This article will help you decide what type of silver bar to buy. You’ll learn everything you need to know when buying silver bars including:
- When to choose silver bars over silver coins
- What size silver bar to buy
- Pros and cons of different silver bar sizes
- What’s the most commonly purchased silver bar size
- Different brands of silver bars
- Cast bars vs minted bars
- When are silver coins not more expensive than silver bars
So after looking at all the reasons as to why to buy silver, you’ve come to the conclusion now is the time to buy. You’ve also determined what percentage of gold and silver you should have in your portfolio.
Why Buy Silver Bars?
There are 2 key reasons to consider choosing silver bars over silver coins.
1. Silver Bars Are Cheaper Than Silver Coins
Silver coins take more time and effort to produce in comparison to silver bars. Most silver bars are poured or cast, which while labour intensive, is still cheaper to produce than minting or striking a coin.
It is for this reason that silver bars generally have a lower premium or mark up above the spot price of silver.
This difference in markup between coins and bars is even more noticeable in silver compared to gold.
Because gold is commonly bought in a 1 ounce size. So the differential between a 1 ounce gold coin and a 1 ounce gold bar is not so great. Maybe around 3-4%.
However silver is currently just over 80 times cheaper per ounce than gold. So to buy the equivalent of a 1 ounce gold coin would require just over 80 silver coins.
But now let’s compare buying 100 x 1 ounce silver coins with a single 100 ounce silver bar:
100 x 1 ounce silver maple coins = $2780
100 ounce silver bar = $2460
So bars are clearly less expensive to buy than coins. Or put another way, for the same amount of money spent you will get more silver when buying bars over coins.
2. Silver Bars Are Easier and Cheaper to Store than Silver Coins
The second major advantage of silver bars is that they are easier, and if buying a lot of silver, cheaper to store than silver coins.
Because the shape of the coins, along with the packaging means silver coins take up more volume than the equivalent weight of silver in bars.
Therefore more space equates to higher cost to store if paying for silver storage.
But there are also reasons some people choose to own some coins as well. To learn more about choosing between silver bars and silver coins see: NZ Gold Coins (and Silver Coins) or NZ Gold Bars (and Silver Bars): Which Should I Buy?
What Size Silver Bar Should I Buy?
So now that you’ve decided to buy silver bars, the next decision to make is what size silver buy should you buy?
The short answer is that the largest bar offers the smallest premium. This is generally true as a similar amount of work goes into pouring a bar regardless of its size. So the net cost of fabricating a large bar is quite similar to producing a small bar.
However the answer is not necessarily as simple as bigger is better.
Pros and Cons of Different Silver Bar Sizes
While a 1000 oz silver bar is the cheapest way of buying silver. It is not necessarily the best option for everyone. The premium above the spot price is certainly the lowest.
However large bar sizes can have their downsides. Unless you are buying 1000’s and 1000’s of ounces of silver a 1000 oz bar may not be the best option.
Divisibility – You can’t easily divide a larger bar into smaller pieces and sell them off separately. Whereas if you instead buy a number of 100 oz silver bars or the slightly smaller 1 kg silver bars, these are easily sold off in tranches.
Ease of Resale – Your options may be limited when the time comes to sell with 1000 oz bars as there will be less potential buyers than with small bars. It may only be precious metal refiners who will buy the 1000oz bar from you. As less people can afford to buy 1000 oz silver bars.
Assaying – When you sell your 1000 oz silver bars you may also be required to have them assayed to confirm their purity. So this will make for a slower sale and will also add an extra cost.
What Weight Silver Bar is Best?
How much you are spending overall on silver is a big consideration in deciding the size and weight of silver bar you purchase.
Are you buying a hundred ounces? Then 10 oz silver bars may be a good purchase.
Whereas if you’ve buying a few thousand ounces, the 100 oz silver bars or 1 kg bars may be a good option.
(Note: 100 troy ounces = 3.11035 kilograms)
What is the Most Common Silver Bar Size That is Bought?
The most common silver bar we sell is the 1kg silver bar.
Most likely because 1 kg provides the best combination of divisibility with a lower premium.
You may want to add some 10 oz bars for further divisibility.
Many people also like some silver coins as the ultimate form of financial insurance. See: What Use Will Silver Coins be in New Zealand in a Currency Collapse?
Different Brands of Silver Bars
There is a huge range of available brands to select from when choosing silver bars.
These include locally refined New Zealand brands, as well as overseas brands such as:
You should consider the pros and cons of buying locally refined silver bars versus overseas produced or imported silver bars. To learn more about this see: PAMP Suisse Gold / Silver vs Local NZ Gold / Silver: Which should I buy?
The above brands are all well known and trusted globally. So buying any of these from an established dealer should mean you won’t go too far wrong. But regardless of what silver bar you choose, there are a few things you should expect to see on it:
- The refiners hallmark should be cast or stamped into the silver bar.
- Also clearly visible should be the purity of the bar. Generally this will be 999 purity or 99.9% pure.
- Finally the weight in either grams, ounces, or kilograms should be stamped into each bar.
Some brands and sizes may also be cast or minted with a unique serial number and ship with certification. Generally you will also pay more for these types of bars.
No GST on Silver Over 99.9% Pure
Silver bars and coins that are less than 99.9% pure fine silver attract GST in New Zealand. However this point is generally not of concern when buying silver bars as almost all are 999 or 99.9% pure.
Cast Bars vs Minted Bars
What is a Silver Cast Bar?
A cast bar simply means the silver has been melted and then poured into a cast or mould. This cast will have the refiners hallmark stamped into it along with the weight and purity. A cast bar may also be referred to as a moulded bar, poured bar or a silver ingot. The word ingot and bar are often used interchangeably.
What is a Silver Minted Bar?
Whereas a minted bar is produced in a similar way to a coin. There are multiple steps involved. There is still a casting process to produce a bar of a certain size. But then the bar is fabricated via a striking process. A machine strikes the bar – effectively stamping it with a design much like a coin is. As these is more “work” required to produce
Minted silver bars are most commonly manufactured in 1 ounce weight. So these are significantly more expensive than larger bar sizes. So they are not a popular purchase. Investors generally go for 1 oz coins instead as these are usually cheaper than 1 oz minted silver bars.
When Are Silver Coins Not More Expensive Than Silver Bars?
As explained already silver bars are generally much cheaper to purchase than an equivalent weight of silver coins.
These are minted coins so require more work to fabricate than an equivalent size cast bar. However as they are 1 kilogram (32.15 ounces) instead of the usual 1 oz coin size, this difference is not so great. But they do have a very attractive finish and many people find them more aesthetically pleasing that a plain silver bar.
Currently we have a very limited number of these 2018 1 kilogram coins which are priced very close to the same as silver bars. These unique and attractive 1 Kg Coins come in a protective plastic capsule.
Large format coins such as these can add some uniqueness to your silver bullion collection. While spending hardly any more than on a 1 kg silver bar.
Or check out the full range of silver bars available today: Buy silver bars.
Editors Note: This article was first published on 26 June 2018. Updated 30 October 2018 to include new links to various products and updated price comparisons.