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The End of the Penny: What It Means for You
End of the Penny
CalPrivate Bank believes in keeping you informed about changes that impact your finances.
As you may know, after 232 years, the US Mint stopped producing pennies in November 2025. This action was taken by the US Treasury in part due to reduced use of the penny and increasing production costs (it costs 3.69 cents to produce a penny, exceeding its value).
Recently, there has been growing discussion around the discontinuation of the penny, one of the smallest denominations in U.S. currency. While this change may seem minor, it carries implications for how transactions are rounded and managed—both for consumers and business owners.
Why Were Pennies Discontinued?
The cost of producing a penny has long exceeded its value, making it an inefficient currency to keep in circulation.
What This Means for Consumers
When pennies are taken out of circulation, cash transactions will be rounded to the nearest five cents. Here’s what you should keep in mind:
- Rounding Rules: Purchases ending in 1 or 2 cents will round down to the nearest 0 or 5, while those ending in 3 or 4 cents will round up to 5 cents. Similarly, amounts ending in 6 or 7 cents will round down to 5, and 8 or 9 cents will round up to 10. CalPrivate has made the decision to always round up to the nearest 5 cents.
- Credit & Debit Cards Are Unaffected: Electronic transactions are not rounded. Your payments via debit cards, credit cards or digital wallets will still be exact down to the penny.
- Cash Management: When using cash, carry small change like nickels and dimes to help with smooth transactions.
Tips for Consumers:
- Deposit your pennies at your nearest CalPrivate Bank branch, this will help to increase the available supply.
- Use electronic payment methods for transactions, especially for larger or precise payments.
What Businesses Should Consider
For businesses that handle cash, the discontinuation of the penny will require adjustments:
- Pricing Adjustments: Consider rounding your prices to end in .00, .05, or .10 to align with the new cash rounding system (don’t forget to factor in sales taxes into final pricing).
- Cash Registers & Accounting Systems: Update your point-of-sale (POS) and accounting software to manage rounding correctly to avoid discrepancies.
- Communicating with Customers: Inform your customers about the rounding to maintain transparency and trust.
- Cash Handling: Train staff in new cash handling practices and encourage the use of cashless payments when possible.
Tips for Business Owners:
- Review your pricing structures and adjust where logical to minimize rounding confusion.
- Check with your POS provider about software updates that incorporate rounding rules.
- Develop clear communication materials like signage or website notices explaining the change to your customers.
- Embrace digital payments to reduce reliance on cash and improve transaction efficiency.
Looking Forward
CalPrivate Bank is committed to supporting you through this transition. While the penny may be making its exit, your financial well-being remains our priority. Whether you are a consumer or a business owner, being proactive and informed will make the process smooth and hassle-free.
If you have questions about managing your cash or managing payments in the penny-free future, reach out to your banker or visit your nearest branch for personal service.
Together, we will navigate this change – making financial transactions simpler, smarter, and more efficient!
Further Reading:
Penny Production Cessation FAQs | U.S. Department of the Treasury