Pennies Are Being Phased Out Of Circulation
The U.S. Mint has stopped producing new pennies, ending more than 200 years of production for the one-cent coin. The penny now costs more to make than it’s worth, and its usefulness in everyday transactions has dwindled.
As a result, the Federal Reserve has begun reducing distribution as existing inventory runs low, and financial institutions across the country including BankTennessee are no longer able to consistently receive pennies for use in cash transactions.
As a result, our bank may not have pennies available for cash transactions.
How the Penny Phase-Out Affects Cash Transactions
If you make a purchase or payment using cash, your total may be rounded to the nearest five cents. You can expect most merchants and banks follow the standard rounding method:
- Round down when the final amount ends in 1¢, 2¢, 6¢, or 7¢
- Round up when the final amount ends in 3¢, 4¢, 8¢, or 9¢
This rounding applies only to cash transactions. Electronic payments are not affected. Checks, debit card transactions, ACH, and mobile or online payments will still settle exactly to the penny, with no rounding.
Going Forward
As this transition continues, point-of-sale and teller systems may be updated to support rounding automatically. In the meantime, you may notice change amounts adjusted at the time of your cash transaction.
We appreciate your understanding as this national phase-out progresses.
If you have any questions, our team is happy to assist.
