Silver bars vs. coins: Which is the better choice for investors? The world of precious metals investments can be volatile. Still, there’s no denying that gold and silver are ideal choices for diversifying your investment portfolio and growing your wealth over the long term.
Historically, gold gets all the glory, but silver coins or bars offer an opportunity for savvy investors to make a tidy profit. They’re also suitable for funding a precious metals IRA.
At Oxford Gold Group, we provide a safe, easy, and private way for people to invest in gold, silver, platinum, and palladium. Our goal is to ensure that our customers have all the information they need to make the best decision for their financial future.
In this post, we will discuss silver bars vs. coins, including fundamental differences, benefits of investing, storage options, and more. We’ll also tell you how to invest in precious metals.
For investors, silver coins and silver bars both offer unique advantages. Silver coins have greater divisibility than silver bars, making them easier to buy and sell. Conversely, silver bars have lower production costs, giving investors more bang for their buck and a better chance of making significant monetary gains. Consider your long-term investment goals before purchasing silver to determine whether coins or bars will better suit your needs.
The most obvious difference between silver coins and bars is their physical shape and appearance. However, bars and coins differ by a few factors, including:
Numismatic silver coins are rare, old, and have historical value. Unlike silver bullion coins, numismatic coins have worth beyond their melt-down value. In addition, numismatic coins can have a higher premium than bullion, depending on their condition, rarity, and origin.
Conversely, the value of silver bullion coins remains consistent and usually doesn’t rise much higher than the current spot price. Thus, people primarily purchase bullion as a direct investment.
Silver coins have real-life monetary value as legal tender, whereas bars do not. However, the face value of a silver coin is often far lower than the value of its silver content. For example, American Silver Eagles contain one ounce of silver, which at the time of publication is worth $19.74. However, the legal tender value of these coins is only one dollar.
Silver coins (both numismatic and bullion coins) have varying designs. For example, Peace Silver Dollars and British Sovereigns are popular numismatic coins featuring unique engraved images. However, silver bars don’t have the same variety in appearance as silver coins.
A silver coin typically has an average weight of one ounce. In contrast, government mints (and private mints) produce silver bullion bars ranging from one ounce to 100 ounces. However, some mints manufacture “industrial-sized” large bars weighing as much as 1000 troy ounces.
Historically, most U.S. silver coins have a silver purity of about 90%. However, since 1986 and the American Eagle bullion coin program, the U.S. mint has been striking silver coins that are 99.99% pure. Silver bullion bars also have a precious metal content of 99.99% purity.
Silver bullion rounds are oval-shaped pieces that resemble coins but are not valid as legal tender. Most silver rounds have a value at or slightly below the current spot price of silver. Also, silver rounds come from private production, whereas coins must come from government mints.
So, what are the advantages of buying silver bars or coins as an investment? Let’s break it down.
Silver coins have a quality guarantee from the issuing government and are legal tender. They also contain a denomination signifying their face value. For those reasons, silver coins make a relatively safe investment. Also, many people purchase silver coins because they’re highly liquid assets. For example, selling your silver to reputable dealers or a private buyer at coin shows is easy. Plus, numismatic collectible coins can be worth much more than the spot value of silver.
Silver bullion coins are also much smaller than bars, making them easier to transport and store. Also, they’re easily recognizable – most people can quickly identify a silver coin from the U.S. Mint, Royal Canadian Mint, Perth Mint, etc.
The primary benefit of investing in silver bars is their price: most are less expensive than silver coins. However, their value depends on the bullion spot price, which fluctuates with the market. Silver bars are also better than coins for people making significant investments that total thousands of dollars. Plus, you can use silver bars to fund a precious metals IRA. While some popular silver bullion coins are also eligible, numismatic coins are not.
So, why is a silver bar cheaper than a silver coin? While some rare vintage silver bars have a higher numismatic face value than their plain bullion cousins, most standard bars cost less than coins because they are easier to produce.
Another factor that drives up the price of silver coins is the cost of their design. Most coins have detailed or intricate designs, whereas bars lack those characteristics.
Plus, some silver coins can have a numismatic value of hundreds or thousands more than their actual metal content. For example, two popular choices for collectors are Silver Eagles and Gold Eagles. At a recent auction, a 1999 Silver Eagle coin sold for $13,000, which far exceeds its legal tender or face value.
So, you’re ready to buy silver coins or bars. However, before you invest, you’ll need to find a safe place to store your silver. The amount of silver you purchase will also affect your storage options. Coins are much smaller than bars and, therefore, are easier to store.
Storage options also depend on the type of investment. For example, you can store a direct investment in silver at home, in a safe deposit box, or at a depository. However, if you’re purchasing silver to fund an IRA, the IRS requires you to store your investment in a secure third-party depository like Brinks.
It might seem tempting to store your silver at home. Who doesn’t want to have 24/7 access and reassurance that their investment is safe? However, home storage is risky and leaves your investment vulnerable to environmental conditions and theft. In addition, improper storage or handling can cause imperfections or damage, which lowers the value (particularly for collectible coins).
Third-party depositories are the safest choice, as they’re climate controlled and have high-tech security and surveillance systems. Some even have real-time cameras so you can view your silver any time you log online!
At the Oxford Gold Group, we make investing in precious metals fast, easy, and safe. Our services include standard investments and precious metal IRAs for gold, silver, platinum, and palladium, which you can easily fund via rollover or direct transfer.
We have a team of investment experts ready to take your call and answer any questions you may have about precious metal investing. Be sure to check out our Learning Center, which has blog posts, news articles, and free guides to help you learn more about investing in silver coins and bars.
So, regarding silver bars vs. coins, which makes the better investment? Ultimately, the choice is yours. While silver coins are much easier to store and have high liquidity, silver bars are cheaper and lack the numismatic value that drives up the price of rare coins.
Before you take out your wallet, weigh your options carefully and consider your long-term investment goals to help you make the best decision for your finances. If you’re ready to invest or want to learn more, call us at the Oxford Gold Group at (833) 600-GOLD to speak with one of our financial experts.
INSIDE THIS INVESTMENT GUIDE YOU WILL LEARN:
• How Gold & Silver can protect your savings & retirement accounts
• Types of Gold & Silver products available for Home Delivery
• How a Gold & Silver IRA can protect your Retirement account