The Penny Stopped Being Worth Making

In fiscal year 2024, striking and distributing a single Lincoln cent cost the U.S. Mint 3.69 cents — nearly four times its face value, a loss the Mint calls negative seigniorage.▸ Multiplied across the more than 3 billion pennies minted that year, the loss came to $85.3 million, the 19th straight year the coin has cost more to make than it's worth. The Treasury Department placed its final order for penny blanks in May 2025, and on November 12, 2025 the U.S. Mint in Philadelphia struck the last circulating one-cent coin. Ending production, the Treasury projects, saves about $56 million a year in reduced material costs. The bill for the transition — modest overall, but concentrated — falls on cash users, and hardest on the households with no bank account to fall back on.

The penny wasn't the only denomination losing money.▸ In FY2024 the nickel cost 13.78 cents to produce against a 5-cent face value — a loss of $17.7 million on 202 million nickels minted, according to the Richmond Fed's analysis of the Mint's 2024 Annual Report. The dime and quarter run the other way: a dime costs 5.76 cents to make against a 10-cent face value, and a quarter costs 14.68 cents against 25 cents — both denominations turn a profit for the Mint.

Because dimes and quarters are profitable, the Mint's circulating-coin program as a whole didn't lose money in FY2024 — it just used the profit from the larger coins to cover the smaller ones.▸ Dimes and quarters together generated $201.2 million in seigniorage; $85.3 million of that covered the penny's loss and $17.7 million covered the nickel's, leaving $98.2 million in net seigniorage retained. The penny was, by a wide margin, the single biggest drag on that total — which is the arithmetic the Treasury pointed to in ending its production.

Roughly 114 billion pennies remain in circulation and stay legal tender indefinitely, but as they thin out, retailers are expected to round cash transactions to the nearest five cents — electronic payments are unaffected and continue to settle to the exact cent.▸ Using a Federal Reserve-run survey of real consumer transactions (the 2023 Diary of Consumer Payment Choice, 4,671 adults, 24,728 transactions), Richmond Fed economists estimate that rounding will cost U.S. consumers about $6.06 million a year in aggregate — a small "rounding tax," because purchase totals skew toward endings that round up more often than down. That national total is modest. It isn't evenly distributed: only cash transactions are rounded, and the FDIC's 2023 survey of unbanked and underbanked households found 5.6 million U.S. households — 4.2% of all households — have no bank or credit union account at all, of which two-thirds, or roughly 3.7 million households, rely entirely on cash. Those are the households with no debit card to route around a nickel-rounded total; the modest national tax lands disproportionately on them.

The number could have been much larger.▸ The nickel loses more per coin than the penny did (13.78 cents to produce a 5-cent coin), and the same Richmond Fed analysis finds that eliminating it too would raise the rounding tax to roughly $55.6 million a year — more than nine times the penny-only figure, because more transaction totals would fall outside a nickel-based rounding grid.

Figures describe U.S. Mint circulating-coin production and Federal Reserve/FDIC survey data at the national level; state-level sales-tax rounding rules, which vary by jurisdiction, are not itemized here.