How to Buy Silver

Investors often look to gold when they want to purchase precious metals, but don’t overlook silver. Less expensive than gold, it presents a more affordable and accessible option and an excellent choice for those with limited funds to invest.

The Silver Institute expects demand for silver in 2024 to reach the second-highest level ever recorded. That could push prices to a 10-year high and lead to silver outperforming gold. If you’re interested in learning how to buy silver, keep reading. We’ll cover all your options and help you determine which is right for you.

What is the best way to buy silver?

The best way to buy silver is subjective. Everyone has their own preference and risk tolerance.

The easiest way to buy silver is through a dealer. This method is simple: Go to a local or online dealer, select the silver you’d like, and pay for it. It’s the same as any other retail transaction.

Silver sold in this way comes in three forms:

1. Coins
2. Bars
3. Rounds

Coins are issued by national mints and marked as legal tender. Examples are silver American Eagles and silver Australian Sea Lion coins. Rounds are made by private mints and may have designs but are not legal tender. Bars may be manufactured by national and private mints.

Regardless of its form, silver should be 99.9% pure to be considered investment grade. Some coins—such as older Morgan silver dollars and Peace dollars—have a lower silver content and are considered collectibles. 

Their value may come more from their rarity than from their silver content, meaning they may not be the best choice for those looking to invest in silver.

Although popular among investors, buying from a dealer isn’t your only option. If you don’t want to store physical silver or are looking for a tax break, you might consider a different method of investing in silver. The table below lists the best options and who should consider each one.

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

How do I buy silver?

Each method of buying silver has its own steps and considerations. Before you settle on a particular investment strategy, explore each option to see which feels right to you.

How to buy physical silver

As we mentioned, buying physical silver is a straightforward process. You don’t typically need to create a special account or file paperwork. Just find the silver you like and buy it. Follow these steps for a smooth transaction:

1. Decide what type of silver to buy: Bars are often the cheapest option per ounce, while coins and rounds can cost more since they may be valuable collectibles.
2. Find a reputable dealer: Whether you’re buying online or locally, be sure you work with a trusted dealer. Read online reviews, check with the Better Business Bureau, and consider prices, fee structure, and shipping costs, if applicable.
3. Select a secure storage option: Once you have your silver, be sure to keep it in a secure location to avoid theft or other loss. Some people prefer to keep their precious metals in a safe in their home. Others may use a safe-deposit box at a bank or store their metals in a vault at a depository.
4. Buy insurance: In most cases, you’ll need to purchase insurance coverage for your silver. It won’t be covered by a typical homeowners insurance policy or insured as a bank deposit. The only time you won’t need to buy insurance is if you use a depository, which usually includes insurance coverage as part of its annual fee.

How to buy silver in an IRA

A silver IRA is an excellent way to save for retirement using precious metals. Depending on how your IRA is set up, you could get a tax deduction for your contributions or tax-free withdrawals in retirement. 

But not just any IRA can hold silver. Instead, you’ll need to follow these steps.

1. Open a self-directed IRA: The IRS only allows self-directed IRAs to hold precious metals and other alternative assets. To open one of these accounts, you’ll need to work with a custodian. Equity Trust and STRATA Trust Company are two popular options.
2. Choose a depository: The IRS also requires silver in an IRA to be held in a depository. Keeping your precious metals at home will result in losing your tax break. Delaware Depository and International Depository Services Group are two examples of precious metals depositories.
3. Buy IRA-approved silver: Only investment-grade silver that is 99.9% pure can be held in an IRA. Once you have found and purchased this silver, have it shipped to the depository.

Many precious metals dealers have IRA specialists who can walk you through these steps and connect you to a custodian to administer your account. Learn more about the process by reading our guide to investing in precious metals for retirement.

How to buy silver ETFs

Even if you don’t want the responsibility of storing physical silver, you can still invest in it. Instead of buying silver yourself, you could purchase shares in a silver exchange-traded fund (ETF).

Silver ETFs are funds that hold physical silver, meaning you can expect their value to go up as the price of silver rises. It’s a simple way to invest in silver without needing to buy and hold the metal yourself.

