What the End of Penny Production Means for Cash Transactions

The U.S. Mint has ended production of new one-cent coins, commonly known as pennies. While new pennies are no longer being produced for everyday circulation, existing pennies remain legal tender and will continue to circulate.

For most clients, this change will have little to no impact on everyday banking. However, as existing penny supplies move through the financial system, penny availability may become limited or inconsistent in some locations. When pennies are unavailable, certain cash transactions may be rounded to the nearest five cents.

At City National Bank, we remain committed to helping clients understand what this change means and what to expect when completing cash transactions.

Why Penny Availability is Changing

The change is part of a nationwide transition following the decision to end production of new circulating pennies. According to the U.S. Mint, the cost of producing a penny has increased significantly over time, making continued production more expensive than the coin’s face value.

Although new pennies are no longer being produced, pennies already in circulation may still be used. The Federal Reserve will continue to recirculate existing penny supplies for as long as possible, but availability may vary as inventories change.

What’s Changing for Cash Transactions?

When pennies are unavailable, certain cash transactions may be rounded to the nearest five cents.

This change applies only when physical cash is exchanged and pennies are not available. It does not affect the way electronic transactions are processed or how account balances are maintained.

For example, rounding may apply to certain:

• Cash withdrawals
• Cash payments
• Loan payments made in cash
• Other cash transactions that require exact change in pennies

City National Bank will continue to accept pennies for deposits and payments when available and will continue to monitor guidance from regulatory authorities as this nationwide change in coin circulation continues.

What is not Affected?

This change does not affect electronic transactions or account balances. These will continue to process to the exact cent.

Transactions not affected include:

• Debit card transactions
• Credit card transactions
• ACH transfers
• Wire transfers
• Online and mobile banking transfers
• Checks posted to an account
• Account balances
• Interest calculations
• Fees or other account activity posted electronically

In short, if a transaction is not completed using physical cash, it should continue to process as usual to the exact cent.

How Rounding May Work

If pennies are unavailable, cash transaction amounts may be rounded to the nearest five cents.

At City National Bank, rounding for eligible cash transactions will be applied in the client’s favor:

• Cash withdrawals: Amounts may be rounded up in the client’s favor.
• Cash payments, including loan payments: Amounts may be rounded down in the client’s favor.

This approach helps ensure clients are not disadvantaged when pennies are unavailable for certain cash transactions.

Frequently Asked Questions (FAQs)

Are pennies going away completely?

No. Pennies already in circulation remain legal tender and may continue to be used. The change is that new pennies are no longer being produced for everyday circulation.

Will prices be rounded?

No. This update does not change prices, account balances, or posted transaction amounts. Rounding may only apply to certain cash transactions when pennies are unavailable.

Will my account balance be rounded?

No. Account balances will continue to be maintained to the exact cent. Rounding may only apply when physical cash is exchanged and pennies are not available.

Does this affect debit cards, credit cards, ACH, wires, or online banking?

No. Electronic transactions will continue to process to the exact cent.

Can I still deposit pennies?

Yes. City National Bank will continue to accept pennies for deposits and payments when available.

What happens if pennies are unavailable during a cash transaction?

If pennies are unavailable, certain cash transactions may be rounded to the nearest five cents. For eligible transactions, rounding will be applied in the client’s favor.

Will rounding apply at every banking center?

Penny availability may vary by location and over time. City National Bank will continue to monitor coin availability and regulatory guidance as the transition continues.

We’re Here to help

City National Bank remains committed to providing reliable service and clear communication throughout this transition.

If you have questions about penny availability or how this change may affect cash transactions, please contact our Client Support team at 305-448-6500 or reach out through our online contact form.