How to Buy Silver Bullion Coins
Posted on March 21, 2022
What are silver bullion coins?
“Bullion” is a term often only associated with bars. But bullion refers to any precious metals product in a physical form that has been refined to a specific purity for the purpose of storing value.
Unlike numismatic coins, silver bullion coins ideally carry low premiums over spot price. The primary reason for owning a bullion coin is to store value, not to hope for appreciation in aftermarket collectible value. They are considered “fungible,” meaning any single one is indistinguishable from any other of the same condition and mintage. In short, silver bullion coins are a way to invest in physical silver as a commodity rather than as a collectible (although there’s no reason you can’t buy silver bullion coins from a variety of mints and years and enjoy their variety of designs).
Of course, when it comes to bullion, silver is the most accessible because of its relatively low price per ounce. At the time of writing, It costs roughly 1/75th as much as gold. This makes it far more affordable purchase since the price threshold is lower. Many gold bugs have a portion of their precious metals stockpile devoted to silver. When it comes to adding or selling off a portion of your precious metals portfolio or using it to barter, silver is the easiest to “make change.”
The reverse is also true – for those of us seeking to invest a significant portion of our net worth in physical silver, the large number of ounces required can present transportation and storage issues. At the time of writing, 1,400 1 oz silver eagle coins or just 25 gold Krugerrands represent the same amount of value.
Even so, silver bullion coins are the top choice for most people just getting started with precious metals.
Silver bullion coins vs. bars vs. rounds
After deciding to purchase silver bullion, your next question will be whether to purchase coins, rounds, or bars.
Bars often offer the lowest premiums over spot, but they are not nearly as widely traded as coins. They’re created by a larger number of refiners, without reliable standards of size or weight, and in a wide variety of designs. They’re simply less recognizable than coins, and therefore may not be ideal for the beginner.
Rounds share the same shape and similar dimensions to coins but aren’t considered currency and are made by private mints. As such, they have no face value and for the most part, are less readily recognizable. Rounds can be elaborately designed works of art, or they may be no more than a refiner’s logo stamped on a disc of silver.
Coins, on the other hand, are made by government mints and carry a face value. This face value doesn’t mean the silver coin is intended for buying a burger at a drive-through, though. The face value is an indication that the coins are backed and guaranteed by the issuing government. Silver bullion coins tend to have recognizable and often consistent designs, be produced in large numbers, and have the track record of the issuing mint backing up their purity and quality. Plus, they are widely available and have higher liquidity (in other words, they’re usually easier to buy and sell than silver bars or rounds).
Silver bullion coin options
Popular examples include:
The most common size for silver bullion coins (including all of the above) is 1 oz and for a relatively small amount of cash, you can begin building your physical silver bullion investment. (Especially compared with gold – right now, you can buy two American silver eagles for less than a single gram of gold!)
While 1 oz silver coins are the most common, they are larger and smaller size coins. For example, the U.S. Mint’s America the Beautiful series comes in 5 oz version coins. And the British Royal Mint’s Queen’s Beasts series offers 2 oz silver bullion coins.
How to buy silver bullion coins
You can purchase silver coins from many retailers. But, each offers various pros and cons. And depending on your purchasing preferences, one may be better suited to you then another.
The three main places you can buy silver bullion coins are coin shops, auctions, or online dealers.
Coin shops
The most obvious place to pick up a silver bullion coin is at your local coin shop. You can find your closest one with PNG’s handy dealer search.
There’s an obvious downside, however. The silver bullion coin options that you can buy are limited to whatever the shop has in stock. While they can likely special order a silver coin for you, you will likely end up paying more than if you just bought it online yourself.
In general, coin shops have higher markups than online retailers. That is because they have more overhead costs. They have to pay rent, electricity, water, sewage, property taxes, insurance, employee salaries, and much more. Many of these fees are minimized or reduced entirely with online bullion dealers that just have a plain, simple warehouse to store the bullion before shipping it to you.
