Should I Buy Silver Bars or Coins?
Once you’ve decided that silver is the right choice for your growing bullion investment portfolio, it’s time to make yet another choice. What is the best form of silver to buy? Is it smart to buy silver bars? These are common questions we get from new and seasoned investors alike. We’re here to help. In this guide, we’re discussing the main differences between two of the most popular silver products, bars and coins.
Factors to Consider When Choosing Between Bars and Coins
Investors trying to choose between silver bars and coins should consider their purpose of investment, the liquidity and resale potential of both products, and premium costs of silver bars versus coins. Developing a solid strategy backed by trends and analysis of silver price trends is one way investors can protect themselves against unnecessary risk exposure. Should I buy silver bars or coins? Closely monitoring the market can help you make the soundest posssible investment decision.
Purpose of Investment
Why do you want to invest in silver in the first place? This may seem like a simple question, but the answer should fundamentally shape the way you spend your money within the precious metal sector. Different investors have different goals. Some silver investors want to put their money on the metal itself and don’t care much for collectability, while others are very interested in the numismatic value of certain silver coins. Should I buy silver bars or coins? The answer is always going to depend primarily on your own investment goals and objectives.
Understanding your personal investment goals helps to lead you in the direction of smart, safe bullion investments.
Long-Term Wealth Preservation
If the goal behind your investment is long-term wealth preservation, then silver bars are likely the better call. Because silver bars are sold very close to the spot price of their silver content, these products keep investor collections growing without forcing you to sacrifice hundreds of dollars in unnecessary premiums.
Silver bars can also be conveniently stacked, and many investors choose not to wrap their bars in protective films or coatings, which also helps cut down on costs. Should I buy silver bars or coins for long-term investment? Both bars and coins can help the value of your portfolio grow over time.
Collecting and Hobbyist Interests
For most collectors, silver coins are more interesting to collect and look at than silver bars. The brilliant shine of a polished silver coin, especially combined with beautiful obverse/reverse artwork, makes these coins highly valuable outside of their pure silver content. Certain silver coins, such as the Silver Britannia, are both highly recognizable and likely to appreciate in numismatic value over time.
While silver bars are perfect for wealth preservationists, silver coins are the top choice of your average silver collector. Should I buy silver bars or coins for collectability? The beautiful designs and numismatic potential of coins makes them a common choice.
Liquidity and Resale Potential
How easy is it going to be to sell my silver investment when it’s time to liquidate? This is a question all investors should ask themselves before sinking thousands of dollars into expensive silver coins or bars. We’ll cover the resale potential of silver bars and coins in the sections below. When you ask, “should I buy silver bars or coins,” the liquidity of your investment is important to keep in mind.
Market Demand for Bars Vs. Coins
The good news is that silver bars and coins both have relatively high market demand from common investors. If we had to choose a ‘winner,’ we tend to give it to the silver coins. Silver bars can certainly be resold without issue, but coins appeal to a larger breadth of global collectors on the bullion market. Because of their numismatic value, both pure silver investors and collectible enthusiasts exercise high demand for silver coins. Should I buy silver bars or coins for high market demand? We usually default to highly collectable silver coins.
Factors Influencing Resale Value
When it comes time to sell your cache of silver coins and bars, two main factors influence resale value: demand for silver and collectible value. While the demand for silver is an independent variable and doesn’t change based on the type of silver you’re selling, collectability certainly influences the resale value of the silver piece you choose to sell.
Silver coins are generally easier to resell than silver bars, provided that your silver coin is highly valued or in-demand by silver coin collectors. Why are silver coins better than bars? And should I buy silver bars or coins? For the investors we’ve spoken to, the resale value of silver coins is one major factor. Should I buy silver bars or coins to stack silver? If resale value is your primary investment goal, coins might be the better call.
Premiums and Pricing
We’ve already covered the resale value of silver bars versus coins. But especially for new investors, the entry cost of buying these products is an important consideration in their viability as stores of wealth. If initial investment cost is a concern for you, then silver bars may be a better bet than silver coins. Should I buy silver bars or coins to minimize premiums? Bars are a clear winner for people on a budget because of their minimal premiums.
