Pure silver minted in the shape of coins (also referred to as rounds) and bars is referred to as silver bullion. Bullion products are a means of investing in precious metals like gold and silver. Silver bullion products are made at both government and private mints, with the former having a legal tender value which is absent in the latter. Those available at private mints carry lower mark ups over the spot price of silver, and sold at lower premiums in comparison to government-minted bullion silver coins. Whether struck from silver at a government or private mint, you should keep purity and weight in mind when you purchase silver bullion online or from your local dealer.
What are the different silver bullion products you can buy?
Silver rounds/coins and bars are the popular bullion products which investors purchase. Here is a closer look at each type:
Silver bullion rounds/coins: Silver rounds made at private mints contain .999 fine silver and are typically available in weights of one troy ounce. They are minted in different designs and sold as commemorative coins as well. Some of these rounds have become collector’s items and command a higher premium; an instance is the Liberty dollar which has good collector’s value. Silver bullion rounds made at private mints have become popular choices of investors over the years. Here are some of the reasons for this
- Silver rounds are very easily available
- They attract lower premiums in comparison to government-backed bullion coins
- There is a direct correlation between their value and current silver price
- As they are small in size, they can be stored and bartered quite easily.
Silver coins made at a government mint are legal tender with 99.99% purity, and come with an excellent finishing. In fact, a government mint also issues proof coins and special edition coins, both of which are much in demand among investors and collectors alike. Some of the popular government-minted silver coins are the American Silver Eagle, China Silver Panda, Canadian Maple Leaf and Austrian Philharmonic, among others. Silver dollars (1921 Morgans, Peace type and pre-1921 Morgans) are collected widely across the world and usually carry higher premiums.
Junk silver coins: Silver bullion investments make reference to 99.9% pure silver. However, you can also buy a bag of junk silver coins as a form of bullion investment despite a purity of 90%. These are pre-1965 minted coins and track silver’s spot price. A bag of junk silver coin containing a little more than 700 ounces of silver can cost you $1000, though the ‘bags’ are also available in different troy ounce weights and prices. Silver junk coins are an inexpensive way to own this precious metal and serve well as a safe haven during difficult economic times.
Silver bullion bars: When you decide to buy silver bullion online, you can consider bars. Like silver rounds, they contain 99.9% pure silver. Silver bullion bars are available in different weights; you can choose anywhere from 1oz to 1000oz bars in accordance with your budget and investment requirements. For highly liquid precious metals investment, 100oz and 10oz bullion bars are the preferred options. The premium on silver bullion bars is lesser in comparison to their coin counterparts. The silver bullion bar you buy will have information about purity, brand and weight on it. Make sure you check these markings when you put down your money.
Buying silver bullion online
Investors are increasingly buying silver bullion products online. From online dealers to the likes of eBay and auction sites, the options are many and varied. However, it is advisable to buy silver bullion from reputed online dealers for assured purity, efficient services and peace of mind.
Cost is another factor when you purchase silver bullion online. Dealer premium apart, factor in costs like shipping fees, sales tax and storage charges. Also inquire about the grading standards that the particular online dealer adheres to. It is also a good idea to verify the authenticity of the online dealer by perusing the dealer’s website carefully, reading customer testimonials, and even speaking to the dealer over the phone.
Check spot price of silver on a daily basis, and try to buy as close to the spot price as you possibly can. This is especially true if you buy silver bullion online as a long-term investment. On the other hand, if are looking at precious metal investments from a more survivalist angle, such as using silver to buy groceries or gas, then you should go for smaller 1/10 oz silver bullion coins. Avoid spending over a 10% mark-up, and decide your threshold in advance.