Silver bullion comes in all shapes and sizes. When purchasing silver, investors can choose from coins, bars, and fractionals at varying levels of fineness. That being said, is there any form of bullion that has a significant advantage over the other?
Today, we’ll discuss whether it is best to buy silver coins or bars should you decide to invest. To start, we’ll explain what these forms of bullion are and how they differ.
The Difference Between Silver Bars & Coins
You might think the only difference between silver coins and bars is their appearance, but you’d be mistaken. Coins and bars are not only different in their physical shape, but their purpose is also unique.
Coins are legal-tender money. On the other hand, bars are manufactured solely for their merits as bullion. The government does not legally classify bars as currency.
Advantages of Silver Coins
Coins have several advantages over bars:
- Coins are legal tender and come with a guarantee of quality from the government, which means they have more recognition in the market. This makes them easy to liquidate.
- Coins are much easier to “barter” or trade-off during a crisis than bars, according to silver expert David Morgan.
Another potential advantage is that some coins that are considered numismatic may be worth more than their precious metal content. To find out why let’s quickly go over the difference between numismatic and bullion coins.
Numismatic Coins Vs. Bullion Coins
Bullion coins are purchased mainly as an investment and are manufactured year-to-year. They are considered to be a form of currency, an asset with a defined value that remains consistent for the most part. Examples of coins in this category include:
- S. Gold Eagles
- S. Silver Eagles
- Canadian Silver Maples
- South African Krugerrands
- 90% Junk Silver (pre-1965 quarters, dimes, half-dollars, etc.)
Rare or collectible coins are known as numismatic coins. Unlike bullion coins, the value of a numismatic coin is influenced greatly by its rarity and condition, not just its precious metal content. If a numismatic coin is rare and in great condition, it can often trade over the spot price of the precious metal it contains.
For example, a silver numismatic coin might have the same amount of precious metal content as a silver bullion coin, but its collectible value may allow it to sell at a higher price.
Examples of numismatic coins include:
- Peace Silver Dollars
- British Sovereigns
- Swiss 20 Francs
- Pre-1933 $20, $10 Eagle coins
However, before buying a numismatic coin as an investment, consider what precious metals broker Don Stott once said, “Even though there are those who use numismatic coins as a store of wealth, their value is not always associated with the bullion spot price. Only the most experienced collectors are successful at employing this tactic.”
One potential disadvantage to note is that coins often come with a higher premium than bars.
Pros and Cons of Silver Bars
Bars come with two key benefits:
- Bullion bars are compact, stackable, and easy to store.
- Bars have the lowest premium over spot price.
Although bars may have the best value, a disadvantage could be that they are harder to liquidate than coins.
The Right Choice Varies
Whether or not silver coins or bars are better depends on who you are as an investor. Smaller investors may have more use for collectible, legal tender assets like coins while large investors might not need collectible assets – they need silver that can be purchased at a lower premium over the spot price.
Regardless of whether you’ll be buying silver bars or coins, it’s important to buy your assets from a trusted supplier. Consider using a reputable precious metals refiner like Manhattan Gold & Silver that sells bullion at fair prices and offers storage solutions to keep your investments safe.