It Only Costs 5 Cents To Make A Dime, But It's More Than Double That For A Nickel

We tend to take it for granted that a coin is worth its face value and, in many respects it is. But have you ever thought about what it costs to actually make those coins? How they are made, what goes into making them, and the actual value of those materials are all things we tend to overlook, but in reality, the face value of a coin is simply the amount assigned to it, not the actual value of the materials those coins are made of.

Some of the most valuable coins are rare or have mistakes making them worth a potential fortune. But average, everyday coins are made for the general circulation to, as they say, make the world go round. Dimes, for example, only cost about 5 cents to make (5.76 cents in 2024, to be exact), according to the U.S. Mint's 2024 report, but oddly enough, nickels cost significantly more. With a manufacturing cost of 13.78 cents per nickel, the price is more than double than that of a dime, making us question the face value of every coin in our pockets.

The cost of making these coins varies from year to year, which would make it nearly impossible to keep changing the face value of coins. Therefore, for consistency, it makes sense that the face value should remain consistent since changing the value of a coin denomination each time the cost of manufacturing increases would be a logistical nightmare and create mass confusion. While maintaining the same face value of a coin is quite understandable, what doesn't quite jive is the fact that a nickel, with half the face value of a dime, costs more than double to make, and making critics of our monetary system question the logic and process behind it.

The cost of manufacturing a coin is based on a couple of factors, including the market value of metals which fluctuates with time as well as the labor cost of the actual minting process. The difference between the cost of the coin and the face value is known as 'seigniorage' and is counted as revenue (or loss) for the government responsible for manufacturing the coins. Coins themselves are made of a variety of metals, most of them using what the U.S. Mint describes as a 'clad coin' technique, sandwiching a core metal in between two layers of a different metal. Quarters, for example, are made with a center layer of copper in between two layers of a copper/nickel mixture. This is quite different from a penny, which has a center layer of zinc sandwiched in between to layers of copper. The nickel, on the other hand, isn't a clad coin at all, which explains why its size is quite different from all other coins. Rather than having a metal core sandwiched between two outside metal layers, nickels are simply a mixture of metals, nickel and copper, formed into the shape of the coin.

At one time, the materials used to make coins were more reflective of their actual value, but along the way that changed, like with the penny, which started being made from a 97.5 % zinc core with a 2.5% copper plating in 1982 when the price of copper experienced a significant increase. Despite this change in materials, the price of producing a penny has continued to rise, as has the price of producing other coins, regardless of the fact that the cost of producing a nickel definitely outweighs the cost of producing a dime.

President Trump recently instructed the U.S. Treasury Department to stop minting new pennies, citing rising costs and the U.S. Mint's reported loss of $3.2 billion in 2024 due to the manufacturing of pennies, but in reality, the cost of each coin denomination has been steadily rising — for example, a single nickel cost 10.41 cents to produce in 2022, 11.45 cents in 2023, and 13,78 cents in 2024. But eliminating certain coins may not be as simple as discontinuing their production.

Coins are a necessary part of our economy. Without them, we couldn't make change for certain purchases and entire pricing systems would have to be adjusted to get rid of cents, or at least certain denominations of coins. But although eliminating coins isn't exactly easy, it has been done in the past. Previously, we used denominations like the half penny, a two-cent coin, a three-cent coin, a twenty-cent coin, and even gold coins worth $2.50, $5, $10, and $20. But while some countries continue to use coins that have been around for ages, those were all phased out decades ago due and have never been reintroduced. In the past, however, when these coins were discontinued, there were still enough options available to make accurate change for any amount.

Ultimately, there are many factors that contribute to the cost of minting them. Whether that cost is at or near face value, double the face value, or more than coins with significantly higher face values, as is the case with the nickel costing more to produce than the dime, they are a hotly debated topic when it comes to the country's budget.