How to buy silver

Physical silver

Physical silver is known as “bullion” and comes in coins, bars, or ingots (large bars). You can purchase physical silver through the U.S. Mint or at a precious metals dealer; both allow you to buy silver online.

Investing in physical silver is best for investors who want to take custody of their assets and don’t mind storing and insuring their silver holdings. If you’re partial to hard assets you can hold, buying silver bullion may be a good option.

But investing in physical silver might be more costly, as you usually pay dealer markups, transfer fees and other transaction fees. And if you don’t store the silver yourself, you’ll also pay storage and insurance fees.

Mel Mattison, a certified financial planner and entrepreneur, mentions that holding physical silver can be a good idea, but he recommends being wary of some online dealers when purchasing. “Make sure that you purchase these from a highly reputable dealer. Encasing pure silver around a core of lead to create a counterfeit bar with solid weight is a real risk when purchasing bullion from untrusted sources,” he said.

Silver stocks

You don’t have to buy actual silver to gain exposure to the silver market. Instead, You can invest in silver-related stocks, such as silver mining or production stocks. These stocks can be purchased at most major brokers, which offer stock trading with little to no trading commissions.

Since silver is typically mined as a byproduct of mining for other metals (such as iron ore or aluminum), some mining stocks don’t have much exposure to silver. Here are a few stocks that are focused on silver for their returns:

Pan American Silver (PAAS)

Pan American Silver has the largest silver reserves in the world and focuses on precious metals mining and production. It produces metals such as silver, gold, copper, lead and zinc. It’s listed on the New York Stock Exchange and can be traded under the ticker symbol “PAAS.”

First Majestic Silver (AG)

First Majestic Silver is a precious metals mining company that focuses exclusively on silver and gold mining. While most of its revenue comes from gold mining, it’s heavily invested in silver mining and production. It’s listed on the New York Stock Exchange and can be traded under the ticker symbol “AG.”

Silver ETFs

If you want direct exposure to the spot price of silver without physically owning it, you can invest in a silver exchange-traded fund (EFT). These funds own silver directly, and each share is backed by physical silver that is professionally stored and insured with a trusted custodian.

Investing in a silver ETF may be preferred due to its ease of trading and relatively high liquidity compared to buying and selling physical silver. There are annual fees associated with a silver ETF to pay for administrative costs, but these fees are typically under 1% per year.

The most popular silver ETF is iShares Silver Trust (SLV). As of May 2023, it has nearly 470 million ounces of silver in storage, backing all outstanding shares.

» MORE: Gold vs. silver

Silver futures and options

If you don’t care much about owning silver itself but want to trade silver markets, you can do this with silver futures and options contracts. Silver futures are exchange-traded contracts that purchase silver at a future, predetermined price. Silver options allow you to invest in contracts and collect profit based on the price movement of silver.

The CME group settles these contracts, and you can buy or sell silver futures contracts through a broker like Schwab. Silver options are also cleared through the CME group and can be traded through a supported broker such as Schwab or TD Ameritrade.

Silver ETNs

Another derivative trading product, silver exchange-traded notes (ETNs), are debt securities you can trade on public exchanges. They track the spot price of silver and pay out a profit based on the price movement of silver, less any fees. ETNs are somewhat like ETFs, but an ETN doesn’t hold the asset it tracks. Instead, it's an unsecured debt security another organization underwrites.

ETNs are very risky short-term investments that can siphon your money in a hurry if there’s a massive price shift in the price of silver in the wrong direction.

Silver IRAs

Silver IRAs are self-directed IRA accounts that allow you to purchase alternative assets such as gold and silver within a tax-advantaged retirement account. These accounts allow you to own physical silver, but it must be kept with a custodian while it’s in your account.

Silver IRAs can avoid the 28% capital gains tax when you’re buying or selling silver within your account. And when you turn retirement age (currently 59 ½ ), you can take custody of the silver in your account (as a withdrawal).

» MORE: Best gold IRA companies

Pros and cons of investing in silver

Is silver right for you? Take a look at the pros and cons of investing in silver to determine if it’s the right type of investment for your particular needs.

Bottom line

Silver is a popular investment for investors looking to gain exposure to alternative assets in their portfolio. While silver is a precious metal with some intrinsic value, it's also useful in a number of industrial applications. As a result, silver’s value tends to go up when economic conditions improve because more people are buying consumer goods. This is one reason silver is more volatile than gold, though.

You can buy silver in several ways: physical silver, silver ETFs, derivatives trading and silver IRA accounts. But investing in silver, or any precious metal, comes with high risk and potentially more volatility than traditional investments. If you’re looking to buy silver, do your research beforehand and only work with a reputable broker or dealer when purchasing.