Whether you collect silver coins for the precious metal they contain, or for their unique designs, there are many different types of silver coins to collect. From a newly-minted Australian Silver Kangaroo to a 1920 U.S. dime, silver coins exist in many forms.
Numismatic vs. Bullion
Most collectors aim to maximize either the numismatic value or precious metal value of their collection. Some coins are designed to contain a high quantity of pure silver, while other are valued more by collectors of rare coins. Some of the many types of silver coins that exist include silver bullion coins, U.S. coinage called “junk silver,” graded silver coins, and proof silver coins.
Silver bullion coins are coins that contain a high percentage of pure silver, typically either 99.9% or 99.99%. Examples include the American Silver Eagle, the Canadian Maple Leaf, and the Australian Silver Kangaroo. These coins have been produced primarily for collectors, although they do have a symbolic face value and are considered to be legal tender.
Other coins contain silver, but were minted for use in circulation. Many U.S. coins minted prior to 1965 contain up to 90% silver. These include the Morgan and Peace silver dollars and the Kennedy half dollar, as well as early nickels, dimes, and quarters. If the coin is too worn to be valued by coin collectors, it is considered “junk silver,” and is collected for its silver content.
Coins in very good physical condition may be graded to attest to their authenticity and condition. Almost any silver coin can be graded by a grading company, whether it is a silver bullion coin produced for collectors or a silver coin intended for circulation. Graded silver coins carry numismatic value above and beyond the price of the silver they contain.
A professionally graded coin has been assigned a number between 1 and 70 to signify the physical condition of the coin, with higher numbers assigned to coins with little to no wear. High-grade silver coins command a higher price than their non-graded counterparts.
Another type of silver coin prized by both coin collectors and precious metal investors is a proof silver coin. Proof coins are among the highest quality coins, renowned for their craftsmanship and level of detail. These are coins – either silver bullion or intended for circulation – which are minted using a special process that ensures a high quality strike.
They usually contain the same amount of silver as their non-proof counterparts, but the special minting process produces a coin that is valued for its appearance. Due to their beauty and rarity, these limited-strike coins are highly collectible, and command a premium over their non-proof (or “business strike”) counterparts.
When collecting silver coins, one aspect many precious metal investors focus on is the premium. This is the price paid for the coin, above and beyond the current spot price of the silver it contains. The premium varies widely depending on the coin, its physical condition, where it is purchased, and other factors.
Usually, the lowest premiums are found when buying junk silver coinage or silver bullion coins. The highest premiums are found when buying coins that are valued by coin collectors, such as graded silver coins and proof silver coins.