How to invest in silver: Buying silver for beginners in 2024

By:

Prash Raval

Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.

 & 

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Aug 1, 2024

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Silver is one of the most adaptable commodities. From a store of value to an essential component in electronics, demand for the precious metal continues to grow.

Investing in silver is a simple process and there several ways to put your money into this popular commodity. This beginner’s guide takes you through the basics of how to invest in silver. 

How can I invest in silver?

There are several options available, ranging from investing in silver stocks to buying silver bars or coins. The right approach depends on your personal budget, risk tolerance, and timeline for seeing returns. Here’s a look at the various ways you can invest in silver online.

Buy silver stocks 

Rather than buying silver bars or coins, many investors prefer buying stocks in public companies that are involved in the silver industry. Generally, these companies will be involved in all or part of the silver market, which includes silver mining companies, developers, explorers, producers, and manufacturers. 

Our guide on the best silver stocks to buy includes a selection of the best silver miners and companies you might like to invest in. We’ve also included a few popular silver stocks below. 

• Mag Silver Corp. (NYSE: MAG). A Canadian silver exploration company. 
• First Majestic Silver Corp (TSE: FR). A silver miner with operations in Mexico and the USA. 
• Newmont Corporation (NYSE: NEM). The world’s largest gold miner with significant silver exposure.

Invest in silver ETFs

Exchange traded funds (ETFs) are perhaps the easiest way to invest in silver for beginners. ETFs trade on a stock exchange, just like a regular stock. The key difference is ETFs are made up of many different stocks, rather than just one.

With ETFs you’ll gain broad exposure to the price of silver. The value of the stocks that comprise the ETF will usually rise and fall in line with the value of silver. You can usually use ETFs to create a silver IRA, or to include silver as part of your pension.

Use our guide on the best silver ETFs to find the top options for 2024. We’ve also included a few of the largest exchange traded funds below. 

• Aberdeen Standard Physical Silver Shares ETF (NYSEARCA: SIVR). This ETF invests in physical silver. 
• iShares Silver Trust ETF (NYSEARCA: SLV). The iShares is another ETF that holds physical silver. 
• Invesco DB Silver Fund ETF (NYSEARCA: DBS). This ETF by Invesco is composed of futures contracts

Invest in silver mutual funds

Mutual funds are similar to exchange traded funds, with the main difference being a fund manager actively looks after them. The fund manager maintains the fund and has full control over what to buy and sell. Silver mutual funds are another excellent beginner-friendly way to invest in silver. One thing to note with funds is that the fees are generally higher than you’ll find with other investing methods. 

There are very few mutual funds that focus solely on silver, but there are many that target precious metals. So not only will you be gaining exposure to silver, but you’ll also have gold, platinum and other precious metals. Here are a few of the best silver mutual funds for 2024. 

• Allspring Precious Metals Fund (EKWAX) . This fund invests in companies involved in various sectors and different precious metals. 
• USAA Precious Metals and Minerals Fund (USAGX). As its name suggests, this fund invests in a range of precious metals stocks
• Invesco Gold and Special Minerals Fund (OPGSX). While this fund focuses on gold, it also invests in several well-known silver stocks. 

Buy silver bars or coins

The best way to invest in silver if you want actual physical ownership of the metal is to buy silver bars (bullion) or coins. Investing in silver this way gives you a tangible asset that you can keep entirely outside of the banking system, if you want to.

There are a few different ways of owning physical silver. Here’s a rundown of the types of silver you can buy online:

• Buy silver bars. These are rectangular bullion bars produced by various mints and refineries. Silver bars are sold based on total silver content (purity) and weight, which ranges from 1 gram up to 1 kilogram or 100oz bars. The most popular weights are 10oz and 1kg bars which have the lowest premium over the silver spot price. Silver bars have a fineness of at least .999 pure silver.
• Buy silver coins. Silver coins range from 1 oz to 5 oz in weight and most contain 1 troy oz of .999 fine silver. Silver coins are more expensive than silver bars by weight, but are more widely recognised. There are various types of silver coins to buy and some of the most popular versions include the American Silver Eagle, Canadian Silver Maple, and Austrian Philharmonic.

