Junk Silver: A Smart Investment Strategy

Junk silver is a term used by investors to describe circulated coins that have value derived only from their silver content. These coins, often minted with a significant silver content, have now found a new purpose among collectors and investors. Junk silver primarily refers to a specific category of coins that were once everyday currency and now have limited investment and numismatic value. Their true worth lies in the scrap metal realm, often containing 90% or less pure silver content.

The appeal of buying and selling junk silver lies in its practical value, affordability, and suitability for some investors and collectors. It offers an accessible and tangible way of gaining exposure to the silver market. Junk silver is a good hedge against inflation, which we are now experiencing in almost every area, especially at the supermarket.

One of the forces that will make silver's price rise is that silver is in demand because it has a multitude of industrial and consumer uses. Silver conducts heat and electricity better than any other metal. Because of this, it’s used in the production of computers, cell phones, monitors, chips, automobiles, etc. Silver is also valuable for use in the purification of water and air, and it’s got antibacterial properties.

If you’re going to put money in bullion, make it separate from the junk silver coins that you can be sure are going to be spendable, if and when the world goes to pot.

Where to buy junk silver

When it comes to buying junk silver, there are several options available to investors. Online marketplaces such as eBay, APMEX, and Provident Metals offer a wide selection of junk silver products. eBay, for instance, provides a vast array of junk silver options, ranging from small to large quantities, and includes information on seller credibility, which is crucial for investors looking to make a profit. Provident Metals, on the other hand, specialises in junk silver and offers some of the lowest prices in the market.

For those who prefer traditional methods, local coin dealers, auctions, estate sales, and even pawn shops can be good sources of junk silver. Additionally, online bullion dealers like JM Bullion, SD Bullion, and Money Metals Exchange provide investors with opportunities to purchase junk silver directly.

When buying junk silver, it is important to remember that the value of these coins is primarily based on their silver content rather than their face value. Therefore, when purchasing, it is advisable to focus on coins with higher silver content, such as those minted before 1965 in the United States, which tend to have 90% silver composition.

How to identify junk silver

Junk silver refers to old US currency coins whose value is based on their silver bullion content rather than their condition or collectibility. These are 90% silver coins minted by the US Government pre-1965, including half dollars, quarters, and dimes.

• Check the date: All US dimes, quarters, half dollars, and silver dollars minted in 1964 or earlier contain 90% silver.
• Look for specific coins: The following coins are commonly found among junk silver: Roosevelt dimes, Washington quarters, Walking Liberty half dollars, Franklin half dollars, and Kennedy half dollars.
• Identify "War Nickels": Nickels minted during World War II (1942-1945) are known as "war nickels" and contain 35% silver. They can be identified by a large "P, D, or S" above Monticello on the reverse.
• Check for Canadian silver: Canadian silver junk coins refer to pre-1968 coins minted by the Royal Canadian Mint. These include Canadian silver dimes, quarters, and half dollars dated before 1968.
• Use online tools: There are online utilities and mobile phone applications that can help identify junk silver coins, such as those that determine the silver content of a coin or provide current melt values.
• Consult coin dealers: Coin dealers and bullion brokers are knowledgeable about junk silver and can help identify and appraise such coins.

Junk silver vs. silver bullion

"Junk silver" is a misleading term for old silver coins that circulated before 1965 in the US and 1967 in Canada. These coins are 90% silver and 10% copper, giving them intrinsic value beyond their face value. Despite their name, junk silver coins are valuable investments due to their silver content. They are also easily recognisable, historically significant, and often have beautiful designs.

Silver bullion, on the other hand, is highly concentrated silver that is 99.9% pure. It is produced specifically for investing and is available in bars, coins, and rounds. Bullion is easily converted to cash and is highly liquid, making it a good choice for investors who want to quickly buy and sell.

One advantage of junk silver is its lower purchase premiums compared to bullion. This is because extracting silver from the coins to produce bullion requires significant time and effort. Additionally, junk silver coins are easily identifiable and have long-term viability due to their rarity.

However, bullion is favoured by many investors due to its high purity and ease of buying and selling. Bullion is also produced by reputable companies and often includes security features to prevent counterfeiting.

Ultimately, the choice between junk silver and bullion depends on your investment goals and preferences. Both options have their advantages and can be valuable additions to your investment portfolio.

Junk silver vs. other investments

Junk silver is a term used by investors to describe American coins that circulated before 1965. These coins, which are 90% silver, are bought and sold in bulk due to their silver content. Junk silver is a popular investment tool for silver stackers as it is a cheap way to invest in silver.

Junk Silver vs. Other Silver Investments

Junk Silver vs. Silver Bullion Bars

Junk silver coins are sold at a premium or below premiums on 100-oz silver bullion bars and 1-oz silver rounds. The choice between the two is a matter of the investor's goals and resources. Junk silver has greater upside price potential than .999 fine silver bullion products. However, .999 fine bullion items can be produced at any time, so there are limits to how high the premiums can go.

Junk Silver vs. Silver Coins

Most junk silver coins have no collectible value and are sold with little premium over spot. Silver coins, on the other hand, hold value as collectibles and may be easier to liquidate to other collectors. Junk silver coins are easy to store, simple to assess, and contain intrinsic monetary value because of their silver content.

Advantages of Junk Silver

Junk silver has three main benefits: affordability and accessibility, divisibility and versatility, and potential for barter and trade.

#### Affordability and Accessibility

Junk silver coins are a great way to invest in high quantities of silver without spending too much money. They are extremely common and nearly every major mint and distributor sells them.

#### Divisibility and Versatility

With a bag of junk silver, you know exactly how much silver is in each coin (90%). This makes junk silver highly divisible and perfect for investors who want to sell their silver in smaller, manageable chunks. Junk silver can also be used as a currency, traded for other products, or sold to fund higher-end silver and gold investments.

#### Potential for Barter and Trade

90% silver junk coins are legal tender. Investors can bundle their junk silver and trade it for valuable items with other traders. It is also worth noting that trading different types of junk silver coins can help new traders make a quick profit.

How to store junk silver

When storing junk silver, there are several factors to consider, such as accessibility, security, environmental conditions, and cost. Here are some detailed instructions on how to store your junk silver:

Choose the Right Containers

Select storage containers that are airtight and made of inert materials such as plastic or glass. Avoid using materials like cardboard, newspaper, tissue paper, or rubber bands, as they may contain sulfur and other substances that can tarnish your silver. Plastic tubes, glass jars, and coin folders are all good options. If you use plastic, ensure it is not made of PVC, as this type of plastic is too soft and may not offer sufficient protection.

Maintain Ideal Environmental Conditions

Keep your junk silver in a cool, dry, and dark location. Moisture and extreme temperatures can damage your coins, so avoid storing them in the basement, attic, or bathroom. Protect your coins from light and UV rays, as they can cause spots and discolouration over time. Consider installing a UV filter on your windows if your coins are stored near a light source.

Ensure Safety and Security

Store your junk silver in a secure location, such as a safe or a deposit box. A safe will help protect your silver from theft, but ensure it is sturdy, waterproof, and fireproof. Install the safe in an out-of-the-way spot that is not easily accessible to potential thieves. Alternatively, you can rent a safety deposit box at a bank, which offers excellent security. However, keep in mind that access to your silver will be limited to the bank's operating hours.

Consider Other Storage Options

If you have a large collection, you may want to consider a third-party storage facility or depository. These facilities are specialised in protecting precious metals and typically offer insurance coverage. Another option is to store your junk silver in multiple places, such as a nightstand or dresser drawer for easy access, and a hidden location in your house for added security.

Frequently asked questions