One of the first decisions investors make when buying Silver Bullion is whether to go with a “round” or a “coin”. But, what are those in the first place?
Is there is difference?
Yes indeed, there’s a key difference.
A silver coin, such as 1 oz American Silver Eagles, contain a minimum of one troy ounce of .999 fine silver. Being a silver coin, by definition, the American Silver Eagle is minted by a government.
It is specifically minted by the U.S. Mint.
That’s why we call them “coins”.
Coins are produced and guaranteed by government mints.
“Rounds”, on the other hand, typically still contain one ounce of .999 fine silver bullion (although there are fractional smaller versions available). For example the 1 oz SD Bullion Freedom Round, but silver rounds are all technically minted by private or even publicly traded businesses, not governments.
The SD Bullion Freedom Round is minted not by the U.S. Mint, but by Silvertowne Mint.
A round is not a coin by bullion industry vernacular.
A coin is an officially minted product from a sovereign government mint, whereas anybody in theory can design and begin producing their own silver rounds.
Silver Legal Tender?
Here’s the biggest difference between silver coins vs rounds: Coins, in most cases, are explicit legal tender and carry a stamped legal tender face value on the coin itself.
Don’t get confused… low legal tender face values have nothing to do with their real market price for the silver bullion content, supply demand fundamentals.
For example, a 5 oz America The Beautiful coin contains a legal tender face value of a quarter dollar or 25¢. No one in their right mind is trading them for cupronickel quarter change.
The government determines what is legal tender, and only governments can print a face value on their coins. Any citizens who test this fact typically end up in prison.
This is why the SD Bullion Freedom Round or any other Silver Round does not have a face value. It is not a coin.
Now, some coins, such as the Mexican Silver Libertad coins, do not contain a legal tender face value in Mexican pesos even though they are legal tender coins guaranteed by the Mexican government.
By and large, however, silver coins contain legal tender face values:
- The Austrian Silver Philharmonic has a face value of 1.5 euros.
- The Canadian Silver Maple Leaf has a face value of 5 Canadian dollars.
- The Australian Silver Kangaroo has a face value of 1 Australian dollar.
Silver Purity (.999 Silver vs .9999)
When it comes to purity, that can vary from business to business or by country to country, and the most common purities are .999 (3 nines) or .9999 (4 nines).
Having a forth 9 of silver purity may mean it is indeed more pure than its 3 nine competitors. But use a calculator.
Having a 4th nine of purity, is basically a 1.4¢ marketing gimmick based on melt values of a $16 oz silver spot price.
The 4th nine of silver purity has little to do between which silver coin yields more of a bid price when you go to sell.
Silver Sizes (1 oz and larger / smaller sizes)
When it comes to silver weights, that can also vary from business to business and from country to country.
There is a wide variety of what we call “fractional silver rounds”, meaning they come in common weights such as 1/10 oz, 1/4 oz, and 1/2 ounce.
The silver Queen’s Beasts series coins, from Great Britain, come in a weights of 2 ounces and 10 ounces.
Finally, there has been recent collaboration where sovereign nations contract with businesses to allow the release of an official “coin”, even though it is minted by a business. In this instance, the product is still considered a coin, because it is dictated to be privately minted, under the authority of the issuing nation.
An example of this is the SD Bullion exclusive 1 oz Silver Tree of Life coin. A one ounce, .9999 fine silver coin, issued and guaranteed by the island nation of Niue yet minted under contract with Republic Metals Mint, a business located in the United States.
As an official coin, the Tree of life features a face value of $2 (New Zealand dollars, the official currency of Niue).
What do investors prefer?
That’s a matter of personal choice.
Generally speaking, coins have higher premiums or overall prices than silver rounds.
Said differently, silver bullion rounds are often cheaper than official government silver bullion coins.
Which is better?
That is a matter of opinion.
Both coins and rounds, depending where they are minted, can be made with the highest standards of manufacturing, as well as contain advanced security features.
Should I get a coin or a round?
That is a personal choice that we all have to ask ourselves.
More Silver Bullion for Your Fiat
Is the goal to buy as many ounces as possible for as little money?
Then the choice would be silver rounds.
Silver Premium Potential
Is the goal to purchase an official sovereign coin which might appreciate in collectibility value?
For example, the 1996 American Silver Eagle coin sells for a much higher premium than any other year because of its low mintage population.
How have the product’s premiums reacted during silver bullion shortages? American Silver Eagles performed very well during the 2008 Global Financial Crisis (better than all major silver bullion product competitors in fact).
Silver Selling Privacy Concerns
Is selling privacy on 1,000 oz or more lots important to you?
See current IRS 1099B specifications if you’re confused.
If privacy on large silver bullion sales to bullion dealers is important to you perhaps buy silver coins over silver rounds (or silver bullion bars as they are treated the same in privacy terms).
The bottom line is to do the research first, and make an informed decision on what to purchase.
There are many choices in the silver bullion market, and there is no “one size fits all”. Luckily silver bullion product choices are highly variant and mixed at the moment.
I like a mix of silver coins and silver rounds, because there are times when I just want as much silver as my money can buy, and there are also times when I like a particular coin produced by a sovereign nation, such as the much hyped South African Silver Krugerrand coin.
There are also times when I choose to buy a coin because I think it might offer collector’s appeal in the future, such as the 2018 Australian Year of the Dog silver coin.
In the end, one ounce of .999 fine silver is still one ounce of .999 fine silver.
Comment below on why.
When you buy silver bullion: Do you choose silver coins or silver rounds?
It’s a tough choice to make.
But no matter the choice, it will pay off in the long run.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.