Is Junk Silver a Good Investment?

Posted - June 7, 2023
Is Junk Silver a Good Investment

Junk silver is a popular investment tool for silver stackers. Generally, we consider junk silver to be any silver coin with 90% purity that does not have collectible value. In other words, people buy and sell junk silver exclusively to take advantage of their high silver content. 

In the right hands, junk silver can be a fantastic way to invest in silver bullion. Buying bulk junk silver can help stackers build their portfolio without breaking the bank on premium fees. Even when compared to the low-premium options of silver rounds or bars, junk silver is an extremely cheap way to invest in silver. Is junk silver a good investment? We’ll give you the ins and outs in today’s Bullion Academy guide on the value of junk silver.

Constitutional Silver and Investment

Junk silver is often called “constitutional silver.” Investors like to refer to junk silver as constitutional silver because the value of these coins is guaranteed by the United States federal government. When the U.S. Congress established that the U.S. Mint must cut and distribute silver coins to the general public, it also backed the denominational value of the coin. To understand if junk silver is a good investment, you should develop a solid grasp of the different types of constitutional silver. If you’re wondering, “is junk silver a good investment for me,” developing a better understanding of constitutional silver can help. 

Other countries also have “constitutional” coins, although not all silver products from other government mints are made using 90% pure silver. Luckily, the junk silver coins we refer to as constitutional silver are minted with a .90 fine silver bullion. This, along with the backing of the United States government, helps to give them additional investment potential. 

Investment Potential

Some investors buy exclusively junk silver because of its investment potential and the relatively low entry cost. Junk silver is a unique silver product that comes with its own risks and benefits. We’ll walk you through just a few of the main advantages of buying (and selling) 90% junk silver. Is junk silver a good investment? The short answer is yes; junk silver can help investors build their stock of silver at a low cost, and 90 junk silver offers tremendous upsides for potential silver stackers. 

Intrinsic Value of Silver Content

The biggest benefit of investing in junk silver is its silver content. Regardless of what the final product is, silver holds intrinsic value. Because junk silver often has little or no collector value, it holds intrinsic value exclusively because of its silver content. Regardless of market trends for collectible coins, the silver inside of a junk coin will always be valuable. 

Potential Numismatic and Collector Value

Certain junk silver coins can have collectible value. However, this is not always the case. Can junk silver coins have collector value? More importantly, is junk silver actually a good investment? Yes – some investors have found coins in their junk silver shipments worth considerably more than their silver content. Coins with misprints or errors can be extremely valuable, and collectors often pay a high premium for certain rare junk silver coins sporting uncommon mint marks. 

Comparison with Other Silver Investments

Junk silver is a fundamentally different way to invest in silver than silver coins or bars. Most junk silver coins have no collectable value and are sold with little premium over spot. Silver coins and bars hold value as collectables and might be easier to liquidate to other collectors. On the other hand, junk silver coins are easy to store, simple to assess, and contain intrinsic monetary value because of their silver content

Advantages of Junk Silver

Junk silver comes with three main benefits. The affordability and accessibility, divisibility and versatility, and potential for barter and trade are typically the traits that draw investors to junk silver coins. 

Affordability and Accessibility 

Because of the lower premium over spot, junk silver coins are a great way to invest in high quantities of silver without spending too much money. Junk silver is also extremely common; nearly every major mint and distributor sells junk silver coins, and some banks will sell bags of junk silver coins as well!

We’ve spoken enough about investors with high capitol. Is junk silver a good investment for new collectors with only a little investment cash? because junk silver is so common and affordable, it’s easy for new investors to build an initial portfolio of silver using this type of product. 

Divisibility and Versatility 

When you have a bag of junk silver, you know exactly how much silver is in each coin (90%). This makes junk silver highly divisible. Instead of having to part with one troy ounce of silver at once when you sell a silver Britannia, some investors prefer to sell their silver in smaller, manageable chunks. Junk silver is perfect for this purpose

Junk silver remains one of the most reliable silver investment options because of its versatility. Junk silver can be used as a currency, traded for other products, or even sold to fund higher-end silver and gold investments. 

