How to Buy Silver: A Guide to Investing and Selling

Experts expect silver demand to reach 1.2 billion ounces in 2024, which is one of the highest recorded levels. This surge is driven by a growing demand for silver in electronics and renewable energy. Silver is becoming an attractive option for investors looking to diversify their portfolios as prices continue to rise. 

In this guide, we’ll explore how to buy silver, silver IRAs, and silver exchange-traded funds while providing practical advice for investing in and selling silver.  

5 ways to buy silver

In this section, we’ll cover five of the most popular ways to invest in silver. Each method is suited for a different type of investor and has unique pros and cons. These options will help you decide which method is best for your investment. 

Physical silver

Buying physical silver is straightforward, like purchasing any other tangible asset. Physical silver comes in the form of coins, bars, or rounds. Start by deciding which form you would like to purchase and selecting a reputable dealer. If you prefer direct ownership and have a secure storage solution, this method is best for you. 

Pros

• Direct ownership

  You have total control over your physical silver.

• No third-party risks

  No third party is involved, as is involved with stock ownership.

• Tangible asset

  It can act as a hedge against the future devaluation of cash.

Cons

• Storage

  You need a secure storage solution—ideally a vault or safe.

• Liquidity

  Selling physical silver isn’t easy when compared to other investments, such as stocks.

• Premiums

  Dealers usually charge a premium on the spot price at the point of sale.

Silver IRA

A silver individual retirement account (IRA) lets you hold physical silver in a depository while your retirement account benefits from tax advantages. It’s important to mention that the silver must meet IRS-approved purity standards and can’t be stored at home. This method is best for investors looking to diversify their portfolios and take advantage of tax breaks. 

Pros

• Tax benefits

  Contributions are tax-deductible in a traditional silver IRA, and withdrawals in retirement are tax-free if you’re using a Roth silver IRA.

• Diversity

  Prices of physical assets like silver may move in the opposite direction of stocks and bonds during inflation, helping to balance out your portfolio.

• Professional attention

  A custodian oversees the handling of the silver for you, keeping your account compliant with IRS regulations.

Cons

• Higher costs

  Custodian fees, depository fees, maintenance fees, and transaction fees increase the cost of owning a silver IRA.

• More steps

  Opening and managing a silver IRA calls for a few more steps than a traditional IRA.

• No instant access

  You can’t hold or store your silver yourself, and early withdrawals come with penalties.

Silver ETF

A silver exchange-traded fund (ETF) holds physical silver or tracks its market price. You can buy or sell shares of these funds like stocks on an exchange. ETFs are convenient options for investors who want exposure to silver without the hassle of having to store it. 

Pros

• Highly liquid

  ETFs trade on most major exchanges, so buying and selling them is quick and easy.

• No storage concerns

  You don’t need to worry about storing physical silver.

• Lower transaction fees

  ETFs generally have lower transaction fees compared to buying physical silver.

Cons

• No direct ownership

  You do not own the silver.

• Management fees

  ETFs charge an annual fee that can eat away at your returns.

• Third-party risk

  You must rely on a fund manager to hold and manage the silver.

Silver mining stocks 

Buying a silver mining stock is the equivalent of investing in shares of a silver mining company. The method gives you exposure to the precious metal, but the value of the stock is tied to the company’s performance and market trends. Experts expect silver mine production in 2024 to rise 4%, its highest since 2018. 

Pros

• Significant gains

  If silver prices rise, you can potentially make big gains on your investment.

• Diversity

  Mining companies may also mine other metals, which can provide exposure to other precious metals.

• No storage fees

  You’re invested in a company, not the physical metal, so you won’t pay storage fees.

Cons

• Risky

  Stock performance depends on the company’s performance, not just silver prices.

• Volatile

  Mining stocks don’t always track with silver prices and can be volatile.

• Data-driven

  Investors need to analyze the company’s financials and overall market conditions before investing.

