By Stephanie Meredith
September 21, 2020
The U.S. Mint produces more than 10 billion circulating coins a year. But it doesn’t distribute circulating coins to the public. The Mint relies on Federal Reserve Banks to put the coins into circulation. Learn about how pennies, nickels, dimes, and quarters enter circulation and reach your hands.
The Mint is the issuing authority for coins. It sets the production numbers and makes the coins. Most circulating coinage is made at the Philadelphia and Denver Mint facilities.
The Federal Reserve is responsible for the country’s circulating coin inventory and distribution of coins to its depository institutions (banks, credit unions). Federal Reserve Banks buy coins from the Mint at face value.
The Mint and the Federal Reserve work together to get coins into circulation following the process below.
- Federal Reserve submits coin orders to the Mint.
The Federal Reserve comes up with a 12-month rolling forecast to guide the Mint. It also submits monthly coin orders. - Mint determines production numbers.
The Mint uses the forecast and coin orders to set the production numbers for each denomination. It also considers long-term demand by the public and seasonal trends that require more coins in circulation at certain times of the year, such as holidays. - Mint makes the coins.
The Mint makes the new pennies, nickels, dimes, and quarters for circulation. Learn about that process in part two of this series. - Mint transports the coins to the Federal Reserve Banks.
Armored cars and trucks take the coins from the Philadelphia or Denver Mint facilities to the Reserve Banks’ 28 branch offices and more than 100 private sector coin terminals. The coin terminals are operated by armored carrier services contracted by the Federal Reserve. - Federal Reserve Banks distribute to depository institutions.
The Reserve Banks’ depository institutions place orders for coins. The armored carriers transport the coins from the coin terminals to the depository institutions. - The coins enter circulation and cycle between banks, businesses, and people.
The depository institutions place the new coins in circulation by exchanging them with their customers, both businesses and individuals. They also give the coins to other banks that aren’t depository institutions with the Reserve Banks.
The new coins then become part of the circulation cycle.
Coin Circulation Cycle
New coins account for less than 20 percent of the total coins in circulation. The rest are coins made in previous years that continue circulating. The average lifespan of a coin is about 30 years.
Coins circulate between banks, businesses, and people. Banks not only distribute new coins they receive from the Federal Reserve Banks, but also old coins. Banks can return excess coins to Reserve Banks, which re-distribute the coins to other banks and take worn coins out of circulation. Businesses deposit coins in banks and also receive coins. Coins are also exchanged between businesses and people.
When people keep coins to drop in change jars, piggy banks, or collections, they take the coins out of circulation. The coins return to circulation once people spend them or deposit them in banks or at coin exchange kiosks.
How Coins Are Made Series
See more Inside the Mint articles.
FAQs
The United States Mint ships its coins to Federal Reserve Banks, which are responsible for putting coins (and paper money) into circulation and also for withdrawing them from circulation when they are worn out. When a private bank needs coins for its customers, it purchases them from a Federal Reserve Bank.
How coins are made at the U.S. Mint? ›
Coin Making
Round discs called blanks are punched out from the metal sheet. The blanks are heated to make them softer and then washed. They pass through a machine that squeezes them, forcing the sides up to form a rim. The coin press uses the die to stamp the blanks with the coin design.
Are coins made from mint? ›
Mint makes the nation's circulating coins, as well as bullion and numismatic (collector) coins. The Mint's four production facilities in Philadelphia, Denver, San Francisco, and West Point use a variety of machines and processes.
Are coins from U.S. Mint worth anything? ›
Collectors and investors often consider US Mint coins a valuable addition to their portfolios. These pieces hold historical significance, potentially increase in value over time, and offer diversification.
How does new money enter into circulation in the United States? ›
Banks create money by lending excess reserves to consumers and businesses. This, in turn, ultimately adds more to money in circulation as funds are deposited and loaned again. The Fed does not actually print money. This is handled by the Treasury Department's Bureau of Engraving and Printing.
How does the US put money into circulation? ›
Federal Reserve Bank cash offices distribute banknotes to the public through depository institutions, such as commercial banks, credit unions, and savings and loans associations. Federal Reserve Banks are responsible for processing banknotes to ensure that they are genuine and fit for recirculation.
Are pennies going away in 2024? ›
The U.S. Mint has no plans to discontinue the penny, and such a move would require congressional approval.
Why are U.S. Mint coins so expensive? ›
2.7 Demand and Supply
These coins are made from 1 troy ounce of . 999 fine silver and carry a $1 USD face value. During these turbulent times, investors seek safety in precious metals like silver. As demand for precious metals has gone up, so have the premiums.
How much does it cost the U.S. Mint to make a dime? ›
Dimes and quarters are worth more than they cost, but the margins for both have shrunk significantly over the past two years. The cost to make a dime increased from 3.7 cents in 2020 to 5 cents in 2022 — a 34.9% increase.
Is the U.S. Mint privately owned? ›
About the Mint. The United States Mint is the government agency that makes coins!
There are today four United States mints: Philadelphia, Denver, San Francisco, and West Point. The bullion depository at Fort Knox is also part of the Mint system.
What is the rarest U.S. minted coin? ›
1. 1849 Double Eagle Gold Coin. With just one coin currently in existence, the gold 1849 Double Eagle is considered the rarest and most valuable coin in US history.
Are buffalo nickels worth anything? ›
Experts believe that around 10,000 of these unique coins are in existence today, with around 15% of these existing in uncirculated, Mint State grades. However, the majority of Buffalo nickels can be worth anywhere from $0.51 for a 1937 coin in “good” condition to $1,524 for a 1921 S coin in “mint” condition.
Which U.S. coin is rare? ›
20 Most Valuable Rare Coins to Know About
| Year-Date | Coin Type | Value |
|---|
| 1885 | Liberty nickel | $350+ |
| 1937 | 3-legged Buffalo nickel | $450+ |
| 1916-D | Mercury dime | $800+ |
| 1901-S | Barber quarter | $3,500+ |
15 more rowsNov 24, 2023
Ally, the Fed does track money supply in the form of M0, M1, M2, and M3. The Fed tracks these numbers and uses them to assess the needed amount of cash in the system to support the economy. In a simple way the money supply needs to grow as the economy grows, otherwise there is deflation and a lack of liquidity.
Why can't the U.S. Mint just print more money? ›
It wouldn't be historically unprecedented. In fact, it's been done many times in the past. But nothing comes free, and though printing more money would avoid higher taxes, it would also create a problem of its own: inflation. Inflation is a general increase in the prices of goods and services throughout an economy.
How does the U.S. Mint know how much money to print? ›
The U.S. Mint, which produces coins, and the Bureau of Engraving and Printing, which produces paper currency, work together to determine how much cash to print based on several factors, including demand for cash, economic conditions, and the need to replace worn-out or damaged currency.
Who has the power to Mint money? ›
Article I, Section 8, Clause 5: [The Congress shall have Power . . . ] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; . . .
The U.S. Mint produces more than 10 billion circulating coins a year. But it doesn’t distribute circulating coins to the public. The Mint relies on Federal Reserve Banks to put the coins into circulation. Learn about how pennies, nickels, dimes, and quarters enter circulation and reach your hands.
