How to Buy Silver Bars

How to Buy Silver Bars

With all the hubbub about investment-grade gold, it is easy to forget about humble silver.  Silver is cheaper than gold simply because there’s more of it.  Silver is an investment equal to gold in terms of expected profit, and you can afford more of it by virtue of it being less expensive. 

If you want to buy silver bars, the process is fairly simple.  Here’s a quick guide to buying silver bars. 

1.  Learn About Silver

You need to know just enough about silver to be able to know if the price you’re going to pay is a good one.  High quality (investment-grade) silver bars are always stamped with the bar’s weight, the name of the mint, and the quality or “fineness” of the silver.  Investment-quality silver is usually .999 Fine.  This means that the silver bar is at least 99.9% pure. 

The size of the silver bars themselves will vary from the smallest single ounce wafers to gigantic 1000 ounce silver pieces known as “pricks.”  The cost of the bar is figured by the current ounce price of silver–you can check this price in your newspaper’s financial section or online.  Don’t expect to pay the price of silver–dealers always add a premium to cover their own costs. 

2.  Open an IRA Precious Metals Account

IRAs (Individual Retirement Accounts) are great ways to protect your investment from taxation.  Because there are complicated rules about opening these accounts, check with the IRS (specifically publication 500) before you decide to open an IRA precious metals account. 

3.  Secure Your Investment

Since precious metals are easy to turn into cash, they are easy targets for theft.  The brokerage firm you invest in silver with may offer what is called a “custodial” service to store your silver and other precious metals, for a fee of course.  You could also rent a safe deposit box at your bank or purchase a high-quality safe and keep your silver safe at your home. 

4.  Choose the Size of Bars You Want

As long as the silver you buy is at least .999 Fine, the brand doesn’t matter as much as the size.  Smaller silver bars cost more per ounce but are good for people who want to buy small lots of silver at a time.  For large purchases of silver, you can buy it in 100 ounce bars–you save a little money buying in large chunks like this.  Remember that the largest size silver bars (1000 ounce) weigh 68 pounds–you’ll probably want to arrange to have them stored professionally.  Ever tried to move a 68 pound bar of silver around in your minivan?  It’s tougher than it sounds. 

5.  Find a Dealer

You can buy silver bars directly from the mints themselves or from online precious metals dealers.  There are also lots of jewelers and coin dealers that carry silver bars and other forms of precious metals.  The US Mint keeps a list of trusted Bullion Dealers. 

6.  Watch Your Investment

The whole idea behind buying silver bars is to turn a profit, right?  That means watching the market price of silver.  While you’re at it, keep good records of your silver purchase for tax purposes.