Silver bars are often sold with the lowest precious metal premiums over spot in the industry. Silver coins, particularly the coins from famous mints like the Silver Eagle, are marked up with an additional premium over the spot price of silver. While bars also come with a premium, they’re usually sold much closer to spot price. This makes silver bars a cheaper way to invest in more silver than most silver coins. When budget investors ask us, “should I buy silver bars or coins,” we generally recommend silver bars because of their limited premium costs.
Pros and Cons of Silver Bars
While it’s true that silver coins offer a much higher numismatic value than their bar-shaped counterparts, there are both advantages and disadvantages to buying silver bars. In this section, we’ll walk you through the good, the bad, and the ugly about buying silver bars for investment. Should I buy silver bars or coins? Let’s take a closer look at silver bars to help you make up your mind.
Advantages of Silver Bars
As we addressed above, silver bars are a favorite for investors who want to minimize premiums and maximize their silver content while investing. But silver bars also come with an additional, hidden advantage. Many mints make silver bars in varying denominations, meaning that you have a much higher variety of sizes available when buying bars compared to silver coins.
Lower Premiums and Cost-Effectiveness
Silver bars are usually minted without very many bells and whistles. A few companies design fancy silver bars with intricate, eye-catching obverse designs. But this is the exception and certainly not the rule. For the most part, expect that your silver bar will bear the logo of its mint, an assurance of its silver content, and little else.
Because of this unexciting design, silver bars are generally sold at a price very close to their value in pure silver. This makes them the more cost effective option, especially compared to the high-premium price of most silver coins.
Variety of Sizes and Weights Available
Popular coins like the Silver Britannia are extremely limited in their size variety. Many mints only offer their most popular silver coins in 1+ troy oz variants. This can make it hard for investors who only want to build their collection using smaller pieces, and it might also be problematic when it comes time to sell. It’s not fun to need some cash and be forced to liquidate several full troy ounces of silver at one time.
Silver bars make the selling process easier. These silver products are available in multiple smaller denominations, and some mints even sell 1 gram silver bars! If you prefer smaller and variable sizes for your silver products, consider silver bars.
Disadvantages of Silver Bars
Silver bars come with two main downsides: the risk of counterfeiting and their lack of numismatic value. We’ll cover both disadvantages of silver bars in this section.
Potential for Counterfeit Bars
Silver bars can occasionally be beautiful and intricately designed, but this is the exception to the general rule. Because of their limited design value, it can be pretty easy for criminals to counterfeit the look of a genuine silver bar. To make matters worse, some counterfeiters won’t even include .999 pure silver in their counterfeits. When it comes time to sell, having a counterfeit silver bar could be disastrous.
To avoid the risks of receiving counterfeit bars, make sure to carefully vet any dealer you do business with. Hero Bullion only offers 100% genuine silver bars from reputable mints.
Limited Numismatic Value
Look elsewhere if you’re looking for a highly collectible silver product. Coins might be collected en masse by an eager community of coin enthusiasts, but silver bars aren’t quite as valuable to the average collector. Some silver bars do have a bit of numismatic value, especially if they’re beautifully designed or minted by a popular national mint. For the most part, however, silver bars just can’t offer the collectability of silver coins.
Pros and cons of Silver Coins
Silver coins might offer an excellent option for investors who love numismatic value, but they also come with a few downsides. We’ll cover both the good and the bad parts of investing in silver coins in the section below.
Advantages of Silver Coins
Investors have used silver coins to build and store wealth for thousands of years. Their recognizability, acceptance from other collectors, and high numismatic value are just a few reasons why silver coins remain king in the silver bullion marketplace. Should I buy silver bars or coins for maximum investment potential?
Recognizability and Universal Acceptance
Everybody knows what a silver coin looks like, and even non-collectors can usually spot a Canadian Silver Maple or a Silver Britannia. On the other hand, it might take an expert to adequately identify a legitimate Royal Mint 10 oz bar. The high degree of recognizability is one reason why silver coins are one of the most popular ways to invest in silver bullion.
Potential for Numismatic Value
Not all silver coins contain significant numismatic value, but many government-backed coins do. Coins minted by government mints like the British Royal Mint or the Perth Mint are often released as a part of larger collection, which adds even more potential numismatic value to the transaction. Decades after the initial release of the series, for example, people are still paying extra for original Silver Lunar Series I coins.
Numismatic value is determined both by the design of a coin and the history behind it. Many silver coins from popular global mints offer incredible designs paired with a storied history, making them perfect for collectors who value numismatic resale potential.