It’s important to find an established precious metals dealer with a strong track record and competitive pricing if you want to buy silver this way. You should compare premiums over the spot price across various dealers and ensure you have planned for how you’re going to store the silver coins/bars when they arrive.

How to buy silver online – a step-by-step guide

Investing in silver is a simple process, but before you begin, you’ll need to register with a trusted online silver broker. Follow the steps below to learn how to set up an account and invest in silver.

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Why invest in silver

Silver is mainly used as a store of value an inflation hedge, or as a way to invest in exciting new technologies.

One of the top reasons you may want to invest in silver in 2024 is the state of the global economy. Global debt is at an all-time high and many central banks are in crisis mode. Investing in silver is a way to put your money into a tangible asset that’s likely to maintain its value over time.

The growing demand for silver from industrial applications like solar panels, 5G infrastructure, and electric vehicles also bodes well for the metal. Many experts believe industrial appetite for silver will outweigh supply at some point in the future. 

Silver has the potential to offer a hedge against an uncertain future where inflation, industrial demand, and global monetary issues persist. 

Is investing in silver safe?

Silver is typically less risky than traditional investments like stocks, bonds, or currencies, and has been a popular investment for hundreds of years. Stocks are susceptible to wider market downturns, bonds generally offer low yields, and currencies run the risk of devaluation from inflation. 

Silver is protected against these risks and gives investors an avenue for diversification and holds intrinsic value. That being said, silver’s price has been volatile in the past, so when investing, it is important to bear that in mind. Demand for silver is rising from both investors and industrial uses, which may make the asset more volatile in the future.

How much does silver investing cost?

It is relatively inexpensive to invest in silver, although the method you use will determine how much you’ll pay. You may be charged a commission when buying silver stocks or ETFs, typically between $5-$10. You’ll also need to pay a bid-ask spread, approximately 5-10% of your total transaction. 

You may have to pay a management fee when you invest in silver funds. This can vary depending on the fund but is usually around 1% of your investment. For physical silver investing, the costs can be greater and include storage fees and insurance. Both can range between 0.5-1% of the total investment. 

Can I buy physical silver?

Yes, you can buy physical silver and get your hands on an actual silver bar or coin. Physical silver investments typically include minted coins, or bullion bars ranging from small gram-sized to large 1kg bars. 

Physical silver is suited to investors who want an alternative hard asset outside the financial system, as a hedge against inflation or a long term store of value. However, it’s not as practical as investing in silver stocks, ETFs or digital contracts. When you buy physical silver you need to consider storage, security, insurance, assaying, and delivery or shipping.

To buy physical silver, you need to use a bullion broker. These coin dealers offer a simple and secure way to get your hands on physical assets.

How do I store silver bars?

When you buy physical silver one thing you need to consider is how you’ll store it. As its a tangible asset of value, you’ll also need to think about insurance. There are several options available to store silver securely. You can use an online storage service, or keep it at home.

Here’s a look at the various silver storage options. 

Online storage

Most reputable online silver sellers will also offer storage services in a secure vault. Just consider the size of your silver portfolio first: If your total silver investing budget is less than $1,000, a significant chunk of that amount (at least $100 per year) would be spent paying the seller to store the silver for you. 

Online storage is the easiest way to store your silver. The dealer will take care of everything for you and all you have to do is pay a monthly or yearly fee. You’ll probably never even see or hold your silver in your own hands if using a third party silver storage company. 

Home storage

You can also receive home delivery of silver, and then find a secure storage space in your home. Some investors feel better knowing that their silver is always within arm’s length. 

Plus if you plan to hold silver long-term, you only need to invest in a vault once, rather than pay storage fees year after year. The downside is that your risk of theft goes up if you store such valuables in your home. You’ll also need to buy insurance to protect your investment, adding to your total cost.

Besides insurance, you’ll also need to think about where you’ll store your silver in your home. You could buy a safe or vault, although this would add to your costs. It’s important to find a safe place within your home to securely store your silver bars or coins. 

High street brokers

If you want to store your silver somewhere that’s not your home but also prefer not to transact online, visit a local High Street broker to talk to a real, live human face-to-face and explain your storage needs. 

High Street brokers will process your silver purchase, and then take care of storage for you, erasing the hassle and security worries that come with stashing silver in your home. 

