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All You Need To Know About Investing In Silver Coins For The Long Term

Olga Robert

Investing in precious metals and stones will not go out of fashion. While gold purchases usually take the limelight for its high value and shiny exterior, for those who want to start small with setting aside some assets in the form of precious metals for the future, you should consider silver.

The white metal, that is much cheaper than gold, has proven to give higher returns to its investors in the recent past, thanks to the falling affordability of the yellow metal.

Potential for solid gains

It has been observed that silver prices often reflect the gains seen in gold. On Friday, that is the occasion of Dhanteras, gold futures closed at Rs 38,269 per 10 grams, which is 20.3 percent higher than the price of Rs 31,800 seen on the same auspicious occasion a year ago.

Dhanteras in the year 2018 was on 5 November.

If you were to compare silver prices, the movement is almost exact. Silver futures on MCX closed 19.8 percent higher at Rs 46,306/kg as against the rate of Rs 38,650/kg seen on 5 November 2018.

Further, if an investor who purchased these precious metals on 5 November 2018 had sold them in the first week of September, when prices had touched new highs in India, he/she would have made solid returns of 25.4 percent and 33.2 percent, on gold and silver, respectively. The spike in silver price was much higher than gold.

On 3 September, gold had touched a high of Rs 39,885/10 grams and silver was priced at Rs 51,489/kg, pushed higher by the then prevailing US-China trade tensions.

Why should you buy silver coins?

If your intention is to purchase precious metals for investment purposes and not to wear them, silver coins are ideal as you do not have to worry of losing money on making charges or buy in bigger quantities. You can start with as little as one gram and probably use the accumulated quantity in the future to turn it into jewellery, if needed.

Where to buy silver coins?

Be it gold or silver, always buy from certified and reputed sellers. You have the option to buy from:

1. Online stores
There are multiple online retailers that sell silver coins from branded jewellers. These come with specific imprints (artwork) and dimensions to choose from and sometimes even provide discounts on purchases. However, the items sold on these websites are usually priced at premium rates.

If you purchase coins with specific designs on them, the rates will be higher.

2. Banks

Most reputed banks allow customers to buy silver coins directly from them. The silver coins or bars sold by them are certified and can be bought at preferable weights.

Processing charges may be imposed if bought in large quantities. Prices will set on current rates and you may have to pay some small amount of premium for the certificate and/or artwork.

3. Local jewellers

You can purchase silver from your local jeweller but check for the quality of the metal, which can be confirmed from the Hallmark symbol. The advantage of visiting a local jeweller over banks or online stores is that you also have the option to sell some quantity of accumulated old silver than you may own. You could also go to them to use your accumulated silver to make jewellery or purchase gold for the same value.

Silver is popularly used in India for religious and traditional rituals. Silver items associated with these rituals can generally be only found in local jewellery stores.

Things to note when you purchase silver

  • Check for BIS logo, purity grade/fineness, Hallmarking centre's identification number and jeweller's identification number.
  • Grade 9999, 9995, 9999 in BIS is considered as fine silver. Unlike gold, fine silver can be bought in form of utensils as well.
  • Ask for buyback options and conditions if you decide to purchase from a local jeweller.
  • Make sure you are purchasing German silver, which is just any metal with silver polish. It is not hallmarked either.
  • Get the receipt as proof of purchase and make sure it specifies all the charges, weight of the article and purity.

Also Read:

Gold Prices In India Ease On Global Cues

Gold, Silver Prices In India Rise Despite Weak Global Trend

8 Questions To Ask Yourself Before Making An Investment