If you’re looking to invest in physical silver, you’ll quickly encounter two main options: junk silver coins and silver bullion (bars and rounds). While both offer exposure to silver prices, they have distinct characteristics that make each suitable for different investment goals. This guide will help you understand the differences and choose the right option for your portfolio.

What is Junk Silver?

Junk silver refers to pre-1965 U.S. coins that contain 90% silver but have no numismatic (collectible) value above their silver content. Common examples include:

• Mercury Dimes and Roosevelt Dimes (1964 and earlier)
• Washington Quarters (1932-1964)
• Kennedy Half Dollars (1964 only for 90% silver)
• Morgan and Peace Dollars (1878-1935)

Learn more in our comprehensive guide: What is Junk Silver?

What is Silver Bullion?

Silver bullion consists of refined silver products valued primarily for their metal content:

• Silver bars: Rectangular pieces ranging from 1 oz to 1000 oz
• Silver rounds: Coin-shaped pieces (usually 1 oz) that are not legal tender
• Government bullion coins: American Silver Eagles, Canadian Maple Leafs, etc.
• Private mint products: Various designs from commercial refiners

Most bullion silver is .999 fine (99.9% pure silver) compared to junk silver’s 90% purity.

Key Differences at a Glance

Feature	Junk Silver	Silver Bullion
Purity	90% silver	99.9% silver
Recognition	Universally recognized U.S. coins	Varies by product
Premium Over Spot	Lower (2-10%)	Higher (10-20%+)
Divisibility	High (small denominations)	Low (typically 1+ oz pieces)
Liquidity	Excellent	Excellent
Storage Efficiency	Lower (due to 10% copper)	Higher (pure silver)
Privacy	Higher (often sold without reporting)	Lower (large purchases reported)
Aesthetic Appeal	Historical designs	Modern designs vary

Comparing Purity and Weight

The purity difference affects how much actual silver you’re buying:

Junk Silver Example:

• $1.00 face value of 90% silver quarters
• Contains 0.715 troy ounces of pure silver
• Actual weight includes 10% copper

Bullion Example:

• One 1 oz Silver Eagle
• Contains 1 troy ounce of pure silver
• Minimal alloy content

While bullion offers higher purity, junk silver’s lower premium often makes it more cost-effective per ounce of pure silver.

Premium Comparison

Premiums are what you pay above the silver spot price:

Junk Silver Premiums

Typically 2-10% over spot (calculated on silver content):

• Lowest premiums: Generic 90% silver (dimes, quarters)
• Moderate premiums: Mercury Dimes (collector appeal)
• Higher premiums: Morgan/Peace Dollars (semi-numismatic)

Example: If silver is $25/oz and a 90% quarter has 0.1808 oz of silver:

• Melt value: $4.52
• Actual price: $4.75-$5.00
• Premium: 5-10%

Bullion Premiums

Typically 10-20%+ over spot:

• Lowest premiums: Generic rounds and bars (10-15%)
• Moderate premiums: Private mint products (15-20%)
• Highest premiums: Government coins like Silver Eagles (20-30%)

Example: For a 1 oz Silver Eagle at $25 spot:

• Melt value: $25.00
• Actual price: $30.00-$32.50
• Premium: 20-30%

The premium difference can significantly impact your silver acquisition cost.

Liquidity and Recognition

Junk Silver

Pros:

• Instantly recognizable as U.S. currency
• Widely accepted by dealers, collectors, and the public
• Easy to verify authenticity (well-known designs and dates)
• No need for assay or testing in most transactions

Cons:

• May require sorting and counting for large amounts
• Condition variations can affect buyer preference

Silver Bullion

Pros:

• Standardized weights make pricing simple
• Major government coins (Silver Eagles) widely recognized
• Easy to store large amounts efficiently

Cons:

• Generic bars may require assay for large transactions
• Counterfeits exist (especially for popular designs)
• Less familiar to general public than U.S. coins

Both options offer excellent liquidity, though junk silver has an edge in recognizability.