Here’s how to get started:

1. Open a brokerage account: ETFs are traded like stocks and mutual funds, and you’ll need a brokerage account to make a purchase. Fidelity, Charles Schwab, and Ally Invest offer free accounts for personal investors.
2. Fund the account: Before you can buy a silver ETF, you’ll need to transfer money from your bank account to your brokerage account.
3. Buy shares in a silver ETF: Once your account is funded, you can use the money to buy shares in a silver ETF. ProShares Ultra Silver, iShares Silver Trust, and Physical Silver Shares ETF are silver ETFs.

How to buy silver mining stocks

Another option is to buy shares in silver mining companies. Like a silver ETF, this is an investment strategy that doesn’t require you to purchase or maintain physical silver.

While a silver ETF is a fund that holds physical silver and derives its value from it, silver mining stocks aren’t directly tied to the value of silver. Instead, their share price can be affected by factors such as the mining operations of the company, its overall financial health, and the demand for silver.

MAG Silver, Fortuna Silver Mines, and Pan American Silver Corp are three publicly traded silver mining companies. To buy shares in these companies, follow the same steps as for silver ETFs: Open a brokerage account, fund it, and buy shares.

How to buy silver futures

Silver futures aren’t for everyone, but they are another way to invest in this precious metal. When you buy silver futures, you enter into an agreement to make a purchase of silver at a specific price in the future. If the value of silver exceeds the price at the time of the sale, you’ve made money. Otherwise, you lose money.

One appeal of silver futures is that people can invest by paying a small amount of the contract value upfront, known as a margin deposit. This can make it possible to purchase a large amount of silver futures for less. However, this is by no means risk-free.

Here’s how Charles Schwab describes the risk involved with silver futures: “It involves risks that greater losses can occur with smaller market movements and more than your initial investment can be lost.”

Only someone who fully understands this investment strategy and has a high tolerance for risk and potential financial losses should consider trading silver futures. Talk to an investment professional for guidance in buying and selling futures,

Is silver a good investment?

Silver can be a solid investment, depending on your financial goals. While it won’t produce income in the same way as dividend stocks, silver tends to hold its value in times of high inflation.

Review these pros and cons to see how silver would fit into your investment strategy and decide whether it’s right for you.

Pros

• Hedge against inflation

  One of the most popular reasons to buy silver and other precious metals is as a hedge against inflation. This means they can hold their value when the dollar’s purchasing power weakens. 

• Safe haven

  Some investors worry about economic and geopolitical instability and its effect on currency. Silver is seen as a safe haven because its value isn’t tied to any country’s currency.

• Diversification

  Most financial experts advise people to spread their investments over several assets that may perform differently. Buying silver is an effective way to diversify because the value of precious metals may go up when the stock market goes down. Most experts recommend allocating no more than 10% of your investable assets to one single stock, including silver.

Cons

• Price volatility

  Silver and other precious metals are known for price volatility. Their value can swing up and down in short periods. If you have a low risk tolerance, silver might not be for you.

• Additional costs

  Buying physical silver has additional costs you wouldn’t incur with other investments. For instance, you’ll pay a markup—or premium—to a dealer when you purchase the silver. Plus, it will likely cost you money to store and insure your investment.

• Liquidity

  Turning physical silver into cash is not instant. You need to find a buyer, collect their payment, and exchange the metals, all of which take time.

FAQ

Can you buy silver at a bank?

No, you can’t typically purchase silver at a bank. Most banks no longer offer physical silver for purchase. Instead, visit a precious metals dealer or an online marketplace to purchase silver. Some investment firms also sell silver and other precious metals.

Is it better to buy silver coins or bars?

Whether you should buy silver coins or bars mostly depends on your investment goals. Silver coins can have numismatic value, meaning they might be worth more than their weight in silver due to rarity, condition, or age. On the other hand, silver bars can offer a lower price per ounce, making them a more cost-effective way to build a significant silver holding.

What is the downside of buying silver?

While silver has potential as an investment, it’s important to understand the downsides. Silver does not generate income like stocks or bonds. Its value depends solely on market demand, making it vulnerable to price volatility. Selling silver can sometimes be more complicated than selling other investments due to its physical nature.

How many ounces of silver should I own?

The number of ounces of silver one should own varies, depending on individual financial circumstances and investment goals. Some experts suggest that precious metals, including silver, should make up about 5% to 10% of an investor’s overall portfolio. Consult a financial professional to factor in your risk tolerance and investment objectives.