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Kyle Jernigan - January 26th, 2022
What Are Silver Rounds? An Introductory Guide
Since the time humans placed value on goods, society has undergone several transitional periods. However, it's precious metals like silver that have held their place.
Even throughout tumultuous times like the Coinage Act of 1873 and the rise of cryptocurrency, silver is still highly regarded and viewed as a safe haven investment.
From your grandmother's silver collection to bars and coins, silver comes in many recognizable forms. However, it's important to understand how the varying types can affect your investment portfolio.
For example, while US-minted silver coins are legal tender, silver rounds are not. But what are silver rounds?
What Are Silver Rounds?
Silver rounds are amazingly similar to silver coins at first glance. They're flat oval-shaped pieces of silver that are typically issued by private mints.
The actual size of each round varies wildly and depends on the issuing private mint. Generally, silver rounds also demand a lower premium than silver coins of the same size.
That's because silver coins have a purity guarantee backed by the government. They are also legal tender and incorporate rarity into their overall value.
Although private mints can't guarantee the purity of a silver round, there's no need to let that turn you away. More often than not, private mint silver rounds are just as good as silver coins minted by the US government.
Old Silver Rounds, some current and some from the 80's. Photo Credit: Photo taken at one of the East Coast depositories owned and operated by Investor Crate, LLC.
Silver Rounds vs. Silver Coins
Silver Rounds
When purchasing silver, you can find varying types of bullion. Unless you want to pay a below-market premium for junk silver, most high-quality products come as silver rounds, coins or bars. There are a few benefits to silver rounds, one of which is the plethora of design options.
While the most common is the Silver Buffalo or American Silver Eagle, you can find a matching silver round to commemorate a person, place or event.
There are a couple of reasons why there are so many designs to choose from. One is because rounds aren't legal tender. Therefore, private mints can produce a limitless amount without accidentally destroying the economy.
Secondly, silver rounds demand a lower premium. That makes them a much more affordable option for the average consumer than silver coins or bars.
However, the benefits come at a cost. Because they're not legal tender and are produced by private mints, rounds aren't backed by the government. They also have a lower resale value due to the lower premium.
Additionally, their wide availability and the ever-increasing list of designs remove rarity and bartering value. Although there's a lack of face value and government backing, silver rounds are excellent for collectors following a specific theme.
They also have the benefit of avoiding high markups found with silver coins.
Silver Coins
The second type of bullion is a silver coin. These use the most traditional designs and have several characteristics that define them.
For example, modern-day silver coins must be at least 99.99% pure and weigh one troy ounce or 31.10 ounces.
The standard for modern silver coins simplifies the math. If you're ever curious about the value of your silver, simply count the number of coins and multiply it by the spot price.
But it pays to remember that silver coins may be more valuable than what the market is willing to pay.
Silver coins carry a face value, but it's mostly symbolic and much less than the actual spot value of silver. In fact, they typically cost more than comparable bars or rounds.
That's because they have a command a collectible and rarity value not found in the other types. Silver coins also have seigniorage charges. A seigniorage charge is an amount equal to the difference between the face value and the cost to mint the coin.
At the end of the day, the sovereign mints need to fund their operation, and one method is to charge over the value of the coin and production costs.
Avoiding Silver Round Scams
As mentioned earlier, silver rounds aren't legal tender and hold no value as a form of currency. Because they come from private mints, the actual value largely depends on the dealer's reputation, size and purity.
Differentiating between a silver round and a coin can confuse some people new to the precious metals industry. Even well-seasoned veterans can be fooled if a silver round is masterfully forged.
To avoid paying a silver coin price for a silver round, the features to look for are denominations and a COPY stamp. However, to ensure you get what you pay for, it's always best to purchase your silver from a reputable seller.
Putting in a little legwork now can potentially save you hundreds or even thousands of dollars in regret at a later time. In the business world, professional affiliations matter. And the precious metals industry is no exception.
Ideally, you'd want to go with a dealer that's affiliated with at least one of the following organizations:
- • Professional Coin Grading Service
- • National Coin & Bullion Association
- • National Inflation Association
- • Numismatic Guaranty Corporation
When buying something expensive like precious metals, the last thing you want is to have a horrible customer experience. While most may glance over this, poor customer etiquette can seep into other aspects of your silver round purchase and may even be a red flag.
It can lead to an array of problems like hasty, unethical purchases and even ending up with an entirely different product.
Generally, the best silver dealers offer supreme customer service and have satisfaction guarantees and fair return policies. It says a lot about the quality of a dealer when they stand by their product.
A pile of Silver Bars which are in the same "Generic Silver" or non-government category as rounds. This photo is to illustrate the major private mints that make bars also make much of the rounds in circulation. Photo Credit: Investor Crate Facility West.
Buying Silver Rounds
Thank you for taking the time to read our article! If you want to get your hands on some Silver Rounds of your own or need some help buying silver, feel free to reach out!
Get in touch with Investor Crate to add the perfect type of bullion to your portfolio and check out our "Generic Silver Crate," which is a Silver Round subscription. The easiest way to keep a steady flow of Silver to your door, every month.
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Interesting breakdown of the pros and cons
There’s so many themes to there. Absolutely love em. Really makes investing fun.
New to silver rounds, less comfortable buying them as they are less regulated
I did not know a lot about silver rounds. Now, I do! Thanks!
the markets play a huge part in value