Should I buy Silver Coins or Silver Bars?

Should I buy Silver Coins or Silver Bars?

When investors opt to buy silver bullion, they are usually faced with various options to choose from. Some might decide to buy silver coins for their high liquidity or silver bars for their lower cost and enormous growth potential. Depending on the type of investor you are, one of these forms of silver investment may seem more befitting to your portfolio.

This article will cover some differences between silver coins and silver bars and other advantages influencing your silver bullion purchase.

First, we start by understanding the dynamics of both Silver Coins and Silver bars.

Silver Coins

A silver coin is a legal tender or currency coin with much of its value coming from its precious metal content and other government guarantees. Typically, not all silver coins are solely valued based on their precious metal content. For instance, Numismatic Coins, their value is highly influenced by collectors by their rarity and unique conditions.

Numismatic Coins Vs. Silver Bullion Coins

Numismatic coins and silver bullion coins can be pretty difficult to distinguish based on their appearance alone; they are both circular in shape with similar weight classes.

However, how they are distinctly valued in the precious metal market is what sets them apart.

Silver Bullion Coins

1 oz 2022 Great Britain Myths and Legends Maid Marian Silver Coin

Silver Bullion coins are valued strictly by their precious metal content. This would mean that the higher their weight class, the more expensive it becomes. To put it into perspective, you would spend $38.60 to purchase a 1 oz 2022 Little John Silver Coin, compared to  $476.33 for a 10 oz 2021 Royal Canadian Mint Magnificent Maple Leaves Silver Coin. 

Numismatic Coins

When collectors evaluate numismatic coins, they usually consider factors such as; age, rarity, and uniqueness of these coins.

In January 2013, the first dollar coin issued by the U.S government (1794 Flowing Hair Silver Dollar) was sold at an auction for around $10 million. This price tag shouldn’t be surprising, given that this coin was one of the earliest dollar coins with a limited mintage of only 2,000 Coins.

You don’t really need to spend as much as $10 million to buy a numismatic coin as an investor. It’s easy to get one for as low as $234.77.

Silver Bars

Silver Bars are rectangular-shaped silver bullion with sizes ranging from 1 kg to 10g. These bars are significantly larger than their silver counterpart but are generally valued lower when compared to them.

Silver Coins Vs. Gold Bars

Beyond appearance alone, silver coins and Bars differ in many ways. At its core, silver coins are considered legal tenders backed by a government mint. This means they are seen and classified as currencies by different global governments. Conversely, silver bars are solely known for their bullion quality as a form of investment and a store of value.

Silver coins have the edge over bars as a legal tender in that they have more recognition in the physical metal market and are easier to sell (high liquidity). This increased liquidity and recognition in the market also mean higher demands for silver coins, which is reflected in a high premium over spot price.

Making the Silver Bullion choice

Your personality as an investor plays a considerable role in deciding whether to buy silver coins or silver bars. For instance, If you search for a smaller bullion option that would fit a tight budget, Silver coins would be an appropriate buy. Likewise, as a larger investor, if you need to invest in a silver option with greater monetary value, you can opt for Silver bars in your portfolio. A middle ground, in this case, would be to buy both silver coins and silver bars for further diversification of your portfolio.

As a rule of thumb, always remember to conduct adequate research on the type of Silver coin or bar you are about to buy. In addition, only use reputable mediums to purchase or sell your silver Bullion.