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Helping Navigate the Penny Phase-Out

As of early 2026, the United States is no longer producing new pennies. This change follows a 2025 decision by the U.S. Department of Treasury to stop minting the one-cent coin after concluding that it is more expensive to make a penny than its face value. Fidelity Bank is dedicated to helping both consumer and business clients understand what this shift means and how to prepare.

Below is a straightforward guide to the key facts, practical steps you can take now, and resources to help you through the transition.

What You Need to Know

Guidance for Businesses

Guidance for Consumers

FAQs

What You Need to Know

Why the Penny Phase Out is Happening
  • The penny now costs about 3.7 cents to produce, meaning the U.S. Mint loses money on every penny it makes.
  • Production of new pennies will cease once the current stock of blanks is used (expected early 2026).
  • The decision reflects broader efforts to improve fiscal efficiency and adapt to a payments landscape increasingly dominated by digital methods.
 
What’s Changing – and What Isn’t
  • Pennies remain legal tender: You can continue to use them in cash transactions and deposit them at banks.
  • Banks and businesses may run low on pennies: Inventory is declining, and some coin distribution centers are already limiting supplies.
    • Fidelity Bank will fulfill penny orders as supply allows, although we are no longer able to order from our own supplier.
  • Electronic payments are unaffected: Card, mobile, or check transactions will continue to settle to the exact cent.

How this Affects You – Practical Guidance

 

For Businesses

Prepare for cash rounding changes

  • As pennies become scarce, many businesses will round cash totals to the nearest five cents.
    • Example: $10.02 – $10.00 | $10.03 – $10.05.
  • The recommended rounding approach is:
    • Round down when totals end in 1,2,6, or 7 cents
    • Round up when totals end in 3,4,8 or 9 cents
  • Encourage clear signage and communication with customers about how cash rounding works.

Check state and local rules

  • Some jurisdictions have specific requirements around rounding, pricing and cash acceptance. Businesses should confirm compliance with applicable laws.

Review POS and cash-handling systems

  • Consider programming point-of-sale systems to automatically round cash amounts fairly and consistently.

Encourage customers toward electronic payments

  • Promote contactless, debit/credit and mobile payment options to reduce reliance on cash change and speed up checkout.

 

Tip: Fidelity Bank offers Cash Management Services to help you get set up to accept digital payments.

For Consumers

Use electronic payments when you can

  • Payments made by debit card, credit card, mobile wallet or check are not rounded and will remain exact.

Set up direct deposit

  • Direct deposit helps avoid any cash rounding issues when receiving paychecks or other electronic credits. You can find out how to set up direct deposit at Fidelity Bank here.

Spend or deposit pennies sooner rather than later

  • While pennies remain legal tender, their availability is decreasing. Depositing them now ensures they stay in circulation where they’re needed.

For consumers, many banks (including Fidelity Bank) offer instant debit card issuance at account opening to help support electronic payments.

FAQs

Why is penny production ending?

The penny costs more to mint than its face value and the Treasury determined it is no longer fiscally responsible to continue production.

Yes – pennies remain legal tender and can be used or deposited indefinitely.

For non-cash payments, prices are unaffected. For cash purchases, rounding may result in occasional increases or decreases.

Yes, other countries, including Canada and Australia have completely stopped producing pennies. We are not the first to take this step.

They can adopt rounding procedures and should communicate changes clearly to customers. Fidelity Bank is here to help customers adapt to electronic payments and a debit card issued instantly when an account is opened at any of our Banking Centers.

Use electronic payments, which will be unaffected by the penny phase-out. Credit and debit card transactions will continue to be processed at exact amounts, with no rounding. You can also set up direct deposit to avoid any necessary rounding when it comes to your paycheck. Learn more and set up direct deposit with Fidelity Bank today.

Banks are continuing to coordinate with the federal government and other stakeholders to monitor this change, track coin circulation trends and support efforts to manage supply as efficiently as possible.

According to a July 2025 report from the Federal Reserve of Richmond, cash transactions will likely be rounded to the nearest nickel with the removal of the penny, resulting in an estimated $6.06 million cost to consumers annually, assuming transaction patterns remain unchanged.

We're Here For You Through This Change

The penny phase-out marks a historic shift in the U.S. currency system, but it’s manageable with proper preparation. Whether you’re running a business that handles cash or simply making everyday purchases, focusing on clear communication, embracing electronic payments and understanding rounding practices will keep you ahead of the transition.

Fidelity Bank is here to support you every step of the way. Contact us with any questions about how this change affects your financial needs.