Potential for Barter and Trade

Is junk silver a good investment for reasons outside of its silver content? 90% silver junk coins are legal tender. While you wouldn’t use your junk silver to buy a drink at the gas station, these coins can be used for legal trade. Some investors bundle their junk silver together and trade it for valuable items with other traders. It’s also worth noting that trading different types of junk silver coins can help new traders make some quick profit. After all, some silver junk coins are worth more than others. 

Considerations and Risks

Like with any investment, there are risks to investing in junk silver. Some investors complain that variations in silver content, issues with authenticity verification, and potential premiums and fees serve as genuine disadvantages to investing primarily in junk silver coins. 

Variations in Silver Content

While most junk silver coins are standardized at 90% silver content, this isn’t always the case. Some junk silver coin dealers might include coins with less than 90% silver. Is junk silver a good investment because of its high silver content? Sometimes. Other constitutional silver products contain only 40% silver, diminishing their investment value. This can make it harder for an investor to get a genuine estimate of how much pure silver they possess. After all, the main advantage of junk silver is its silver content, and issues with measuring silver content can make it harder to quantify your investment. 

Authenticity Verification 

Very few junk silver coins come with statements of authenticity. Because junk silver is so cheap and isn’t valuable for collectors’ purposes, most dealers don’t bother to authenticate the legitimacy of their junk silver coins. This can make it more difficult to ensure that you’re getting genuine silver. To mitigate this risk, investors might consider spending a bit of cash to purchase silver testing kits. 

Potential Premiums and Fees

One of the benefits that draws investors to junk silver is the relatively low premium over spot they pay to get pure silver content. While junk silver is generally much cheaper than silver coins, rounds, or bars, some dealers might still charge a substantial premium over spot for their 90% silver junk coins. Certain junk silver dealers mark their junk products up because of the labor involved in gathering and packaging a large number of junk silver coins for shipment. But back to the core question: is junk silver a good investment, despite its high premiums? 

Investors can cut down on premium fees by shopping around and carefully evaluating silver spot prices to make sure they’re getting the best deal possible. 

Liquidity and Market Demand 

Junk silver coins offer a high degree of liquidity, and silver junk coins are always in demand among investors and silver stackers. When evaluating junk silver as an investment, these are important considerations. “Is junk silver a good investment” is easy to answer for investors with a lot of money to spare, but new investors with limited liquid capital may have a hard time figuring out whether or not junk silver is right for you. Every investor wants to be able to reliably and quickly exchange their silver for cash when the time is right, and junk silver coins make this process pain-free. 

Marketability and Ease of Selling 

Because junk silver coins are valued almost exclusively for their silver content, it doesn’t take a marketing guru to find a buyer for a bag of junk silver. Simply listing any quantity of junk silver online is usually sufficient for sellers to find a buyer for their junk silver coins. In other words, the silver in your junk coins does the talking for you. This makes it far easier for silver stackers to market, liquidate, and profit from their silver investment when they choose to. 

Recognizability and Buyer Acceptance

Most junk silver coins come from a specific period in American history. This means that the limited number of coins available are highly recognizable to potential buyers. Every silver stacker should know which coins contain 90% silver – there’s little guesswork involved when it comes to junk silver circulation coins. 

Buyers are likely to accept most junk silver coins as legitimate without much need for reassurance. Junk silver has been circulated extensively, and a genuine coin is not difficult to find. When it’s time to sell your junk silver, finding a buyer who recognizes your 90% silver coin will be no problem. 

Market Demand and Trends

Market demand for junk silver waxes and wanes. However, it’s relatively easy to predict buyer demand for junk silver coins because of their consistent silver content and lack of collector value. The Silver Britannia might become more and less popular from year to year, but the value of junk silver is solely dependent on the market spot-price of silver. Is junk silver a good investment compared to bullion silver coins? Sometimes this might be the case, depending on your investment objectives. 

