Did you know it only costs about 5 cents to produce a U.S. dime, but making a nickel costs more than 10 cents? While it sounds backward, this surprising fact highlights a growing issue in U.S. coin production. The cost of materials and manufacturing for coins has been steadily rising, making certain denominations more expensive to produce than their actual face value.
The nickel, despite being worth just 5 cents, now costs more than double that amount to mint—putting pressure on the U.S. Mint and taxpayers. Meanwhile, the smaller and higher-valued dime remains more economical to produce. This cost imbalance is due to factors like metal prices, weight, and composition.
In this blog, we’ll explore why nickels are so expensive to make, how dimes remain cost-efficient, and what possible changes could be coming in the future of U.S. currency. Let’s dive into the real cost of our coins.
The Cost of Coin Production in the United States
Many people assume that coins always cost less to make than their face value, but that’s not always true—especially for smaller denominations. In the United States, the cost of minting coins is carefully tracked by the U.S. Mint, which is responsible for producing coinage.
Surprisingly, while it only costs about 5 cents to produce a dime, the cost to make a nickel is significantly higher—more than double its face value in recent years. This is due to a mix of rising metal prices, production expenses, and inflation. The cost to produce a nickel has been consistently above 10 cents since at least 2021, making each one essentially a net loss for the government every time it’s made.
Meanwhile, despite being larger and more valuable, the dime remains relatively inexpensive to produce. This odd discrepancy has drawn attention from economists and policymakers alike, as the government continues to spend more to make coins that are worth less.
Why Nickels Are So Expensive to Make
The high production cost of the nickel is mainly due to its composition. A nickel is made up of 75% copper and 25% nickel—two metals that have both seen price increases over the years. Even though a nickel weighs 5 grams, its raw material cost is higher than one might expect due to global demand for these metals in other industries like electronics, automotive, and construction.
In comparison, a dime weighs only 2.268 grams and contains a similar alloy but in smaller quantity. Additionally, the fixed costs of minting such as labor, transportation, and equipment maintenance add to the overall expense. Because nickels use more metal than dimes, they incur higher material costs, leading to an average production cost of about 10.4 cents per nickel in recent years, while a dime’s production cost remains around 5 cents. These numbers highlight the inefficiency of continuing to produce nickels in their current form.
Possible Solutions and Ongoing Discussions
To address the rising costs, the U.S. Mint and government officials have been exploring ways to reduce coin production expenses. One proposed solution is to change the metal composition of the nickel to a cheaper alloy, such as plated steel or an aluminum-based composite.
However, changing the composition of coins isn’t simple—it requires legislation, public testing, and updates to vending machines and banking systems to ensure the new coins are compatible. Some policymakers have even suggested eliminating the nickel altogether, as Canada did in 2013 with its penny.
While eliminating coins can save money, it may also cause problems for cash-based transactions, particularly for older adults and low-income individuals. The debate continues, but with the U.S. Mint losing millions annually just from producing nickels, it’s clear that a long-term solution is necessary. Until then, every nickel made costs taxpayers more than it’s worth.
Bottom Line
The cost of coin production reveals surprising truths about U.S. currency. While dimes only cost around 5 cents to mint, nickels cost over 10 cents—making them inefficient and costly for the government. This is mainly due to the nickel’s heavier weight and higher metal content.
With millions of nickels produced yearly, this loss adds up quickly. As discussions about changing coin materials or even phasing out certain denominations continue, it’s clear that the future of small change may soon look very different. For now, each nickel made costs more than it’s worth—literally.
FAQs
Why does a nickel cost more to make than a dime?
Because nickels are made with more metal and weigh more, which raises their production cost above their face value.
How much does it cost to make a nickel?
As of recent data, it costs about 10.4 cents to make one nickel.
What is a dime made of?
A dime is composed of 91.67% copper and 8.33% nickel, but it weighs less than a nickel, making it cheaper to produce.
Could the U.S. stop making nickels?
Yes, it’s possible. The government is exploring alternatives like changing materials or discontinuing low-value coins to save money.
