Certified vs. Raw Coins: What’s the Better Investment?
At a Glance:
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- Certified coins have been authenticated, graded, and slabbed by a reputable grading company.
- Raw coins are sold without certification and are instead traded ungraded.
- Rare coins are usually certified, but common or modern bullion coins are typically traded raw.
- On this page, learn more about the differences between certified and raw coins.
Certified vs. Raw Coins: What’s the Better Investment?
Bullion and rare coins are sold in two main ways: certified or “raw.” Certified coins are coins that have been authenticated by a respected coin grading service, such as PCGS or NGC. Raw coins are coins that have not been professionally graded or authenticated by a reputable grading service.
Many modern bullion coins are purchased and sold raw, since few modern gold or silver bullion coins would benefit enough from being certified to justify the cost of grading. But for older or rarer coins, coin certification can sometimes add considerable value to a coin, among other benefits.
Are certified or raw coins a better investment? Well, it depends both on the coin and your investing preferences. While buying certified coins can protect your investments and make rare coins easier to sell, raw coins tend to be more affordable and can sometimes give you a quick path to profit if you’re willing to buy them raw before paying to get them graded.
On this page, learn more about the differences between certified vs. raw coins.
Comparing Raw and Certified Coins
Coins, particularly rare, certified coins, are commonly sold in certified packages called slabs. A coin slab encapsulates and protects a coin, and most slabs include information about the coin, such as its condition, denomination, errors (if applicable), and details that might impact its value.
Other coins are sold “raw,” which means that they are not stored in a protective slab and have not been graded. Modern coins minted for investors, including American Gold Eagles and Canadian Gold Maples, are rarely sold as certified coins, unless they’re from a limited mintage collection or feature a notable error.
Certified coins often sell at added premiums compared to raw coins, and coins of a certain rarity are almost never sold raw. On the other hand, some coins aren’t worth buying certified. You may see certified standard American Silver Eagles, for example, being sold for $100 or more at your local antique store. These coins are rarely worth much more than their melt value, so buying a certified coin at that price point is unlikely to be worth the added cost.
What is a Certified Coin?
A certified coin is one that has been evaluated, authenticated, and graded by a reputable third-party coin grading company. Coins can also be certified but ungraded, since companies like PCGS and NGC return coins with certain types of damage as “authentic” without attaching a grade.
The majority of certified coins are stored in secure plastic holders called coin slabs. The top part of a coin slab displays the coin’s name, denomination, grade (if applicable), the name of the grading company, and other information that can be used to assess the coin’s condition and value.
Coins can be certified by a range of different grading companies, but not all grading companies are created equal. Some of the most reputable grading companies on the market include:
- Professional Coin Grading Service (PCGS)
- Numismatic Guaranty Company (NGC)
- CAC Coin Grading
- ANACS
What is a Raw Coin?
Raw coins are coins that have not been through the grading and authentication process. Coin dealers generally test and evaluate their raw coins to make sure that counterfeits don’t sneak into the mix, but raw coins have never been officially graded and deemed genuine by an authoritative grading company.
Popular modern coins are often sold raw, since having a coin graded costs money, and the added value of a certified modern bullion coin is seldom worth the cost of grading. In other words, only rare editions, like first releases, early releases, or limited mintage bullion coins, are commonly sold certified.
More About Certified Coins
Rare coin certification can seem like a complicated process, but it underscores much of the global coin-collecting industry. Many of the world’s rarest and most valuable coins are exclusively sold graded, since their market value and exceptional condition mean that potential buyers will want the assurances offered by a genuine grade.
While coin collectors don’t need to become expert coin graders, understanding the basics of how rare coin certification works can help you save money while building your coin collection.
How Rare Coin Certification Works
A rare coin is typically certified by a coin grading company, whose job is to verify the authenticity of a coin and, if possible, assign it a number to represent its condition. Because rare coin values are highly dependent on condition, having a coin professionally graded can increase its value – especially if the coin grades high.
Here’s a brief overview of how the coin grading process works:
- Pay and package your coins, following the instructions provided to you by your grading company.
- Ship your coins using the grading company’s instructions.
- Wait for your coins to be graded. Time estimates vary based on your grading company and that company’s current backlog. Your coins will be graded, double-checked, and encapsulated before you receive an official grade, which typically happens prior to your coin being shipped back.
- Receive your coin in the mail and celebrate!
When (And Where) To Get Coins Certified
Coin grading is not a free service, though. Coin grading companies like PCGS and NGC charge money for their service, and collectors are also responsible for paying shipping fees if they’re not dropping their coins off personally at a special event. As a result, not all coins are worth grading.
