Last Updated on January 15, 2024 by Ben
Silver has been a symbol of wealth and prosperity for centuries. It is also one of the most valuable assets on earth, which makes it an excellent investment opportunity for people who are looking to protect their savings against inflation and other economic crises. But most people don’t know how to invest in it. Fortunately, there are various ways you can get silver without taking out loans or paying high premiums. One way to do this is by investing in silver bars.
Advantages of Purchasing Silver Bars
Some of the advantages of purchasing silver bars are:
Silver bars are less expensive than silver coins
Producing silver coins requires more time, money and effort than producing silver bars. Silver bars can also be easily bought and sold because they represent a standard set weight of metal, whereas the value of coins or rounds is determined by their age, condition, mint mark (or lack thereof), year in which minted, current spot price etc. This makes it easier to determine if you are receiving the current value of your silver bars when you buy or sell it.
Silver bars are easier to store than silver coins
The large size of silver bars makes it easier to store than coins. Bars are also less likely to get lost or mishandled because they are more difficult to transport and convert into cash when compared with their smaller counterparts, the coins.
Silver coins when obtained in big quantities take up much more space compared to the same weight of silver in bars. Also, if silver coins are stored improperly they can lose value or become damaged. Silver bars don’t suffer this risk, although they still can be destroyed or lost if proper care isn’t taken during storage.
Silver bars are relatively easy to store and insure whereas silver coins are more difficult to take care of.
Why Should you Invest in Silver Bars
You should invest in silver bars and here are some reasons why silver is a great idea for an investment.
More Silver for your Money
Silver bars are a good way to start investing in silver bullion. They’re also easier for beginners because you can get more ounces of pure silver per dollar invested than if you were purchasing coins or rounds. It’s easy to purchase the size and amount that best suits your current financial situation by buying one bar, an exact number of smaller ones like coins.
Convenience of Storage
It is also easier to store silver bars than coins or rounds. Bars are more compact, and they weigh less, so it’s much easier to place them in a secure location where you won’t be worried about damage from things like water getting into the area. You can store your bars at home if you want, but many people like to keep their precious metals stored securely by a third party because you might not have the room, or you may not want the responsibility of caring for thousands of dollars in one place.
Tax Efficiency
It is also easier for you to take advantage of tax benefits when buying silver bars. When you buy and sell silver, the IRS considers this a form of trading, so you’ll have to pay tax every year when you do invest. But it is also easier for you to take advantage of tax benefits when buying silver bars.
When you buy physical silver (which again is any silver that isn’t in a coin) it usually has a small premium over the spot price. Selling some before the tax year ends and some after, can ensure that the annual CGT allowance isn’t breached, so no tax applies. Also, the IRS recognizes them as a collectible, so there’s no capital gains taxes on the purchase (or sale) unless they appreciate in value over certain thresholds. In general, it can be helpful because if you don’t have expertise with this type of investing, you won’t have to worry about taking on the risk that comes with investing in stocks.
How to Buy Silver Bars
Investing in silver bars is a really great investment decision. Silver bars have lower premiums than coins, and they are easier to store than coins. Here are a few ways how investors choose silver bars:
Decide the Weight of Silver Bars You Want to Buy
The first thing you need to figure out is what size or how many ounces of silver bars you want. Silver bars come in different sizes and weights. A range from 1-ounce to 1000-ounces are the most common and more the suitable weights for most investors. Bars are produced as heavy as 1,000 ounces, which is what banks, exchanges, and ETFs usually buy.
Silver prices are quoted in troy ounces which equals 31.103 grams or .0311034768 kilos or 12,350 grains (grains being the smallest unit still used for measuring precious metals). You can buy as few as one ounce, but many people prefer to buy at least ten ounces. This is because once you hit that mark, the per ounce price difference becomes very small and it’s not worth buying less silver bars for a smaller savings.
Although it might seem like a good idea to buy the biggest bar you could afford, you should keep in mind that it comes with few problems like you can’t divide the 1000-ounce bar and it is harder to find a buyer when the time comes of selling it.
Choosing a Silver Bar Mint or Brand
There are a lot of different refiners in the silver market and deciding which company to purchase from can be difficult sometimes. The only thing that you really need to know is whether or not they are a reputable and trustworthy refiner or brand.
To begin with, all reputable refiners will have proper stamping. As you choose a silver bar, be sure to check that the stamping is clear and legible. Silver Bars are also stamped with weight (measured in troy ounces) followed by purity, refinery (manufacturer’s name), and its serial number.
There are some silver bars that don’t have all of this stamped, which could mean it’s not a pure silver bar or has low quality.
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Where to Buy Silver Bars
There are numerous places where you can buy silver bars like online dealers, auction sites like eBay, and coin or bullion shops near you.
Just remember that if you are going to buy physical silver bars, it’s best to go through a reputable dealer that holds a good reputation in the market. A trustworthy dealer provides sound education, helps you avoid pitfalls, and most importantly, sells high-quality products.
There are a number of ways to judge a good dealer such as the quality of their customer service and they have a strong favorable review from other people. They also should have a large pool of dealers, have multiple forms of payment and strong educational resources for you to know of.
