How to Buy Silver Bullion

Posted on January 21, 2022

Silver, like gold, has been an important commodity and precious metal for thousands of years. Today, while most currency isn’t made from precious metals, silver bullion is still valuable and sought after by millions of investors around the globe, making it a highly desirable asset worth considering. Let’s examine how you can buy silver bullion for yourself. 

What is silver bullion?

american eagle silver coin reverse imageLet’s start by defining silver bullion. Technically, silver bullion refers to refined silver in any form whose intrinsic value is based solely on its precious metal content. This definition makes more sense if we specify what “bullion” excludes: Special releases of coins (including proof coins), collectible coins with numismatic or historical value, jewelry, and scrap would not be considered bullion. Although these items derive a portion of their value from their precious metal content, other factors may also influence that value. 

Silver bullion may be purchased as bars, official government-minted coins. Or rounds or medals (coin-like objects that don’t have a face value).

Who should I buy silver bullion from?

For most people, silver bullion should be purchased from reputable bullion dealers and authorized distributors of U.S. Mint bullion. These established businesses have been operating for years and offer both expert knowledge and high-quality bullion. If you have the option of buying directly from a government mint, such as the Perth Mint in Australia, that’s a great option, too. However, you should be aware that many government mints don’t make all of their products available directly to the public. 

How do I choose?

Generally speaking, the goal is to acquire as much bullion as possible. Since silver has an established spot price (market rate per oz), look for items that are minted of high-quality silver (0.999+ fine, or pure) priced as nearly as possible to the spot price of silver. 

Use the Internet to your advantage by reading reviews and conducting diligence on the dealer. If you’re looking for “discounted” silver and are less averse to risk, you can explore buying from private sellers, but beware of the potential risks. Odds are high you’ll either overpay or end up with lower-quality metal. 

How does each process work?

Buying from a bullion dealer is simple. Most people will purchase physical silver online, but there are certainly still some brick-and-mortar dealers who carry silver on-site. You can buy online 24/7, just as you would any other item on the Internet–just recognize that prices can fluctuate every few minutes. 

For a private sale that isn’t transacted with third-party oversight like eBay’s, many people will meet up in a public location to make an exchange. 

What bullion options do I have? 

If you want to buy silver bullion, you have a few options to select from. Silver bars are certainly a popular, affordable choice, as are silver rounds (essentially, bars that are round and look like a coin but are not currency and do not have a face value). Silver coins (coins are distinguished from rounds because coins are government-issued and have a face value) can also be an excellent choice for those who know what they want and why.

Finally, junk silver refers to circulated silver coins minted before 1965 and composed of 90% silver. 

How do I decide between them? 

Silver bars and rounds are the simple, cost-effective way to buy silver bullion. Silver bars and rounds are the top picks for those interested in pursuing silver bullion for its metal value alone and acquiring it at the lowest cost above the spot price. 

Silver coins are a great option as well, and they can often fetch a higher price due to numismatic value. If you’re a collector or see value in collectible coins, silver coins might be a good choice. Of course, there’s no guarantee of this. Silver coins are also widely recognized and easy to identify, so they will almost always be priced higher than silver bars and coins. 

Junk Silver appeals to investors, with a low price barrier to entry and the benefit of dividing and selling in smaller portions or in larger bags. Junk silver straddles the line between silver bars and silver coins. Since junk silver is currency, you can always use it for its face value, but it’s more commonly traded for its melt value. 

What are my shipping options? 

Many bullion dealers, such as BullionMax, offer free shipping for orders over $199. For orders of less than $199, shipping is a flat $9.95. 

silvertowne silver bar 10 oz imageSilver bullion can be shipped in several different containers. Monster boxes are an interesting proposition for larger purchases of silver. Monster boxes are rugged and secure plastic boxes, miniature crates really, with special sleeves to hold silver bullion and protect it during transport and storage. These boxes are used by the U.S., Austrian, Canadian, and Perth Mints. Sometimes, empty monster boxes are sold online as an organization and storage solution for silver stackers. 

Silver coins are also often shipped in coin sleeves or tubes, which helps keep the coins safe and organized. Packaging for silver bars can consist of plastic cases or softer rectangular-shaped tubing. Junk silver is usually shipped in a bag but can sometimes be packaged in ordinary coin wrappers. 

How do I pay for the silver? 

You can choose from numerous options to pay for silver bullion, such as: 

How does the amount of silver I buy matter in the buying process? 

You might notice that the smaller quantities of silver are more expensive per ounce than larger sums. This is because there are minimum fees that get passed along to you as the buyer. When purchasing larger quantities of silver, since silver is far less expensive than gold per ounce, considerations include added cost of storage and shipping. 

Every bar, round, and coin–from 1 g to 100 oz–has baseline manufacturing costs. If you buy ten 1 oz bullion bars, you’ll pay manufacturing costs on each bar, whereas if you buy one 10 oz bar, you’ll only pay manufacturing costs for a single product. As a result, you might find that purchasing $1,000 of silver will be marked up more than buying $1,000 of gold since you’ll be paying for more coins to arrive at the same $1,000 value.

Can I buy silver and have it stored for me?

Yes. You can buy silver and have it safely stored for you at precious metals depositories and other bullion storage facilities. There are special vaults and depositories for storing valuables like bullion, which offer the security you need to safeguard your silver. Another easy option for silver bullion storage is a safe deposit box at your local bank. Safe deposit boxes aren’t specific to silver, but a bank’s security will be far superior to your home’s. 

How do I insure the silver I buy?

Many bullion investors will choose to insure their silver by having it stored in a secure vault or facility which has insurance. For those with physical silver at home, a floater can be added to your existing homeowner’s policy to increase the coverage limits for silver bullion. 

What are some things I should avoid/lookout for when buying silver?

When shopping for silver, you want to avoid unauthorized dealers and silver whose origin and qualities are unknown. While there are plenty of honest people selling their own silver directly to private buyers, these types of transactions can leave you the victim of costly scams. Generally speaking, anyone who offers to sell you silver at below spot price is likely misrepresenting their product.

How do I avoid these problems?

valcambi combibar 100gThe best way to avoid problems when buying physical silver is to research the product and the person you’re buying from. Some silver bullion products like the Valcambi Suisse silver CombiBar come with an assay card. Other silver bullion products, like the Britannia silver bar from the Royal Mint, are engraved with their refiner, weight, and purity. 

Refiners and mints worldwide are exceptionally aggressive against counterfeiters, and many have developed anti-counterfeiting technologies incorporated into their silver bullion. The Royal Canadian Mint’s silver maple leaf, for example, includes hard-to-copy micro-engravings and a physical verification program to deter fraud.  

If you’re transacting with a dealer, check to make sure they’re authorized; at the very least, take advantage of reading reviews from other buyers to ensure you’re working with a reputable business. 

For products without the original assay card or certificate, there are grading services that evaluate the quality of silver bullion. If you find yourself in a pinch, you can always use the simple silver ping test or a nitric acid test kit to determine if the silver is real.