Divisibility: Junk Silver’s Biggest Advantage

Junk silver excels in fractional ownership:

Small Denominations Available:

• Dimes: ~$1.79 worth of silver each (at $25/oz)
• Quarters: ~$4.52 worth of silver each
• Half dollars: ~$9.04 worth of silver each

Bullion Challenges:

• Most bars and rounds are 1 oz minimum ($25+)
• Fractional bullion (1/10 oz, 1/4 oz) carries huge premiums (30-50%)
• Can’t “make change” from a 10 oz bar

Real-World Example: If you need to sell $200 worth of silver:

• Junk silver: Sell 44 silver quarters (easy to count and transact)
• Bullion: Must sell entire 8 oz bar or multiple 1 oz pieces

This divisibility makes junk silver superior for:

• Gradual accumulation (buy a few coins at a time)
• Partial sales (sell only what you need)
• Barter scenarios (if silver becomes currency)
• Gift giving (a few coins make great gifts)

Storage and Security

Junk Silver

Pros:

• Familiar coin tubes and holders available
• Can be distributed among multiple hiding places
• Less suspicious than silver bars if discovered

Cons:

• Bulkier per ounce due to 10% copper content
• Heavier for equivalent silver weight
• More pieces to secure and count

Example: $100 face value (71.5 oz silver):

• Weight: ~7.2 pounds
• Volume: Larger than equivalent bullion

Silver Bullion

Pros:

• Maximum silver per unit of weight/volume
• Easy to stack and store efficiently
• Fewer pieces to track and secure

Cons:

• Large bars may be hard to hide
• All eggs in one basket if buying large bars
• May attract more attention than old coins

Example: 71.5 oz of .999 silver:

• Weight: ~4.9 pounds (excluding packaging)
• Volume: Significantly smaller than junk silver

For large stackers, storage efficiency favors bullion. For those prioritizing discretion and flexibility, junk silver wins.

Tax and Reporting Considerations

Junk Silver:

• Often sold in smaller quantities below reporting thresholds
• Many dealers don’t report sales under $10,000
• State laws vary (research your location)

Bullion:

• Large purchases may trigger dealer reporting requirements
• Sales of certain products (Silver Eagles in quantity) must be reported
• IRS Form 1099-B may apply to large transactions

Note: This varies by dealer and transaction size. Consult a tax professional for your specific situation.

Which Should You Choose?

Choose Junk Silver If:

• You want the lowest premium over spot price
• You value divisibility and flexibility
• You prefer recognizable U.S. coins
• You’re accumulating gradually with small purchases
• You like the historical aspect of owning old coins
• You want maximum privacy in transactions

Best for: Cost-conscious stackers, barter preparation, gradual accumulation

Choose Silver Bullion If:

• You want maximum silver purity
• Storage space is limited
• You prefer modern, pristine products
• You’re making larger one-time purchases
• You want internationally recognized products
• You value aesthetic appeal of modern designs

Best for: Pure silver investors, long-term holders, international portability

The Best Strategy: Own Both

Many experienced investors hold a mix:

• 70% Junk Silver: For liquidity, divisibility, and low premiums
• 30% Bullion: For storage efficiency and pure silver exposure

This approach combines the advantages of both:

• Use junk silver for smaller transactions and daily flexibility
• Hold bullion for long-term storage and large positions
• Benefit from lower average premiums across the portfolio

Selling: What’s Easier to Liquidate?

Both are highly liquid, but with differences:

Junk Silver:

• Every coin shop buys junk silver
• Typically quoted as “X times face value” (e.g., “13x face”)
• Quick transactions without testing
• May get better prices from collectors for premium dates

Bullion:

• Also widely bought by dealers
• Priced per troy ounce
• May require testing for generic products
• Government coins (Silver Eagles) command best buyback premiums

Verdict: Roughly equal liquidity, with junk silver slightly faster for small amounts.

Calculating Value

No matter which you choose, knowing the current value is essential:

Junk Silver: Use our junk silver calculator to calculate melt value based on face value and spot price. Remember the rule: $1.40 face value ≈ 1 oz pure silver.

Bullion: Multiply troy ounces by spot price, then subtract dealer spread. Most dealers buy back at 1-2% below spot.

Conclusion: The Verdict

There’s no single “best” choice - it depends on your goals:

For Maximum Value: Junk silver’s lower premiums mean more silver per dollar

For Maximum Purity: Bullion’s .999 fineness provides pure silver content

For Flexibility: Junk silver’s small denominations can’t be beat

For Storage: Bullion’s density allows compact storage of large quantities

For Beginners: Start with junk silver (especially Washington Quarters) to learn the market with lower premiums and better divisibility.

Most importantly, focus on acquiring silver regularly at reasonable prices rather than agonizing over junk vs. bullion. Both will move with silver spot prices, and both offer tangible value in your hands.

Ready to start? Use our free calculator to see what your junk silver is worth, or learn how to calculate silver coin values yourself.