What Is Coin Currency?

What Is Coin Currency?

Coin currency is a type of money that is made of a precious metal, such as gold or silver. In addition to their metallic value, these coins often have a face value, which determines how much they are worth in terms of fiat currency. The face value of a coin is determined by government decree and is distinct from the actual metal content in the coin.

Unlike paper money, which has no intrinsic value, most coin currencies are backed by their status as legal tender. As such, they have a monetary value established by law and are used as payment for goods and services. Coins are minted with a variety of designs, sizes and metal compositions. Some coins are bimetallic, containing two different metals in the same coin.

In the United States, there are five different coin denominations in circulation: a dollar, half dollar, quarter, dime and penny. The cent, five-cent and ten-cent coins were originally made of a silver alloy, while the dime, quarter and penny were made of copper. The one-cent coin, which was previously made of nearly pure copper, changed to a nickel-copper alloy in 1982 due to rising metal prices.

Some people collect coins, especially those with rare or historical significance. A coin’s collector’s value is determined by its condition, specific historical relevance, rarity, quality, beauty of design and general popularity with collectors. Bullion coins, such as the American Gold Eagle and Canadian Maple Leaf, have a face value but are not circulating currency. These coins are mainly valued for their bullion metal content.

The melting down or lightening of coins for their metal content is illegal in the United States. However, the Treasury Department has permitted it in limited cases when the cost of converting the coins to cash exceeded their face value. This practice occurred from 1967 to 1969 for silver coins and 1974 to 1978 for pennies and nickels.

Coins can be deposited at most banks, credit unions and other financial institutions. The most convenient option is to use a coin machine. If your bank does not have a coin machine, you can still deposit coins in person by rolling them. This process is usually free, although some banks require that you roll your own change, which can be time-consuming.

Another way to put your coins to good use is to give them to friends, neighbors or a local charity. If you have many small denominations of coins, consider giving them to a child’s school. Most elementary schools teach coin-counting or math lessons and would welcome the practice material. You can also give your coins to a local thrift store. They may be able to sell them or put them in the coin machines at their stores. The proceeds benefit the charity and can help children in need. If the coins are no longer in good condition, they can be melted down and used for other purposes. However, many people prefer to keep their old change because they enjoy the look and feel of it.