Throughout recent American history, the metals used by the U.S. Mint to create coins for circulation have increased in value relative to the currency. As a result, at certain points, the Mint changed the metal composition of coins to ensure the government would still make money on production. In 1982, when the amount of copper contained in a cent was valued over $0.01, the Mint replaced copper with zinc. Today, the copper in these pre-1982 cents is worth $0.027 by weight. The metal composition of a nickel is worth $0.062, a smaller premium over the face value. It’s safe to expect the Mint will eventually change the composition of the nickel so the government makes money on each nickel minted.
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These nickels and pre-1982 cents are still in wide circulation.
Collecting — or even hoarding — these coins may seem crazy, but if your parents or grandparents held onto silver dollars, half-dollars, and quarter-dollars after the composition of these items shifted to more affordable alloys, you might have inherited coins now deemed to be valuable. The value is due not only to the value of the metal, but if the coins are in exceptional condition or are rare, they’ll have an additional value to collectors above the value of the metal.
If you have the space, consider holding onto these coins when you find them. There are a few things that could happen when you do:
- The government will change composition on the coins to keep them more affordable, and demand among collectors will increase for the coins with the older composition. If you stay ahead of this curve, it could pay off. Supply will never increase.
- The government will begin to allow melting of copper and nickel. This will decrease supply because many collectors will prefer to melt and cash in their investment. The coins that aren’t melted will increase in value as their rarity increases.
- The government could decide to cease minting cents and nickels altogether, as the value of $0.05 continues to play a smaller role in everyday personal economics. Cents and nickels will be removed from circulation, increasing the value of those that remain among collectors.
It seems that in every possible future situation, it make sense to start holding onto coins whose base metal value exceeds the face value and market value. Holding onto silver coins when the government moved away from using silver in circulating coins seemed unlikely to pay off at the time. With silver at $35 an ounce today rather than $1, and with the best specimens of silver coins potentially having a much higher value to collectors than $35 an ounce, many collectors wish they had maintained a better silver collection in the 1960s.
Coinflation lists the base metal values for coins. Here they are, as of June 2, 2011:
|Description||Denomination||Metal Value||Metal % of Denomination|
|1909-1982 Cent (95% copper)||$0.01||$0.0270840||270.84%|
|1982-2011 Cent (97.5% zinc)||$0.01||$0.0059563||59.56%|
|1971-2011 Half Dollar||$0.50||$0.1155549||23.11%|
|1971-1978 Eisenhower Dollar||$1.00||$0.2311110||23.11%|
|1979-1981, 1999 SBA Dollar||$1.00||$0.0825388||8.25%|
|2000-2011 Sacagawea Dollar||$1.00||$0.0706778||7.06%|
|2007-2011 Presidential Dollar||$1.00||$0.0706778||7.06%|
Any coin with a metal percent of denomination over 100% is worth more as a metal than as a coin. If you have the space, consider holding onto the pre-1982 copper cents, and perhaps nickels, to take advantage of what time will do to their values if silver’s history is any indication.