Will the Swiss Five Centime Coin be Phased Out?

I heard rumours about the 5 centime coin being phased out. Is there any truth in those rumours?

Hi there,

The Swiss Federal Council has so far spoken out in favor of keeping the 5-centime coin in circulation. The 1-centime coin, on the other hand, was taken out of circulation in 2007. The 5-centime coin has been kept in circulation largely due to its cultural value.

However, depending on the price of the metals used to mint the coin, the costs of producing a 5-centime coin often exceed its face value. Arguably, this deficit is balanced by the use value of the coin over its circulation life. Many Swiss coins have been in constant use for several decades.

It is worth noting that the withdrawal of coins from circulation is often tied to inflation. As prices increase, the high cost of goods can make small denominations of money redundant. While some goods are sold for the equivalent of 5 centimes in some other countries, you would be hard pressed to find anything on sale for 5 centimes in Switzerland.

Many merchants use the psychological lure of moderately lower prices to encourage sales. For example, a store may sell merchandise for 4.95 Swiss francs instead of 5 francs.

Just for fun: If you were to save one 5-centime coin every day over a 50 year term and deposit the annual savings (18.25 francs) into a savings account with an interest 0.5% per annum at the end of each year in the term, you would end up with 1033.75 francs in your savings account of which 121.25 francs will be interest earned - as per the moneyland.ch savings calculator.

Best regards from Moneyguru

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