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Updated 12:48 28/02/21

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How to invest in silver bullion


Silver Bar

There are a variety of ways to invest in silver, and it can often be difficult to know which is the best option for you. A lot will depend on your budget and your motivations for investing in bullion. Below we explore some of the different methods available, so that you can make the best decision to suit your budget and needs.

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Silver bars

One popular form of investing is the purchase of physical bars of fine bullion silver. Buying silver bars allows you to own a great amount of precious metal in a relatively small, compact unit which can then be stored safely and discreetly at home or in a secure storage unit. Given the lower manufacturing costs, silver bars will usually be available at lower premiums than coins, and are therefore a more cost-efficient investment.

Our silver bullion bars are all manufactured by world renowned, LBMA-approved refiners such as PAMP, Scottsdale, and Umicore. Click here to see our range of silver bullion bars.

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Silver coins

Silver coins are another extremely popular way of investing in physical bullion. Governments, mints and central banks across the globe issue silver bullion coins, often defined as legal tender, that attract attention from investors and numismatists alike. Popular coins stocked by BullionByPost include Silver Britannias, Canadian Silver Maples, American Silver Eagles, and Silver Chinese Pandas.

Although the premiums on silver coins tend to be Silver Coins higher than bars, there is a potential benefit to owning a coin that is recognised internationally, and backed by a specific government or central bank. In times of need, it may be easier to find someone willing to buy a silver Britannia from you, for example, than a bar that may not be easily verifiable to the untrained eye. Due to their intricate detail, a coin is more difficult to forge than a bar. Rare or particularly interesting coins may also attract increased demand from coin collectors. This can sometimes result in coins being sold for far higher prices than their bullion value.

Certain silver coins also offer a tax efficiency that is impossible to achieve by investing in bars. Silver Britannias are considered legal tender in Great Britain and are therefore exempt from capital gains tax (CGT), the tax to be paid on any profit made from the sale of assets.

This means that if two individuals, one with £100,000 of silver Britannias and one with £100,000 in silver bars, were to sell their silver assets for identical profits, the former would pay nothing in tax, while at least 10% of the latter’s profit might be paid to the government as CGT.

Click here to see our range of silver bullion coins.

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Unallocated silver

Unallocated bullion investments differ to those mentioned above as, although they refer to bullion that does exist somewhere, the investor is not the owner of a specific piece of metal. An unallocated investment is more like an agreement that the investor’s money is secured by the bank or dealers bullion reserves. Although this is more secure than theoretical bullion assets such as ETFs, they do not offer the same security as being in possession and control of your physical bullion assets. The bullion would most likely make up the institution’s liquid reserves and so, in the unfortunate event of a liquidity crisis, it would be sold off in order to compensate the bank or organisation’s creditors. This means that investors are unlikely to recuperate the entire value of their initial investment and does not represent the level of security that investors in precious metals are usually looking for.

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Silver ETFs

There are also some silver investment vehicles that don’t involve physical metal at all, be it allocated or unallocated. Exchange-traded silver products, such as silver ETFs, are designed in order to allow investors to benefit from the fluctuations in the silver price without ever actually owning any silver. While this is more convenient and usually cheaper than allocated silver, given the lower premiums and storage issues, it doesn’t offer the same benefits as investments in physical bullion. If most bullion investors are looking for a safe-haven or an asset that will maintain its value, it makes little sense to store your money in assets that have effectively no intrinsic value.

Despite being based on the bullion price, a silver ETF is similar to shares or derivative investments in that it is little more than an acknowledgement of debt, rather than a tangible asset with intrinsic value. Similar to unallocated bullion, in any situation where the fund went bankrupt, an investor in ETFs is unlikely to recuperate anything near their initial outlay. For investors seeking an investment that can never totally depreciate, with the potential to soar in the future, we believe there is only one way to invest in silver.

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The main reason people tend to invest in precious metals is their ability to defy inflation or economic crisis. We would therefore always recommend the only method of investment that guarantees you will be able to benefit from this unique characteristic - by purchasing physical metal and keeping it under your control.
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Silver Britannia

Awaiting Stock

from £30.84

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Canadian Maple

Awaiting Stock

from £29.64

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1oz Silver Bars

Awaiting Stock

from £29.04

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1 Kilo Silver Bars

In Stock

from £881.52

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