The End of the U.S. Penny

The U.S. Treasury Department has confirmed that production of the penny is coming to an end, and banks across the country are already beginning to feel the effects. The Federal Reserve is gradually limiting penny orders as existing supplies are depleted, and many banks are no longer able to order additional pennies.

Although this change will affect how cash transactions are handled, it doesn’t have to be disruptive. With early planning and good communication, both consumers and businesses can make the transition smoothly.

Why the Penny Is Going Away

Production of new pennies is ending in order to reduce government spending. Minting and distributing pennies costs more than they’re worth, and demand for small coins continues to decline as cashless payments rise.

What It Means for Consumers

For most people, the change will be simple. When pennies are no longer available, cash transactions may be rounded to the nearest nickel.

• A total of $10.02 might round down to $10.00.
• A total of $10.08 might round up to $10.10.

Rounding will apply only to cash payments. Debit, credit, and check transactions will continue to process exact amounts as they always have.

If you tend to keep jars of coins at home, now is a great time to deposit them; banks will continue to accept pennies even after they stop being circulated.

What It Means for Businesses

For businesses, especially those who handle frequent cash transactions — such as restaurants, retailers, and convenience stores — this change may require a few adjustments.

Each business may handle the phase-out differently.

For example, some may:

• Round cash totals to the nearest nickel.
• Adjust pricing to end in a 0 or 5 (even after tax) to eliminate rounding.
• Encourage digital or card payments to maintain exact totals.

How Western State Bank is Preparing

At Western State Bank, we’re currently evaluating how we’ll handle check-cashing and change orders when pennies are no longer available. We’re also reviewing businesses’ coin-order data and discussing ways to encourage consumer penny deposits to help ensure that businesses with high cash volumes continue to have access to the coins they need for as long as possible.

Why We’re Sharing This Now

Our goal is to help our communities prepare early — not just our customers, but everyone who lives and does business here. Whether you’re a consumer curious about what’s happening or a local business owner developing your own plan, early awareness makes the transition easier.

At this time, the Treasury has not yet released detailed guidance on how rounding practices will be applied nationwide. If and when that guidance is issued, Western State Bank will update our website, share details with our business customers, and ensure the public has clear, accurate information about what to expect.

Stay Informed

We’ll continue to share updates as the national penny phase-out progresses and our own procedures are finalized.

If you have questions about how this change could affect your cash handling or business operations, please contact your local Western State Bank location, or follow us on social media for updates as they happen.