Disadvantages of Silver Coins
Here, we’ll cover some of the downsides of the most popular way to invest in silver.
Higher Premiums and Cost
We won’t bore you too much with talk of premiums and cost, since we’ve covered this point multiple times already. However, it’s important to remember that the beautiful design of a silver coin often comes at a hefty cost. The premium over spot associated with silver coins cuts into the amount of silver you get for your money.
Limited Selection of Sizes and Weights
We explained that silver bars are often sold in 1 gram variations, which makes it easy for investors without much investment capital to get their hands on some high-quality silver. This isn’t the case for silver coins, which are usually sold only in higher denominations.
Comparison of Silver Bars and Coins
After you make the call between silver bars and silver coins, it’s necessary to compare different bars/coins against one another. In this section, we’ve come up with four things that the smart investor considers when he/she decides between different types of silver bars or coins. Should I buy silver bars or coins, and what are the main advantages of both?
Purity and Weight Standards
While you likely won’t find much of a disparity in purity standards for silver bars, some silver coins might come with .999 instead of .9999 pure silver bullion. Bars might also have some small variance from mint to mint. If you’re looking for the purest possible silver, make sure to carefully look at purity standards before doing business with a mint.
Recognized Refiners and Mints
You might score a good deal on premiums if you do business with an unrecognized mint, we generally prefer to deal primarily with famous, popular mints. Doing so helps to improve the recognizability of your product, which can maximize resale potential when it comes time to sell your bullion for cash. Should I buy silver bars or coins from a private mint? Coins can only be minted by sovereign mints, but the wide variety offered by private distributors makes bars an interesting choice for many collectors.
Secondary Market and Resale Potential
What kind of secondary market does your silver bar or coin have? Are people still buying older editions of the silver product, or are there a ton of unsold listings for it online? These are important considerations for collectors looking to answer the question, “should I buy silver bars or coins?” Even for collectors, silver coins and bars are, first and foremost, an investment. Evaluating the exit options for your investment is an important part of the purchasing process, and you should factor this into your decision on which silver bar or coin to buy.
Accessibility and Availability
How easy is it going to be to get your hands on the silver bar or coin that caught your eye? Availability can be a double-edged sword. On one hand, low availability makes it more difficult for you to find the right product at a reasonable price. However, low availability means the item is scarce, which might make it more valuable to collectors on the secondary market. Should I buy silver bars or coins, given current market conditions? Smart investors closely survey the secondary market to make their call.
Making the Decision
Should I buy silver bars or coins? Consider the following factors before making your decision.
Consider Your Investment Goals and Preferences
What is the ultimate objective of your investment? If you just want some silver, then silver bars offer the most cost effective option around. Some investors love the look and feel of silver coins, and others prefer the potential numismatic value appreciation they offer. If this is you, then consider silver coins. Should I buy silver bars or coins for a healthy portfolio? A good mix of different products helps you to diversify, which is never a bad thing.
Diversification and Portfolio Allocation
You should always be diversifying your portfolio as much as possible. For silver collectors, this might mean a healthy mix of silver bars and coins. It might also mean buying some paper stocks or investing in other precious metals alongside your silver stacking project. Either way, make sure you consider how your silver investment fits into a long-term diversification strategy. Should I buy silver bars or coins? Your investment strategy should answer this question.
Hero Bullion is glad to offer a long list of different silver products to help you keep your portfolio both diverse and profitable.
Seek Professional Advice if Needed
It should go without saying, but make sure to consult professionals before diving into a new investment strategy. Your financial advisor should be able to tell you which silver products might be wisest to invest in, and the experts at Hero Bullion are always happy to help investors guide their portfolios. If your question is still, “should I buy silver bar or coins,” the advice of a financial planning expert might be helpful.
Final Thoughts: Should I Buy Silver Bars or Coins?
Finally, we’re back to the main question of today’s Bullion Academy post: should I buy silver bars or coins? It’s hard to go wrong with any silver bullion product, but many investors want to know whether it’s better to invest in silver bars or coins. Generally, silver bars offer a lower entry price and a lower numismatic resale potential, while silver coins are more expensive and also more collectible.
If you have additional questions about silver coins versus bars, please don’t hesitate to reach out to our team!
About The Author
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.