Silver futures

Silver futures are contracts to buy and sell silver at a predetermined price at a future date. They allow you to speculate on the future price of silver. This method is only suitable for experienced investors with an appetite for risk. 

Pros

• Leverage

  You can control large quantities of silver with a small investment.

• Large profits

  You could win big if the price of silver moves in your favor.

• Flexibility

  You can sell futures contracts before the delivery date.

Cons

• Risky

  Trading futures is speculative, and you can lose it all if the market moves against you.

• Complex

  Trading futures requires a deep understanding of contracts and the market.

• Margin accounts:

  Investors need to fund a margin account, which comes with significant risks if the market moves against you.

Buying method	Best for
Physical silver	Those who want to keep physical silver at home
Silver IRA	Retirement savings and a tax break
Silver ETF	Those who want to invest in silver but not store it
Silver mining stocks	An investment that isn’t tied directly to silver prices
Silver futures	Advanced investors with a high risk tolerance

Is there a best way to buy silver? Our expert’s take

Erin Kinkade

CFP®

Ultimately, it depends on the investor’s goals. For example, if they have a well-diversified investment portfolio, they may want to own physical silver as a hedge. And vice versa: If they own physical silver, they should likely begin to build a diversified investment portfolio. I recommend making your decision based on your goals, the research you’ve done, considering your budget (liquidity needs), and risk tolerance. Ideally, it’s best to consult with a financial professional who can help you decide the best option for you.

How to choose the best way to buy silver for you

The best way to buy silver depends on your goals, risk tolerance, and ability to store precious metals. Start by asking yourself, “Do I want to physically own silver, or do I prefer a more hands-off approach to investing?” 

A silver IRA is the best option if you want tax benefits and long-term savings. 

Do you consider yourself a risk taker? Silver futures offer the potential for the highest return on investment but come with the most risk. If you don’t have the ability to store physical silver but still want exposure, a silver ETF or mining stocks might be a better option. 

In the end, only you can determine what is best for your financial goals, but asking yourself the hard questions can help you pinpoint the best way forward. 

How do I buy silver from a reputable dealer?

Buying silver from a dealer starts with research. Start by researching customer reviews on trusted platforms, such as the Better Business Bureau (BBB) and Trustpilot. Look for dealers that offer transparent pricing online, offer fair premiums over the spot price, and have no hidden fees. 

Once you’ve made a selection, consider the kind of physical silver you would like to own. Physical silver comes in coins, bars, and rounds. After calculating any shipping and storage fees, you can make your purchase. 

Consider purchasing insurance on your silver or storing it in an insured depository for added protection. Reputable dealers will be ready, willing, and able to guide you through the entire process. 

How do I make a silver investment in my IRA?

Investing in a silver IRA starts by opening a self-directed account with a custodian that allows precious metals. Once again, you will want to research and work with a reputable custodian who can handle your purchases and storage. Only approved silver can be added to a precious metal IRA and must be stored in an IRS-approved depository. 

Here are three steps to making a silver investment in your IRA:

1. Choose a custodian: Select a company that specializes in precious metal IRAs to open and manage your account. 
2. Fund your account: Complete the necessary paperwork and fund your account directly or through rollovers from your other retirement accounts. If you are younger than 50, your 2024 maximum contribution limit is $7,000. 
3. Purchase your metals: Once your account is funded, you can work with your custodian to purchase IRS-approved silver. 

How to sell your silver

Experts expect demand for silver to push prices to a near 10-year high, which means you can sell the silver you’ve been holding onto for a profit. You can sell silver in person or online. You will want to work with your custodian to sell your silver if you’ve purchased it through an IRA. 

We recommend researching marketplaces and comparing their buyback prices for the best value. Another option is to find a reputable dealer with transparent processes. Some online dealers offer shipping that securely sends your silver for inspection and a quote. Best practice is to always do your own research before engaging in any transactions.