The higher costs aside don’t mean brick and mortar coin shops are not worth a trip. They can help identify and appraise coins you already own. Plus, they can come in handy if you need to sell your bullion quickly.
Coin auctions
Another option is purchasing silver bullion coins at an auction. This includes both in-person and online auction sites like eBay. The upside with auctions is that you can sometimes score a deal if you play your cards right and get lucky. That’s where the positives end, however.
This route is only recommended for precious metals experts. Even then, you still run the risk of receiving a different coin than advertised, a counterfeit, or even a box of rocks in the mail. If you do choose to go this route, be sure to double-check the coin’s specifications against the original mint’s information. Make sure the seller has some sort of guarantee!
Online bullion dealers
The easiest and best way to get both reliability and a large selection of silver coins is through an online bullion dealer. They usually have a much wider range of bullion products. They also often offer more sizes, packaging options, and discounted shipping.
BullionMax offers silver coins from mints all around the world. You can order in any quantity – from just one to thousands. And every order of more than $199 comes with free shipping.
Of course, the most important aspect to note when it comes to buying from online dealers is their reputation. Be sure to check Better Business Bureau ratings, read reviews, and only purchase what you are comfortable with at first. You can find additional BullionMax reviews here.
Additional considerations
There are a few more things to consider when searching for, selecting, and purchasing silver bullion coins. Though, this is true for any bullion purchase.
- Price – Obviously, the most important part of buying bullion, unless you are just looking to complete a collection for completion’s sake, is price. Specifically, consider the coin’s premium over the spot price. Remember, silver bullion’s intrinsic value is its weight of silver, and you can’t expect any silver bullion coin to be worth more than that. Therefore, the less you pay over the spot price per ounce, the better off you’ll be. All silver bullion purchases will include a premium over spot to account for manufacturing costs, transportation, storage, and so on. You can find silver’s spot price here.
- Shipping – When buying silver bullion coins online, make sure you consider shipping costs. (Especially on auction sites like eBay, where sellers sometimes charge outrageous shipping costs to increase their profits.) BullionMax includes free shipping on orders over $199. Also, consider which kind of packaging best suits your needs. A small quantity of coins will come in plastic sleeves or coins tubes. Larger quantities of silver coins are often shipped as Monster Boxes, brand new and still sealed from the issuing mint.
- Storage and Insurance – Silver takes up far more space than gold for the same dollar value. So consider the available space and size of your home safe. If you are planning on storing your silver in a home safe, you’ll want to consider insurance too. Most home insurance policies provide up to $2,500 of coverage for bullion but check your policy documents to see your specific terms. You can increase your coverage. But, at some point, your insurance cost will be near or exceed the costs of storing your silver bullion coins at a precious metals depository.
How to Choose?
Once you’ve finally decided to buy silver bullion coins, the decision of which coins to buy and how many can still be challenging. So, here’s a short checklist with just five steps to get you started right:
- Decide which coin fits your needs – If you have a specific coin or mint in mind, then you should start there. For example, you might purchase silver American eagles because you are a patriotic U.S. citizen. Or you might decide on silver Britannia coins because you studied abroad in the UK back in college. There’s no wrong answer and you don’t have to stick with one type of coin or mint.
- Shop for price and availability – After deciding on the right silver coins, shop around. You can check your local shops or search for a local dealer. But online dealers, like BullionMax, have low overhead costs and get bulk pricing directly from the mints. We pass these savings on to you, so you always get the best price.
- Make sure to research the seller’s reliability – This goes for all potential sellers. Read ShopperApproved reviews, Better Business Bureau ratings, and any other reviews you can get your hands (and eyes) on.
- Decide on volume and shipping options – Consider shipping prices, how much you can comfortably afford and store, and how you want it packaged. Remember to factor in shipping costs. For example, BullionMax has free shipping for orders over $199.
- Store and insure your new coin(s) – Physical silver bullion is only valuable if you keep it safe and in good condition. Store it in a cool dry area and make sure your insurance policy covers it. If you have a substantial investment in physical silver bullion coins, consider storage at a depository.
