Making Heads or Tails of it: What You Need to Know About the Penny Phase Out

Pennies are getting harder to source across the banking system. To keep cash moving smoothly for our Michigan customers and local businesses, we’re using a simple, customer-first approach for cash transactions whenever pennies aren’t available.

What should you expect at our branches?

Our teams will continue to provide pennies as they are available. When pennies are limited, we’ll explain options at the teller line and help you complete your transaction quickly. Most day-to-day banking will remain unchanged. 

How will rounding work?

If a transaction comes to an amount that would normally use pennies, we’ll keep things simple:

Default: We’ll add the odd cents to your Independent Bank account.

This only affects transactions handled at the teller window and drive thru. Card, mobile, and check payments post for the exact amount.

What stays the same?

• Cards and mobile payments: Exact amounts settle as usual.

• Checks and deposits: No change.

• Accounts and fees: Your accounts, fees, and statements do not change due to coin availability.

Tips for Michigan businesses that accept cash

From coffee shops in Grand Rapids to retailers in Bay City, many local businesses handle a high volume of small cash sales. If pennies are limited in your area, these steps can make checkout easier:

• Post a simple sign at the register: “Nearest-nickel rounding on when pennies are unavailable.”

• Train cashiers to round only when needed. Your POS can still show totals to the penny.

• Document your approach in manager notes so teams handle coins consistently.

• Keep change-making flexible. If other coins are tight, encourage exact change when possible.

The final, nationwide rounding process has not yet been announced by the Federal Government. The guidance above reflects current branch procedures and common merchant practices in Michigan and may evolve.

FAQs About Pennies

Why are pennies limited?
The U. S. Department of Treasury announced that as of 2025, they are no longer producing pennies. As the circulation of pennies decreases, they will become more limited until they are eventually phased out completely. Our goal is to keep transactions moving with a simple, fair approach for customers.

Does rounding change my prices?
Nearest-nickel rounding only occurs on cash payments when pennies are not available. Card, mobile, and check payments continue to settle for the exact amount. Independent Bank will round to the nearest nickel in favor of the customer. 

Is rounding always in the customer’s favor?
Yes. At Independent Bank, when pennies are unavailable, we will round the cash total or change to the nearest nickel. This decision is left up to each individual business or merchant, so rounding may vary at other institutions and retailers. 

Will this affect my statements or tax records?
No. Electronic payments post to the penny. Cash transactions that are rounded at the register are reflected in your till totals like other cash sales.

How long will this last?
Timing can vary by area and demand. If penny availability increases, we’ll return to normal cash handling. With the U.S. Department of Treasury no longer producing pennies, they will eventually be phased completely out. Branch teams will share updates locally.

We’re here to help

Have questions about the changes in penny circulation? Visit your nearest branch or contact us.