Penny Discontinuation

Discontinuation of the Penny: What You Need to Know

With the announcement of the US Treasury confirming that penny production will be discontinued in early 2026, we wanted to provide you additional information on what you need to know or what to expect during the penny phase out process.

First, let’s discuss why did the government made the decision to discontinue the penny. Over the past 10 years, the cost to produce the penny has risen from 1.3 cents to 3.69 cents per penny. In addition, the increasing number of non-cash transactions as well as the low purchasing power of a single penny influenced the Department of Treasury to make the executive decision to discontinue its production in hopes to alleviate an area for unnecessary government spending.

Although manufacturing of pennies has been discontinued, the Federal Reserve will continue to recirculate the estimated 114 billion pennies currently in existence for as long as possible. The Treasury is encouraging the public to spend their on-hand pennies to support a smooth transition and allow retailers as well as point-of-sale system providers the time to adapt to the change.

There will be no change to the monetary value of the penny, and it will still be recognized as legal tender. However, as pennies gradually phase out of circulation, point-of-sale providers are encouraged to collaborate closely with retailers to utilize a rounding functionality for cash transactions by rounding to the nearest five cents. Only cash transactions will be affected by this change.

As of present, customers may continue depositing pennies at their local Community Bank in Cameron, Siren, or Grantsburg. We encourage all customers as well as those who may have business accounts to consult their local bank in advance to confirm specific guidelines and ensure a smooth deposit process.

For all other questions or concerns, please visit or call your local branch for more information!