Buying physical silver with full ownership is the best way to invest in this precious metal. You can do this either by buying silver coins or silver bars.
Why Should You Buy Silver Coins?
Silver coins have a long history, as this metal has been used for thousands of years to mint coins. When you combine this with the strength of the metal itself, and on the value we have attached to it over the millennia, then you have something that offers a sound and stable investment opportunity. Also, there are many rare coins out there that that are worth considerably more than their precious metal content, with some silver coins fetching millions of dollars in the past.
One of the best reasons to own silver coins is they have a strong liquidity when compared to silver bars. Silver coins are also available in smaller amounts and are therefore easier to sell when the time comes. After all, if the price of silver is high then it will be very difficult to sell a 1 Kilo bar of it, but selling 35 separate ounces shouldn’t be too hard.
How to Choose Silver Coins?
You should only buy coins that have been minted in “investment grade” silver. All European countries need to make an annual list of the coins to be considered in that category for the next year.
It should be noted that, contrary to gold coins, de-monetized silver coins are only bought back on the weight of their silver content. A continuous variation on the London market determines the intrinsic value of all silver coins, which means there is no heavy premium for good quality coins.
This is why you should only focus on the amount of pure silver in each coin. You also have to make sure that you are buying high quality coins, because when it comes to selling them, buyers will not compromise on quality.
Which Coins Should you Buy?
In the United States, some of the most popular coins are the ones struck by the US Mint. These include the Silver Eagles, which are priced as close to spot as you will find. This is a great coin to invest in if you’re looking for bullion coins, something priced for its base metal content and something that does not have a premium. Stackers in the United States also buy a lot of Canadian Maple Leaf coins, as these have a very good reputation. We would advise against these though, because while the gold Maple Leafs can’t be beat for fine metal content and total bullion value, the silver coins are treated with a substance that can cause “milk spotting” over time, even on coins that have never been exposed to air.
In the UK, buyers also vary their choices, and most mints are popular. The Royal Mint, which is the official mint of the United Kingdom, produces the Silver Britannia series, which are great bullion coins. However, UK buyers need to pay a 20% VAT on all silver purchases (there is no such tax in the US) so many prefer instead to buy their bullion from countries like Switzerland. In Germany, people tend to focus more on the Austrian Mint and their Philharmonic Coins.
Coins created by the Perth Mint are also a great investment, especially if you buy at the right time. The coins in their Lunar Series are some of the only that begin with a base-rate bullion price, and then increase to a premium price after a couple of years. As an example, if you bought Lunar coins from 2009 in the year they were made, you would have paid very close to spot, but now those coins could easily sell for 5x spot.
To obtain information on the fiscal laws regarding silver coins, please consult our Silver Taxation page.