The penny is no longer being produced for everyday circulation, and now Washington is taking a closer look at another coin Americans have carried in their pockets for generations.
The nickel may be worth just five cents, but it costs the government roughly 13 cents to manufacture and distribute. That’s more than double its actual value, raising questions about whether it’s time for a change.
Congress is exploring ways to make nickels more affordable to produce, including changing the materials used to make them. While there’s no official plan to discontinue the nickel, the discussion could lead to changes in how one of America’s most familiar coins is made.
Why the Nickel Is Costing the Government So Much Money
According to Fox News, Congress has been examining the cost of producing nickels after deciding to stop making pennies for general circulation. The problem comes down to the materials and manufacturing expenses.
Today’s nickel is made from 75% copper and 25% nickel. Although it’s worth only five cents, each coin costs about 13 cents to produce and distribute. That means the government spends about eight cents more than the coin’s face value every time it makes one.
The penny had a similar problem. Before production ended, it cost approximately 3.7 cents to make a coin worth only one cent. With millions of coins produced each year, those additional costs can add up quickly.
Congress Is Considering a Cheaper Way to Make Nickels
Rather than eliminating the nickel entirely, lawmakers are considering changes that could make it less expensive to manufacture. The bipartisan Common Cents Act would give the Treasury Department greater flexibility to explore alternative materials for coin production.
One possibility involves using a zinc center with an outer nickel layer instead of the current copper-heavy mixture. The challenge is finding a cheaper material that still works with equipment Americans already use.
Vending machines, coin counters, and other machines that accept change are designed to recognize certain coin characteristics. A major change in composition could require adjustments to that equipment. That’s one reason lawmakers are considering how to reduce production expenses without creating additional problems for businesses and consumers.
Related: Pennies are no longer being made. Should you save, spend, or cash in yours?
Does This Mean Nickels Could Disappear?
Not necessarily. Although the nickel is getting more attention because of its production costs, the current discussion focuses on making the coin cheaper, not removing it from circulation.
If changes are eventually approved, newly manufactured nickels could look and function much like the ones Americans already use, even if they’re made from different materials. Existing nickels would remain valid for everyday purchases.
And if you have a jar full of old nickels at home, there’s no reason to rush out and spend them. In fact, some older nickels have collectible value that goes well beyond their original five-cent denomination.
What This Means for Your Spare Change
For now, there’s no reason to worry about the nickels in your wallet. The government is looking for a less expensive way to manufacture them, and any changes would affect future coin production rather than the value of nickels already in circulation.
The penny’s departure has brought more attention to something most people probably never considered: how much it actually costs to make the coins we use every day. And with a five-cent coin costing roughly 13 cents to produce, it’s easy to see why the nickel is now part of that conversation.
