The difference between silver investment coins and collector coins

There are countless different types of silver coins. Silver coins can be distinguished by design, quality, silver content and circulation. The characteristics of a silver coin determine whether they fall into the category of investment coin or collector coin. This article discusses the main differences between the two types of coins and describes some famous coins.
 

Silver investment coins

For investors interested in buying physical silver, it is cheaper for a retail investor to buy silver coins instead of silver bars. This is because you do not have to pay VAT on silver coins, which have legal tender status. You only pay VAT on the seller's profit margin. Silver bars, on the other hand, do not fall under this favourable margin scheme, and are fully taxed at 21% VAT. In addition, with coins comes the advantage that they can be sold in smaller quantities, so it also brings more flexibility.
 
More explanation on the difference between coins and bars and their price structure can be found here.
 
So for many individuals interested in buying physical silver, silver coins are the best option. As a result, there are many silver investment coins on the market, which should appeal to this target group. Typically, the design of these investment coins has changed very little over the years. In addition, the quality of the investment coins is referred to as ‘uncirculated’. This means they have the same quality as coins circulating to be used by consumers. As a result, the production process of the coin is relatively inexpensive, making the price of the coin not much higher than the spot price of silver.

Popular investment coins

The Silver Mountain sells several popular silver investment coins. The best known of these are the Britannia, the Kangaroo, the Krugerrand, the Maple Leaf and the Vienna Philharmonic.
 

Britannia

The Royal Mint mints the silver Britannia coins in 99.9% pure silver. The coin boasts legal tender status. The obverse shows the Lady Britannia surrounded by inscriptions, while the reverse shows the effigy of Queen Elizabeth II or King Charles.
 

Kangaroo

The Perth Mint mints the Kangaroo coins in 99.99% pure silver. The coin has legal tender status and the obverse shows a kangaroo. The reverse shows the effigy of Queen Elizabeth II.
 

Krugerrand

The South African Mint has also been minting the popular Krugerrand coin in silver since 2017. The silver coin depicts Paul Kruger. He was president of South Africa from 1883 to 1900. The other side depicts a springbok, the national symbol of South Africa. The coin is minted in pure silver (99.99%) and has legal tender status.
 

Maple leaf

Since 1988, the silver Maple Leaf has been minted by the Royal Canadian Mint. The distinctive design features a maple leaf, Canada's national symbol. The coin has legal tender status in Canada and its silver content is 99.99%.
 

Vienna Philharmonic

The silver Philharmonica coins are minted by the Austrian Mint. The coin contains 99.99% pure silver and has legal tender status. The obverse shows various philharmonic instruments, while the reverse shows the ‘Great Pipe Organ’ (organ) from the Golden Concert Hall.

Silver collector coins

What distinguishes collectible coins from investment coins is that the quality of the coin is higher. Collector coins are often struck in proof quality. This makes details in the design stand out better and the coins shine more. Silver coins of this quality therefore require better protection and are usually packaged in separate capsules. In addition, these coins should only be touched with gloves. Besides being of higher quality, collectible coins are often rarer due to a limited edition. Due to this limited edition and a more expensive production process, the price of collector coins is a lot higher than the spot price of silver.
 
Coin houses often issue series of coins centred on a particular subject. This subject recurs throughout the years, but each vintage of the coin has a unique design. Coin series with these changing designs are popular with coin collectors. Therefore, the fact that circulation of each coin is limited makes these collectible coins more valuable in the eyes of coin collectors.
 

Popular collector coins

These are individuals' most popular collectible coins.
 

Lunar coin

The silver Lunar coin is minted every year by the Perth Mint of Australia. The coin features an animal from the Chinese zodiac. The choice of animal is determined by the 12-year Chinese lunar cycle. Each year within the cycle is presented by a different animal and anyone born in that year is assigned certain character traits associated with this animal. So the design of the coin changes every year and once every 12 years, the same animal returns to the coin in a different design. The coin has legal tender status and is minted in pure silver (99.99%).
 

Panda coin

The silver tip with panda image has been minted every year since 1983 by order of the Chinese government, by the mint China Gold Coin Corp. The coin is struck in pure silver (99.99%) and, as the name suggests, weighs 30 grams. The Panda coin has a face value of 10 yuan. The Chinese mint, China Gold Coin Corp. is the only mint in the world to use grams for coin weights.
 
It is tradition that every vintage of the Panda coin gets a new design. Only the year 2001 and 2002 saw a departure from this tradition when the coin received the same design in these consecutive years. As this decision did not go down well with coin collectors, it was reversed.
 
Investment and collector coins both possess different characteristics that can be of interest to different groups of investors and collectors. Are you unsure about what type of coin suits your needs? If so, please contact one of our advisers.
 
Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past results offer no guarantees for the future.