Buying Junk Silver Coins

Buying junk silver coinsAre you considering buying junk silver coins like these pictured? Buying junk silver coins is relatively simple and you can start purchasing silver coins on a limited budget. A bag or roll of 90% silver coins with a face value of $10 can often be purchased for less than $200 from online dealers like Bullion Direct or this roll of 90% silver quarters from BGASC. If you have a larger budget to work with, you may want to compare prices for a $100 face bag from Bullion Direct or BGASC.

If you’re like me, you may even have some junk silver coins and not know it. I’ve owned a small number of  junk silver coins for two decades and didn’t realize it until recently. Decades ago, my grandparents gave me their small collection of old Washington Quarters.  I’ve learned that those quarters minted before 1965 are considered junk silver because 90% of each coin is composed of silver.

My grandparents’ collection consisted of about forty of these quarters. When viewing the reeded edges of these coins, they appear different from the coins minted after 1964 that we’re accustomed to seeing. The reeded edges of these pre-1965, 90% silver, Washington Quarters are a solid silver color, no copper stripe. U.S. government issued coins minted in 1965 and after don’t contain silver and the reeded edges are copper and silver (although there’s no silver content) in color.

Let’s go over some of the basics of buying junk silver coins. Most junk, or 90% silver coins, have little numismatic value, or collectible value. The value in these pre-1965 coins comes from the silver they contain. And don’t let the term “junk” fool you. While these coins are usually in average circulation condition (have wear from being out in circulation and used by the public), they are in demand and offer a great way to begin investing in silver at an affordable price point. You may also be able to purchase 90% silver coins in brilliant uncirculated or proof condition. Coins in this condition will be shinier and have little to no visible wear, but they’ll be more expensive than the ones that had been in circulation and are worn.

Junk silver coins contain from 35%-90% silver. While there are several coins minted in various denominations (see the photo above for a sample of various 90% silver coins), for the purpose of this article, I’m going to keep it simple and focus on buying junk silver coins that are most recognizable to people, the Roosevelt Dimes and Washington Quarters. The Roosevelt Dimes and Washington Quarters minted prior to 1965 contain 90% silver. Keep in mind nearly all (with the exception of the War Nickels) pre-1965 nickels do NOT contain silver, so don’t get too excited if you find an old nickel.

If you’re considering buying junk silver coins, you’ll have the option to buy as little as one coin, a roll of coins, and larger quantities by the bag. You also have the option to purchase only pre-1965 Roosevelt Dimes, only pre-1965 Washington Quarters, or more likely, a mixed bag containing various 90% silver coins (dimes, quarters, half dollars).

Calculating the price of junk silver is the next step. Face value is a term you’ll need to learn. It’s simply the value that’s printed on the coin, and not the value based on silver content. For example, the face value of one silver dime is ten cents, the face value of one silver quarter is twenty five cents, and the face value of a half dollars is fifty cents.

Regardless of whether you combine ten silver dimes, four silver quarters, or two half dollars together into a group having a face value of one dollar, the original weight of the ten silver dimes, four silver quarters, or two silver half dollars would have been the same, .723 troy ounces. However, most old silver coins have had some degree of wear. Given that, dealers most often figure the weight of one dollar’s worth (face value) of silver coins to be .715 troy ounces. A $100 face value bag of 90% silver coins should weigh approximately 71.5 troy ounces and a $1000 face value bag of the same coins should weigh 715 troy ounces.

To calculate the silver value of a single 90% silver dime, take .10 (ten cents) and multiply it by .715 to come up with .0715. Now multiply .0715 times the current spot price of silver. You may also refer to the Precious Metal Prices in the upper right hand column of this site. For example, if the spot price of silver is $22 per troy ounce, take .0715 times $22 and you’ll come up with $1.57. This is what the dime is worth in terms of silver value, but that doesn’t mean you’ll be able to purchase the silver dime for that amount. Dealers normally charge a premium on top of that price. The rule of thumb is that you’ll pay a higher premium on a single coin or small roll of coins than if you buy in bulk, such as when you buy a $100 or $1000 face value bag.

Bags are often priced in terms of “X” number times the face value. In our example above, the 90% silver dime’s value in terms of silver content was $1.57 or 15.7 times the face value. Once you solve for “X” it becomes easy to figure the price of a bag. If you buy a bag filled with 90% silver coins having a $100 face value, you can simply multiply X, in this case 15.7, and multiply it by $100 for a total of $1,570. Likewise, a bag of 90% silver coins with a face value of $1000 dollars will cost you about $15,700. You can see how much $100 and $1000 bags of 90% silver are currently selling for by going to BGASC.

Both online and offline dealers make their money by purchasing these coins at a discount or slight premium to spot prices and selling them with for more, most above at a premium above spot prices. Where to buy junk silver coins? If you live in or near a large enough city, there will most likely be one or more coin shops. Many brick and mortar dealers carry numismatic (collector grade) coins, gold and silver bullion, and junk silver. In addition, coin shops usually buy these same items. The people working at coin shops, often the owners, can offer a wealth of information on different precious metal investments. Don’t be afraid to ask them questions. Ask the people at the coin shop what’s available for 90% silver coins and for the prices of the items. Be sure to thank the coin shop folks for their time and help.

It’s not uncommon to find more competitive prices online at dealers like Bullion Direct or BGASC.  You’re going to pay a higher premium when you buy in small quantities. Regardless of where you purchase the coins, make sure you’re not talked into buying some “exotic” gold or silver coins. It’s typically safer to buy U.S. government-issued coins. Here are links to some popular 90% silver products so you can compare prices.

If your budget is up to $200:

90% silver with a $10 face value at Bullion Direct.

90% silver with a $10 face value at BGASC.

If your budget is up to $2,000:

90% silver with a $100 face value at Bullion Direct.

90% silver with a $100 face value at BGASC.

If your budget is from $5,000 to $15,000:

90% silver with a $500 face value at BGASC.

Another popular option for silver investors is the Silver American Eagle that is coined by the U.S. Mint. Compare prices for a tube of 20 at Bullion Direct (here’s the link) and BGASC (here’s the link). Also, we’ve included links to some books below that may prove to be valuable resources. This article is not intended to be used as investment advice. Make sure to spend the time necessary to get familiar with whatever you decided to invest in. If you have an interesting way to invest in silver, please share below in the comments section.

Share This Post

Related Articles

One Response to “Buying Junk Silver Coins”

  1. […] and silver bullion coins, you may want to mix it up and buy some small gold and silver bars, junk silver, or gold jewelry. I hope you find this article helpful and good luck as you continue in your […]

Leave a Reply

© 2017 All rights reserved. Site Admin · Entries RSS · Comments RSS
Powered by WordPress · Designed by Theme Junkie