Try comparing different dealers with one another if you are new in silver investment. Also try to compare the total cost, the mode of payment, commission fees, shipping fees and insurance of the dealers.
What to Look for When Purchasing Silver Bars
No one wants to buy a silver bar that has been tampered with or is counterfeit. So, when you purchase your bars from an online dealer or at a coin shop near you, it’s important to check for the following:
Weight
Bars are available in a range of weights (1-ounce to 1000-ounces are the most common). The weight should be accurate and verified by an independent third party like a jeweler or bullion expert. If the weight is not accurate, it is possible that it has been tampered with.
Purity
The purity of the silver bar you are getting is extremely important. The purity should be written as a percentage, and any coins marked “pure” or “fine” silver are not of good quality. It is also important for other reasons like value: the higher the purity of your bar, the more it is worth.
Refinery
Another thing to take note for is the manufacturer of the silver bar. There are a few manufacturers that produce silver bars, and they all have different qualities.
Serial Number
You should be able to find a unique serial number on the silver bar. This is important for tracking and authenticity purposes.
What is the Best Size Silver Bar to Buy?
One ounce bar
One ounce silver bar is a good size to start with because it’s easy to find and you can easily sell it if you need to. This small bar contains about 31.105 grams of silver. It is also the size of most silver coins, so this is a good way for someone who is not used to shopping around for silver to get started.
Ten-ounce Bar
Ten-ounce bar contains about 311 grams of silver and is about the size of a DVD case. It is a good size for someone who wants to invest in silver but doesn’t want the hassle of carrying around more than one ounce at a time. It’s also an affordable way to start investing. It is almost half the size of a one kilo silver bar and if you want to own more silver, but the price is too high, you can buy these 10-ounce silver bars for less money than the one kilo and you’ll have almost as much silver.
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One kilo Bar
One kilo bar is probably the most popular silver bar and the bar is a similar size to a small brick. If you’re going to buy just one silver bullion, it should be a kilo silver bar because it has the most “widget” per dollar. It’s not the most convenient but it’s the choice of people who want to own silver bullion instead of a mutual fund or some kind of savings account.
100-ounce Bar
One hundred-ounce silver bar contains around 3.107kg of silver and would be roughly as heavy as two typical sized bricks (ten pounds each). It is one of the most popular choices worldwide. If you’re making a large investment in physical silver bullion, it might be the better choice than one or ten ounce ones because you’re paying a lot less for the same amount of silver. These bars have some of the lowest premiums on the market and are popular with investors buying silver purely based on premium.
1,000-ounce Bar
These bars are very heavy, and generally only purchased for storage. It contains around 31.07kg of silver and it is generally harder to find a buyer for these silver bars.
What’s the Difference Between Silver Bars and Silver Ingots?
Silver bar is essentially a far more refined ingot. It can actually be a specific technical term when referring to a standard Good Delivery bar. Bar is often used as a term to describe a type of silver bullion. The bars are rectangular in shape and typically weigh about 400 troy ounces each (roughly 110 pounds).
Bars can be bought from the same places that sell coins or bullions, such as coin shops, jewelry stores, banks and local precious metal dealers.
Silver Ingots is more of a description given to the shape of a piece of cast metal. It can refer to non-precious metals as well as bullion and usually has the shape of its original cast.
Silver ingots can be easily recognized by their flat, rectangular shape. You can think of Silver ingots as a clean slate in which silver and other precious metal takes the form of until they are needed.
The difference between these two products is that silver bars are cast into a bar-like shape and contain an average of 99% pure silver whereas silver ingots have the original form they were originally shaped from during casting.
How Silver Bars Are Made?
Silver bars are a popular way to invest in the precious metal. Silver is extracted from ore, then purified and refined. Once the silver is purified, it is cast into bars of a specific weight and stamped with its purity content as well as any other relevant information. The purity of these bars will typically range from 99% down to 90%, with anything over 95% being considered “investment grade” quality. Some modern bars are manufactured with a proof like finished appearance, and some are hallmarked.
Silver bars are typically sold in weights of one ounce, five ounces, and ten ounces. One ounce silver bars weigh 27.78 grams and contain .999 fine silver bullion; five oz. Silver Bars weight 155.52 grams., with .9999 purity content, while a Ten Ounce bar is 307.72 grams (with .9999 purity content as well).
The purer the silver, the higher its value. This is why bars that contain a lower percentage of silver (such as 90% or 80%) are cheaper than those with a high percentage of silver bullion in them such as 99%.
Conclusion
You may be starting to see that buying a silver bar is a lot more than just going out and plunking down your money for some. It is more than what meets the eye. You need to make decisions about how much you can invest in silver, which dealers to buy from, and then which kind of silver bars you want.
For people who already have a lot of experience with this kind of thing, it can be fun to make these decisions. But, for others it can seem like an overly complicated process. Just remember that when it comes to investing, you should only spend what you can afford to lose because this isn’t a sure thing. This is more of a long-term buy and hold investment rather than day trading type activity.