Choosing which coins are worth grading is a subjective exercise, but there are a couple of tips that investors can follow.
First, it’s a good idea for collectors to learn the basics of coin grading on their own. If you can estimate the approximate grade of your coin, you can use that information to review how much the coin might be worth. If the cost of grading the coin is less than the difference between its raw value and its potential value with your estimated grade, then that coin may be worth grading.
Second, avoid sending coins in for grading that are unlikely to hold value, even in higher grades. Some coins are only valuable in near-perfect condition. Unless you believe that your coin is so exceptionally uncirculated that it could reasonably score a top grade, common coins usually aren’t worth sending in. When in doubt, feel free to ask for a second opinion at your local coin shop. Most coin dealers will give collectors a quick verbal appraisal for free.
To summarize, the vast majority of coins just are not worth grading. However, if your coin is exceptionally rare or could gain substantial value if it achieves a high grade, it may be worth the cost of grading to send it in.
Are Certified or Raw Coins the Better Investment?
So, should collectors buy coins raw or certified? There’s no single right answer to this question. Instead, the right way to buy coins depends on your collecting preferences, budget, and goals.
Certified coins are usually the right choice if you’re dealing with especially rare coins, if you want to protect your coins against damage, or if you’re looking for coins with a specific grade. Raw coins, on the other hand, are the more affordable option, and they may also offer collectors a method of making money through a strategy called cherry-picking.
Below, we’ll take a look at how certified and raw coins compare.
Resale Value and Authenticity
Raw bullion coins are highly liquid, as investors should have no trouble finding a buyer willing to pay melt value for their raw Silver Eagles, Gold Maples, or other standard bullion coins.
When it comes to rare coins, however, the authentication offered by certification goes a long way in securing resale value. Rare coin collectors like to know what they’re buying, which is why graded coins often sell at a premium compared to raw, uncertified specimens.
In other words, the better way to buy coins depends on your preferences and investing goals. If you’re just buying coins for their precious metals, it may be best to go with raw coins. But if you’re interested in rare coin collecting and trading, paying the added premium for certified coins can pay dividends once you’re ready to sell.
Protecting Your Investment
While it is possible to secure your raw coins by following coin storage best practices, having your rare coins certified is the superior way to protect them against damage. A coin slab protects your coin from debris, improper handling, and other hazards that can eat away at its natural luster and condition.
Coin slabs are also tamper-evident, and modern coin grading companies make it easy to quickly identify and authenticate a coin using the serial number or barcode on its slab. This extra layer of authentication can help you – and your buyers – be more confident in your collectable coins.
Cost of Collecting Certified Coins
The biggest downside to buying certified coins is cost. Coin certification costs money, especially if you work with a reputable grading company like PCGS or NGC. And when someone sells a coin they’ve paid to have graded, they’re likely to mark it up at a premium compared to raw specimens.
For type set completers or casual collectors, the added cost of buying certified coins may not be worth paying. That being said, rare coin collectors can benefit from buying coins that have been authenticated and certified, even despite the cost of doing so.
“Upgrading” Raw Coins – A Brief Guide
Some investors buy raw coins with the intention of paying to get them professionally graded. This gambit can sometimes pay off, but your mileage may vary based on the market, as well as which grade the coin ultimately receives.
“Upgrading” a coin refers to the process of breaking a coin out of its slab and submitting it to receive another grade from a grading company. The goal is to purchase a coin at a lower grade (and price), have it graded at a higher condition, and then profit from the value difference between the two grades.
We do not recommend this strategy for most collectors. Attempting to break a coin out of its slab can damage your coin, and even a small scratch on a coin’s surface can negatively impact its value. Additionally, there’s never any guarantee that your coin will grade higher the second time around. In fact, many coins may grade lower when submitted for a second time!
That being said, it’s worth noting that some collectors like to buy certified coins and submit them for re-grading. This can be a profitable process, and it’s always exciting to see a coin get the coveted mint-state designation.
Final Thoughts: Certified vs. Raw Coins
Coins are either sold certified or raw. A raw coin is sold with no certification, while a certified coin has been graded and authenticated by a reputable grading company. Certified coins are typically traded in slabs, which are secure plastic capsules that display each coin’s key information, condition, and other notable features.
Which type of coin should you buy? At the end of the day, it’s up to you! Certified coins are a good choice for collectors who enjoy rare coins and want to buy the highest-grade coins possible, and coin certification adds a new layer of security to your investment. Raw coins, on the other hand, are more affordable, and they’re usually the better choice for investors stacking common coins valued primarily for their precious metal content.
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.