What Is Junk Silver?

Posted on February 15, 2021

Silver comes in a variety of forms, one of which is junk silver. This type of silver may not be numismatic, but it's a great asset that can increase in value over time. Learn more about junk silver to determine whether it could be a suitable investment option for you.

Why Is Silver Important?

Also referred to as white metal, silver is a precious metal that's becoming increasingly limited in supply. It's also a noble metal that's highly resistant to oxidation and corrosion. Its relative affordability and good potential to rise in value make it a great option for investors, especially those who are just starting out. Silver possesses many unique characteristics that make it useful for a wide array of applications. The following are some examples of how silver is being used today:
  • Electrical products: Silver is the best electrical conductor among metals, making it perfect for electrical applications.
  • Medical and consumer products: Silver is widely used in the production of medical and consumer products because of its non-toxic and antimicrobial qualities.
  • Jewelry, silverware and mirrors: Due to its high luster, non-corrosive properties and reflectivity, silver is a preferred metal for making jewelry, silverware and mirrors.
  • Industrial wires: Silver is ideal for making thin and flexible industrial wires because of its electrical conductivity, malleability and ductility.
  • Film photography: Since it is a photosensitive metal, silver also plays an important role in film photography.

What Is Junk Silver?

Many people think that junk silver is just another term for scrap silver, but that isn't necessarily true. Junk silver refers to silver coins that are in fair or poor condition and have no collectible value. Such coins are called junk silver because they're solely valued according to their metal content rather than their condition or collectibility. In this case, the word junk just means non-numismatic. However, similar to other forms of silver, junk silver has value and a place in investment portfolios.

Why Does Silver Become Junk Silver?

In the past, many American coins were made of 90% silver. However, due to a dwindling supply of silver in the 1960s, the United States government decided to use other types of metals to produce coins, such as copper and nickel. As a result, the federal mint stopped making silver coins in 1965. [1] Although they aren't being circulated anymore, American silver coins are still out there in huge numbers. Some of them remain in good condition because of proper storage and maintenance, while others have been neglected and have lost all their numismatic value. Those that no longer hold any collectible value make up the existing American junk silver.

How Is Junk Silver Processed?

Junk silver is often sold to coin dealers as a random collection of pre-1965 silver coins in poor to fair condition. The dealers package these coins in bags of varying sizes, which are commonly called 90% dealer bags. The face value of these bags is usually $1, $100, $500 or $1,000. Any combination of junk silver coins with a face value of $1 contains 0.715 ounces of 99.9% fine silver. As such, the most common 90% dealer bags and their total silver content are as follows:
  • A $1 bag of junk silver has 0.715 ounces of 99.9% fine silver.
  • A $100 bag of junk silver has 71.5 ounces of 99.9% fine silver.
  • A $500 bag of junk silver has 375.5 ounces of 99.9% fine silver.
  • A $1,000 bag of junk silver has 715 ounces of 99.9% fine silver.

How Much Junk Silver Is Produced?

To get an idea of how much junk silver has been produced, take a look at some of the best-known junk silver coins and their mintages:
  • Mercury dime (1916 to 1945) ” more than 2.6 billion minted
  • Standing Liberty quarter (1916 to 1930) ” 227 million
  • Walking Liberty half dollar (1916 to 1947) ” 485 million
  • Ubiquitous Washington quarter (1932 to 1964) ” 3.8 billion
  • Roosevelt dime (1946 to 1964) ” 6.6 billion [3]
As you can see, the United States Mint produced billions of silver coins before 1965. If they're still in existence today, the majority of these coins don't have any numismatic value because they're either too common or they suffered too much wear and tear over the years, so there's really a vast amount of junk silver out there.

What Are the Applications of Junk Silver?

Junk silver has been used in a number of ways. Numerous silver coins from the past have been melted to recover their silver content, which is then used in a wide array of applications. Others are sold to coin dealers, pawn shops and antique stores or kept as assets or mementos.

Why Buy Junk Silver?

So, is junk silver worth buying? Yes, it definitely is a good idea to invest in junk silver. Below are several reasons why junk silver investing is becoming increasingly popular:
  • Easily accepted: Junk silver is widely regarded as the real thing. It doesn't need to be assayed or appraised. Every dealer knows that a $100 bag of junk silver contains 71.5 ounces of 99.9% silver and won't hesitate to pay you accordingly.
  • Readily divisible: You can divide up your junk silver any way you want. For instance, a $100 bag can easily be divided into two $50 bags or 10 $10 bags.
  • Not prone to confiscation: Junk silver has never been confiscated. You don't have to tell anyone about your ownership.
  • Easy to store: Since it comes in bags, junk silver is easy to store and doesn't take up a lot of space.
As the price of silver continues to rise, now is an opportune time to start investing in junk silver. If you're wondering how much junk silver you should own, it depends on your budget, risk tolerance and investment goals.
Article Sources: 1. Silver Monthly. 'Why Did Silver Coinage End in the United States?,' http://www.silvermonthly.com/why-did-silver-coinage-end-in-the-united-states. Accessed September 23, 2020. 2. Coin Community. 'Roosevelt Dime 1946 - Present,' https://www.coincommunity.com/us_dimes/roosevelt.asp. Accessed September 23, 2020.