How Coins Get Into and Out of the Economy

Many people don’t think about how coins get from their pockets to banks, retailers and other consumers. But Federal Reserve Banks and commercial banks think about it all the time, as they work to keep a steady flow of coin moving through the economy.

American currency is made up of bills and coins, including pennies, nickels, dimes, quarters and dollars. A single penny is worth one cent, a nickel makes five cents, a dime makes ten cents and a quarter makes 25 cents. A dollar is made up of 100 cents, or one unit of currency.

The Federal Reserve System helps keep money in circulation by providing a variety of coin-handling services to depository institutions, such as banks and credit unions, as well as businesses and individuals that use exact change for purchases or deposits of cash. The Federal Reserve also partners with armored carriers, which transport and store coin for the central bank. In addition, the Reserve Banks contract with coin terminals that allow the public to deposit and withdraw coins on a retail basis.

During the COVID-19 pandemic, some of these coin-handling activities slowed down, which reduced available coin inventories in some areas. To address this, the Fed capped coin orders and convened a U.S. Coin Task Force that included representatives of the mint, armored carriers, banking associations and retailers.

To make up for this shortfall, some businesses and financial institutions took action to encourage people to spend their coins by using them for purchases or putting them into the bank or at coin kiosks. Other measures include encouraging people to save their change by using it for small purchases or donating it to charities.

In the long term, a stable flow of coin into and through the economy is needed. The Federal Reserve has a number of ongoing projects that are helping to improve the coin-handling and delivery processes. The goals are to increase the speed at which coin is put into and pulled out of circulation, while reducing costs and the risk of counterfeiting and loss.

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Some people hold on to pocket change for years, accumulating a mountain of pennies and nickels that they never use. This can be a pain to deal with, and it doesn’t benefit the community by keeping those coins out of circulation. Instead, those coins can be used to help other people and businesses, and they’ll be put back into circulation. To do that, they need to leave those change jars. That’s why it’s important to regularly sort and roll your pocket change, so it can be put back into the economy.