An investment in silver has never been easier to make than it is nowadays. Before, making a physical investment in silver required gassing up the car and driving to your local coin shop which, for many, was not simply a short trip around the corner. With the advancement of online business, making a physical investment in silver is as easy as a few clicks of the mouse.
One of the most popular investment vehicles for silver are silver bars. Coming in a variety of different sizes, silver bars are a perfect investment whether you are an established precious metals purchaser or just getting started. Though it may not seem like there isn’t much needed to be learned about an investment in silver bars, the reality is that there is a plethora of information that you would do well to know and think about before going online and buying any quantity of silver. This article’s purpose is to not only introduce you to the world of silver bars, but also inform you of the many things there are to know before you settle down and make an investment.
Sizes of Silver Bars
Silver bars can be found in a number of different sizes, ranging from extremely small to quite large. The size of the bar you purchase directly coincides with the size of your investment meaning that the more silver you purchase, the larger your investment will be. This much is a no-brainer, but something that isn’t so obvious are the different sizes of bars that exist and which ones might be good to purchase.
The smallest sizes of silver bars are without a doubt gram-sized bars. These pieces of silver are small enough to fit inside your pocket with ease and can be stored just about anywhere. Generally reserved for beginning investors or for gifting, gram-sized silver bars are on the low end of the scale as far as size of investment and price are concerned. Some of the most popular gram-sized silver bars are the 2.5, 5, and 10 gram variety. Since these bars are so small, they almost always come accompanied with something called assay. Assay is more or less a certification card attached to the silver which not only expresses what mint the bar is from, but also its size, purity, and serial number that can be verified with the producing mint.
Since most gram-sized silver bars are encased in plastic when they are shipped to you, assay is necessary to guarantee the authenticity of your bar. If you come across, for example, a 2.5 gram silver bar that does not come with assay, a red flag should almost immediately be raised in your mind. It is recommended that you only purchase bars that are this small so long as they have assay because counterfeits are all too common these days. That is not to say that every gram-sized silver bar without assay is counterfeit, but as a new investor it is not worth taking the chance as many reputable dealers are out there to offer you the same sized product with assay.
As you and your investment become more serious, ounce-sized silver bars may be what you are looking for. The variety that exists in ounce sizes of silver bars is much greater than with gram sizes and for this reason these larger bars are much more popular amongst investors. Sizes of these silver bars include 1, 5, 10, 20, and 32.15 (1 kilo) ounces. Many one ounce silver bars come with assay much like their gram-sized counterparts, but as the bar gets larger assay is found less often. Instead of the bar being encased in plastic and accompanied with a certification card, the verifiable serial number is stamped right onto the bar itself. 10 and 20 ounce silver bars are simply too large to encase in plastic and thus a stamped on serial number is a more sensible option.
Companies Producing Silver Bars
When an inexperienced or new investor looks at silver bars, it is common for them to be under the impression that each and every one of them is the same and has the same value, regardless of who the bar’s producer is. The reality is, just like it is in any other industry, two similarly sized bars produced by different companies are just as different as two seemingly similar pairs of pants produced by different companies. Some mints are more popular or trusted than others much like some clothing companies are more popular or trusted than others, and because of this the price you pay for two different bars will not always be the same if the bars do not come from the same mint. For this reason, comparing prices across different online dealers and producers of silver bars is vital for the investor who is looking to get the biggest bang for their buck.
Some of the most commonly found producers of silver bars are as follows:
- PAMP Suisse
- Credit Suisse
- Johnson Matthey
- RCM (Royal Canadian Mint)
Premiums Incurred on Silver Bar Purchases
Being that silver bars produced by different companies often carry with them different price tags, the premiums amongst different bars will also vary. For those not sure what a premium is, it can simply be described as the amount of money (over the cost of the silver composition of the bar) you pay to help cover the seller’s cost of business as well as to help the seller derive some sort of profit. After all, if premiums did not exist, online dealers of precious metals would be selling their products and merely breaking even, a business tactic that is not suitable for business longevity.
Since premiums are unavoidable, your goal as an investor is to purchase bars with the lowest premiums possible. This can be done by comparing the premiums you are asked to pay for similar silver bars on different sites. Only a little bit of digging will help you figure out that some sites apply astronomical premiums while others try to keep you as close to the spot value of the metal as possible.
A fun fact to know as an investor is that almost 100% of the time, the larger your purchase is, the smaller your premium (per ounce) will be. This is an online dealer’s way of rewarding a customer for spending a decent amount of money on their site. Decreasing the premium as the purchase quantity goes up is also a way to encourage you to buy more silver in one sitting. If you have the funds available, it is almost always smarter to make a large, bulk purchase of silver, rather than piece meal an investment together over time because the savings are realized instantaneously.