins without major disruption, but the U.S. has not yet taken that step.
  • Rounding prices to the nearest nickel (as Canada does) would be the most likely outcome if pennies were discontinued.

Why the penny costs more to make than it is worth

The U.S. Mint manufactures pennies at a loss. In recent years, the cost to produce a single penny has ranged from about 1.5 to 2.5 cents, depending on the price of copper and zinc. That means the government spends more money making the coin than the coin is worth — a situation that has existed for years and keeps getting worse as metal prices fluctuate.

This is the core reason why people talk about eliminating the penny. If you are spending $1.5 million a year to produce coins worth $1 million, the math does not work. The nickel has similar problems but is used more frequently in transactions, so it has not faced the same pressure to disappear.

What Congress would have to do to discontinue the penny

Stopping penny production is not something a bank or the U.S. Mint can decide on their own. It requires an act of Congress — a law passed by both the House and Senate and signed by the President. Several bills have been introduced over the years to discontinue the penny, but none have passed both chambers.

Even if Congress passed such a law, the transition would not be when ready. The government would likely announce the change years in advance, continue accepting pennies at banks and the Federal Reserve for a long period, and gradually phase them out of circulation. This is how other countries have handled it: Canada stopped producing the penny in 2012 but continued accepting them at banks for years afterward.

How other countries have phased out their smallest coins

Canada discontinued the penny in 2013 after determining it cost too much to produce and was rarely used in everyday transactions. When the penny stopped being minted, retailers began rounding cash transactions to the nearest nickel — a purchase of $5.03 would round down to $5.00, while $5.04 would round up to $5.05. Credit card and digital transactions were unaffected.

Australia, New Zealand, and several European countries have done similar things with their smallest coins. None of these transitions caused major economic disruption. Prices did not spike, and people adapted quickly. The rounding typically favors consumers and retailers equally over time, since some transactions round up and others round down.

What would actually change if the penny disappeared

If the U.S. discontinued the penny, the most likely outcome would be rounding to the nearest nickel for cash transactions only. Digital payments — debit cards, credit cards, online purchases, checks — would continue to work exactly as they do now, down to the cent. Only people paying with physical cash would experience any change.

Banks would stop accepting pennies for deposit only after a transition period, probably several years. During that time, you could still bring pennies to your bank and exchange them for other coins or bills. The Federal Reserve would also accept them. After the transition period ended, pennies would no longer be legal tender, and banks would no longer accept them.

When this might actually happen

There is no timeline. Congress has not passed a law to discontinue the penny, and there is no bill currently moving through both chambers with strong support. Proposals come up periodically — usually when metal prices spike and the cost to produce a penny becomes especially painful — but they have not gained enough momentum to pass.

If you are asking because you have a large collection of pennies, there is no rush to do anything with them. They remain legal tender and will continue to be accepted at banks for the foreseeable future. If you straightforward want to get rid of them, most banks will exchange them for other denominations, and many grocery stores have coin-counting machines that do the same.

Frequently Asked Questions

Can I still use pennies to pay for things?

Yes. Pennies are legal tender and are accepted everywhere in the U.S. There is no announced date when that will change. If you prefer not to carry them, you can deposit them at your bank or exchange them for other coins.

What happens to pennies I already have if they stop being made?

They would remain legal tender for a long transition period — likely several years. You could bring them to your bank and exchange them for other money. After the transition period ended, they would no longer be legal tender, but that would not happen without years of advance notice.

Would prices go up if we stopped using pennies?

Probably not. Canada's experience shows that rounding to the nearest nickel does not cause inflation. Some transactions round up and others round down, and the effects balance out over time. Digital transactions would be unaffected entirely.

Why does the government keep making pennies if they lose money on them?

Habit and politics. Changing currency requires Congressional action, and there is no strong political will to do it despite the economic argument. Some people also believe pennies are important for transactions and prices, even though the evidence from other countries suggests otherwise.

Are pennies worth collecting?

Most circulated pennies are worth face value only. Rare dates or mint marks can be worth more to collectors, but you would need to research specific coins. If you have a large quantity of regular pennies, your bank will exchange them for other denominations.