How to Invest in Silver - 90 Percent Junk Coins, Eagles, Or Bars?

There are various common forms of silver bullion to invest in. All of them can be great investments if acquired at the right price, however there are particular advantages to each form. In order to start investing in silver, the first thing you should learn is the different types of silver to buy.

Junk Silver

It's called junk, but it's anything but that. This term refers to commonly used dimes or quarters and half dollars that were minted prior to 1965 in the United States. Before that time, money contained 90% silver. These silver coins are in good condition, making the term "junk" as misnomer, but they have no numismatic or collectible value except that of the silver it contains. However, since they haven't been minted since 1964, and most of the junk silver has already been melted down, there is speculation that some day junk silver will have its own premium above silver.

Junk silver is used mainly used by people who want to invest in silver, although usually in small amounts. People often have the wrong notion that investing in precious metals would require a prohibitive amount of investment. With junk silver coins this is not the case, because you can easily find dealers who are willing to sell you junk silver coins for small amounts - literally the change in your pockets.

Junk silver is usually sold in bags, not by weight, but the face value of the coins. For example you could buy $100 face value, $500 face value or $1000 face value.

One problem with junk silver is that some have decimal values, such as the mercury dime which contains 0.07234 ounces.

Silver Eagle

The silver eagle is the official United States silver bullion coin. The good thing about Silver Eagle bullion coins is that they each have a face value of one dollar, and are highly recognized throughout the world. However, silver eagles tend to have a larger premium above the silver spot price because they are only produced by the US mint.

Silver Bars

The standard for Silver Bar is that it is made up of 99.9 percent pure silver or 0.999 fine. They vary in sizes, ranging from less than one ounce to up to one thousand ounces. Common sizes are one kilogram, one ounce, ten ounces, and five grams. They are sold from specialized traders and even over bank counters. They tend to have the lowest premium over spot, but aren't as beautiful or recognized as a silver eagle.

So the question is this: which one is the best one to trade? It depends on your overall plan and also the amount you have available for investment.

Do you only have a small investment to start with? Then investing in silver coins, particularly junk silver coins, is your best bet. You can purchase them from dealers in small amounts. Also, coins are easily recognized by people. You also have the possibility of encountering rare or historically valuable silver coins which has much higher value.

In terms of silver bars, they may give you the best bang for the buck, but they are usually better for larger investors. They also have the disadvantage of possibly needing to be assayed for their purity content.