However, it’s important to remember that silver’s value can go down as well as up. During times when silver as a precious metal is undervalued, your junk silver investment’s value will decline as well. 

Storage and Security 

Storing junk silver coins safely and securely is easier than storing valuable collectable products, such as silver bullion coins or silver bars. Junk silver is already circulated, so investors don’t really have to worry about losing the value of their investment by scuffing a coin accidentally. 

Safe Storage Options

To store junk silver safely, it’s recommended that investors place their coins in a cool, dry place. It’s hard to damage silver coins beyond their initial value, since environmental damage doesn’t negate the content of silver contained within the junk coin. Is junk silver a good investment when it isn’t properly stored? Not really.  However, storing your coins outside of hot or wet conditions can avoid nasty damage or rust from developing on the non-silver outer-layer of the coins. 

Insurance and Security Measures

As with all bullion investments, it’s important to back your silver up with some sort of insurance plan. Because most homeowners insurance policies place a miniscule limit on their coverage of bullion products, it might be wise to invest in an additional layer of protection with your insurance company. “Is junk silver a good investment” is an important question for new investors, but the answer doesn’t matter if you don’t take steps to secure your silver bullion. This is less of a concern for small investors, but people who plan to stack thousands of dollars worth of junk silver coins should have a plan to avoid losing their investment in case of disaster. 

Long-Term Storage Considerations

Investors who put quite a bit of money into their junk silver collection should consider storing their silver bullion at a secure storage facility. Many mints offer this service, and large bullion distributors will sometimes allow investors to keep gold in their company vaults. This added layer of protection ensures that investors have no real risk of losing their investment to theft, natural disaster, or accident. 90 Percent Silver Coins | Pre-1965 Silver Coins - Penny Pincher Coins

Economic Factors and Market Dynamics

Junk silver coin prices are inherently linked to the spot price of silver. Spot price determines the value that silver is trading for on the current market. By following trends in the spot price of silver, you can make sure you’re getting the best deal when buying silver – and an even better deal when selling it! 

Relationship with Silver Spot Prices

When the spot price of silver increases, the value of junk silver coins will increase as well. By calculating the precise amount of silver in your junk silver coin collection, you can approximate how much your investment is worth. That’s it! Unlike with silver coins or bars, there’s no need to factor in the collectable value of the product or search around for specialized buyers. Junk silver coins are valued for their silver, so the spot price of silver is an adequate measure of their value. Investors often want to know: is junk silver a good investment? The relationship between junk silver’s investment value and the spot price of silver is a key factor. 

Junk Silver Dimes

Influencing Factors and Fluctuations 

Silver is a volatile market, especially when compared to gold. The overall value and spot price of silver is determined by several factors, and fluctuations can be abrupt and extreme. Speculation by buyers, demand for silver, and the overall supply of silver are all influencing factors in its spot price. 

When new silver mines reveal large caches of silver, supply increases and the value of silver is likely to go down. Whenever a new technology in high demand requires a high quantity of silver, the price of silver will likely go up. Some elements of market speculation are harder to predict and might require investors to do quite a bit of research to assess. Is junk silver a good investment? Market speculation can drive the price of silver in mysterious ways, and this directly impacts the value of junk silver coins, so the answer relies at least partially on the market. 

Economic Impact on Junk Silver Investments

Economic anxiety also impacts the value of junk silver investments. When economic anxiety is high and people fear the possibility of financial collapse, public demand for silver tends to increase. This leads to a higher spot price for silver, which is very good for investors with large caches of easily liquidated junk silver coins. 

Following market trends and measuring economic stability is one strategy to accurately measure the value of your investment in junk silver coins over time. Is junk silver a good investment right now, given present market conditions? Research will be your best friend when you attempt to answer this question. 

Final Thoughts

Junk silver can be a fantastic investment choice. Although it comes with the same risks as any other investment, junk silver offers investors the chance to buy substantial amounts of pure silver bullion at a relatively low cost.

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