Guide to silver

Silver coins

Silver coins and rounds are a popular but costly route to silver bullion ownership.  Under most circumstances, BullionVault provides a more efficient way to buy, store and sell silver bullion.

Rounds vs. coins and numismatic pieces

Silver rounds are circular discs of bullion, pressed or struck with an image or logo, and often carrying a weight and fineness for ease of identification. Resembling silver coins at first glance (many are sold as 'replicas' of the most popular coin), these rounds have no "face value" and are not recognised as legal tender.

Silver rounds are usually struck by private companies, but some government mints also produce them. Compared to silver coins, rounds cost a little closer to wholesale bullion prices, due to their availability and lack of official status.

Silver coins are typically a similar size and weight to rounds, but carry official markings – most importantly a face value, which is much lower than their bullion or "melt" value – plus the year they were minted. They are usually recognised as legal tender, if only to give some small tax advantage to investors or boost the coin's perceived value. Varying production volumes, year of production and designs mean that these so-called bullion coins – as distinguished from rare "numismatic" or collectible items – can command a premium over the spot price and over similar weighted rounds.

Numismatic coins are considered collectibles, and are typically priced well above their bullion value due to rarity, beauty or historic significance.  As such, numismatic coins are usually disregarded as a route to bullion investment, because their value is determined more by the sentiment of coin collectors than by changes in global spot prices.

Silver round & coin weights

The most popular weight for silver coins and rounds is one Troy ounce (1 oz), although smaller weights such as 1/10 oz, 1/4 oz and 1/2 oz are also produced. Australia's Perth Mint has produced one of the largest ever silver coins, a 10-kilo (22 pound) silver mega-coin with a face-value denomination of A$300.

Popular Silver Coins

Issuing Country Coin Coin weights Fine silver weight for 1 oz coin (fineness)
Australia Australian Koala Silver Coin 1 oz, 1/10 oz, 10 oz,  1 kg 31.104 grams (99.9%)
Austria Austrian Silver Philharmonic 1 oz 31.104 grams (99.9%)
Britain Britannia Silver Coin 1 oz 31.104 grams (99.9%)
China Silver Chinese Panda 1 oz 31.104 grams (99.9%)
Canada Canadian Maple Silver Coin 1 oz 31.104 grams (99.99%)
United States American Eagle Silver Coin 1 oz 31.104 grams (99.9%)

31.104 grams = 1 troy oz. Check gram/troy ounce prices.

Silver spreads and commissions

All bullion coins carry fabrication and supply-chain costs. These add significantly to the retail price, over and above wholesale prices. Because silver prices can also be volatile, retail dealers tend to charge wide spreads between their price to buy and to sell. This reduces their risk to ensure a profit margin.

A further reason for silver coins' high costs, as a proportion of your investment, is silver's lower price compared to gold. This means most retail purchases are for smaller sums of money, forcing dealers to raise their mark-up to 5% and often 10% over the coin's bullion value. 

The easiest way to check how much extra you're being asked is to use the live price table on the BullionVault homepage (or included below) to check the current price of silver in Zurich. Then compare the silver price per ounce with any of the coin dealer prices found through a Google search.

Silver Sales Tax

In addition to inflated spreads, silver coin and round investors may also pay sales tax depending on their own location. In the United States of America, each state is free to set its own sales tax rates for silver coins and rounds. In the European Union, anyone buying silver in any form delivered into their hand will pay value-added sales tax (VAT). This runs to 20% in the UK.

You pay no sales tax or VAT on BullionVault.  Here, large wholesale silver bars are ready vaulted in your choice of 4 global trading centres. Unless and until you choose to withdraw from the vault, each of these secure locations holds your property in tax-free zones or bonded warehouses.

Users choosing to buy silver in London, for instance, avoid the UK's 20% VAT sales tax. Because BullionVault is recognized by the UK tax authorities as a professional market participant, and its customers therefore benefit from the zero-rating exclusive to professional members caring for investment-grade silver on behalf of their clients. That sales tax is only triggered if you choose to withdraw your silver from the vault.

Silver storage and insurance

Storing silver coins at home may seem to provide convenience, but it carries a security risk. Arranging insurance privately is likely to be expensive and require additional safety measures.  With BullionVault your annual custody charge, for specialist secure storage – outside the banking system and with insurance included – is 0.48% by value, with a monthly minimum of $8.

You can start to trade silver today on BullionVault.  We provide every new user with 4 grams of silver to help you get started selling and buying on the orderboard.

Please Note: This analysis is published to inform your thinking, not lead it. Previous price trends are no guarantee of future performance. Before investing in any asset, you should seek financial advice if unsure about its suitability to your personal circumstances.

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