Banks

Like high street brokers, you may be able to visit your local bank and purchase and store silver directly with them. Lots of leading banks offer the ability to buy silver bars and also take care of storage and insurance for you. However, this will come at a cost as you’ll have to pay fees to the bank to keep your silver bullion secure. 

Quick answers to key questions

There’s a lot to consider when purchasing silver bars or silver coins. Some of the technical jargon can be confusing if you’re not familiar with how it all works. Use the questions and answers below to learn more about buying silver bars and buying silver coins. 

What is the silver bar premium and silver coin premium?

The silver bar premium and silver coin premium simply refer to the amount paid over the actual silver spot price when buying bars or coins. The silver spot price is the ‘true’ price at which silver trades. When you buy silver bars or coins, you will pay a premium above the spot price. 

For silver coins, premiums range from 10-15% in most market conditions due to the coin fabrication, marketing, and distribution costs incurred by government mints. For large silver bars, premiums can be as low as 3-5% over spot price since the manufacturing and handling costs are lower. Smaller silver bars of 5-10 ounces will have premiums in the 5-10% range.

What weight silver bars should you buy?

The weight of silver bars you should buy depends on your budget. The most cost-effective silver bar weights for regular small investors are generally 5, 10, or 100-troy-ounce sizes. Smaller bars such as the 5 and 10-oz bars offer the best compromise between low premiums and easy storage when compared to large bulk bars. 

You can also consider 100 and 400 oz bars which are still reasonably priced and realistically sized for average investors. One-kilo bars are also a good option and offer an easier resale process. 

What is a silver bar mint or brand?

Silver bullion bars are produced by Government mints like the Royal Canadian Mint and private mints including Sunshine Minting and Johnson Matthey. These established brand names and production standards behind bars from trusted mints help ensure purity, weight, accuracy, and authenticity when buying silver bullion bars or coins. 

How do I determine the purity of silver?

When buying silver bars and buying silver coins they will be stamped with fineness which measures purity. Silver bars and coins have purity ranging from .999 (extremely pure) to .920 (sterling silver). If you buy from a reputable dealer you’ll be provided with authenticity certificates confirming purity. To test yourself, you can use nitric acid or electronic devices. 

How do I measure the weight of silver bars?

Like with fineness, silver bars and silver coins are often stamped with their weight. When using a trusted silver broker you’ll receive authenticity certificates confirming weight. You can always use precision scales in either gram for small bars or troy ounces fro large bars to confirm weight. 

What types of silver bars are available?

There are two main types of silver bars, poured bars and minted bars. Here’s a quick look at each type: 

• Poured silver bars. These types of bars are produced by melting silver and pouring it into moulds in the shape of a bar. This is an older method of producing bars which results in a rugged uneven look. Poured bars often sell at a lower premium however they are harder to authenticate. 
• Minted bars. These days, most silver bars are minted. This process involves using computerised machines to press bars into exact sizes under high pressure. Minting yields standardised, serrated-edged bars with a cleaner more modern look. 

Silver bars come in varying weights although the most common sizes include 5 oz, 10 oz, kilo bars, 50 oz, and 100 oz bars. 

What types of silver coins are available?

Silver coins come in all shapes and sizes, although there are a few common versions which we’ve explained below:

• American Silver Eagles. These types of coins are the most common and popular and have a Walking Liberty design. They can be used as legal tender with a .999 fineness purity and have the lowest premiums. 
• Canadian Silver Maple Leafs. These Canadian silver coins bear Canada’s iconic maple leaf on the reverse. They are legal tender with a $5 denomination. One coin coins 1 oz of .9999 fine silver. They also have security measures to deter counterfeiting. 
• Austrian Philharmonics. The Austrian Philharmonics silver coins depict the Vienna Philharmonic orchestra. They are legal tender for €1.50 and coin 1 oz of .999 silver. 

There are several other types of silver coins including Chinese Silver Pandas, Australian Silver Kangaroos, and the Mexican Silver Libertads. 

Bottom line

Investing in silver is an inexpensive way to add precious metals to your investment portfolio. Known as gold’s cousin, many experts expect silver to rise in value over the coming years, so investing now could be a prudent move. With the various investment vehicles available, investing in silver is accessible to all levels of investors. 

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