Junk Silver: U.S. Coins With 90% Silver

Junk Silver Nickels
“Junk Silver” is a term used by silver investors to describe a circulated coin with value derived only from the content of the silver.

First let’s start with why anyone would want to buy junk silver. Based on our definition, Junk Silver is really just a word-phrase coined by investors to describe a circulated silver coin, but has no value other than the silver metal used to mint the coin. Meaning ‘junk silver’ has no value as rare coins.

But, coins marked as ‘junk silver’ have value because of the silver metal used to create the coin. And, precious metal investors love the silver because junk silver coins can be viewed as a substitute for bullion bars, the American Silver Eagle, or silver mining stocks.

As with all investors, the main goal is profiting from your investments. An investor profits from junk silver in two ways. The most common idea is profiting from the rising price of silver. When an investor buys a batch of junk silver and the price of silver rises, the investor can cash-out and profit from her investment.

The second idea and less common, is profiting from the spread of the coins. Usually the price of junk silver coins trades in a -5% to +5% of the spot price of silver. So, if an investor found a seller willing to sell at a -5% of silver spot and turned-around to sell to a buyer willing to pay +5% of spot, then the investor would realize a profit.

When precious metals enjoyed bull markets, 90% silver coins often achieved premiums of $1.20/oz to $1.50/oz over spot, sometimes as high at $2.50/oz. So, it’s easy to see how an investor could profit from an increase in silver spot price or from the spread.

Junk Silver Ratings: Top 5 Places to Find Junk Silver

So, where do you find your next silver investment in junk silver? We’ll cover the top 5 places to find junk silver. Rated from number one to five, we’ve listed five places to find junk silver as an investment.

1. eBay

Rated number one because junk silver in thousands of varieties abounds on eBay. If you’re looking for $5 or $1,000 of junk silver almost any amount can be found on eBay. In addition to the amount of junk silver, eBay also provides information on the credibility of each seller. As an investor buying your next asset, finding an honest seller could mean the difference between profit or loss.

If you do decide to use eBay, it’s easier to find junk silver if you search for more particular junk silver. For example searching eBay for “junk silver” will turn up fewer results than searching for terms like pre-1964 U.S. Circulated Quarters or Batch of Silver 1964 Nickels. Also be aware of the sellers rating, the seller’s information can be found to the right of a listing under the heading: “Meet the Seller.” These ratings will provide you with the honesty and credibility of the seller.

2. Provident Metals

Provident Metals almost specializes in Junk Silver. With some of the lowest prices around, Provident Metals almost beat eBay if it weren’t for the selection. Even still, the selection at Provident Metals is impressive. With the ease of use on the Provident Metals website, you’ll be breezing through the selection with as much junk silver as you’d like without hassle. Add that to the stellar reputation of Provident Metals and you have yourself with a stable place to buy junk silver.

3. C.C. Silver & Gold Inc.

C.C. Silver & Gold Inc., this company offers a more professional approach. And for investors with a large purchase of $1,000 or more, C.C. is a better option than eBay. Unlike CMI, C.C. seems to have more coin choices as well, as of now C.C.’s website is showing options for Morgan Dollars, Peace Dollars, and 90% Silver coins with U.S. Half-dollars, Quarters, and Dimes all dated before 1964.

While browsing the selection, I noticed non-users will be confused at the process of purchasing what she is looking for. I had a hard time knowing what pull-down option to choose. So, if you don’t use the Internet well, CMI might be a better option.

4. CMI Gold & Silver

CMI Gold & Silver offers junk silver bags to investors worried about professional businesses. Just take a look at the spotless design of CMI’s website. Now there’s a professional website. A professional website does not necessarily increase the returns of an investor, and in this case CMI does offer junk silver at the same premium of silver bullion.

One of the downfalls of CMI is the lack of an on-line store. CMI wants buyers to call CMI as to “help you make the right decision for your precious metal investment.” However, professional CMI’s website, requiring investors to call CMI is rather inconvenient. For the Internet users, CMI is not for you; however, for some CMI is the place.

5. Monex Deposit Company

Monex, with the professional image CMI casts, Monex casts the same. Or it might be egotism, either way Monex says it “[has] led the industry in silver coin investing programs.” But that claim is hard to verify. Again, Internet shoppers will be disappointed because Monex wants you to call an account representative before you can make a purchase.

To concluded this article in rather simple terms, if you love the Internet use eBay, Lynn Coins, or C.C. Silver & Gold Inc., but if not use CMI or Monex. Likewise, if you have a limited amount of money, less than $500, use eBay, or Lynn Coins, but if you have more than $500 go to C.C. Silver & Gold Inc, CMI, or Monex.

The Most Common Junk Silver Coins

Bag of Junk Silver
A Typical Bag of Junk Silver

The most commonly collected U.S. junk silver coins are the Mercury dimes and Roosevelt dimes, Washington quarters, and Franklin half dollars, and Kennedy half dollars, which are minted in or before 1964. These coins have a 90% silver composition (“coin silver”).

When minted some coins contain 0.7234 troy ounces of silver per dollar of face value. In practice, the silver content is usually assumed to be 0.715 ounces because circulation erodes the coins. Less common junk silver is the Kennedy half dollars from 1965 to 1970, which contained 40% silver. The value of silver content is one reason investors buy junk silver coins. The percent of silver is less likely to come into question, than silver bullion bars, which require certification and authenticity tests.

A “bag” of junk silver, ($1,000 face) contains approximately 715 ounces of silver. And, it will generally track the spot price of silver. If silver goes up ten cents, a bag of 90% silver coins will rise $70 or so; however, prices sometimes lag sharp spot price movements because of the liquidity of junk silver coins.

Coin Oz. of Silver
(1942-1945) Silver War Nickel 0.0563
(1916-1945) Mercury Dime 0.0723
(1946-1964) Roosevelt Dime 0.0723
(1932-1964) Washington Quarter 0.1808
(1916-1947) Liberty Half Dollar 0.3617
(1948-1963) Franklin Half Dollar 0.3617
(1964) Kennedy Half Dollar 0.3617
(1965-1970) Kennedy Half Dollar 0.1479
(1878-1921) Morgan Dollar 0.7735
(1921-1935) Peace Dollar 0.7735
(1971-1976) Eisenhower Dollar 0.3162

Canadian Junk Silver

In Canada — the Dime, Quarter, Half Dollar, and Canadian Dollar usually minted before 1967 are the most common Canadian coins used as junk silver.

Coin Oz. of Silver
1920-1967 Dime 0.0599
1920-1967 Quarter 0.1499
1920-1967 Half Dollar 0.2999
1935-1967 Dollar 0.5997

 

How to Buy Junk Silver

Junk Silver Coins
The Most Common Junk Silver Coins

A “bag” of junk silver, ($1,000 face) contains approximately 715 ounces of silver. And, it will generally track the spot price of silver. If silver goes up ten cents, a bag of 90% silver coins will rise $70 or so; however, prices sometimes lag sharp spot price movements because of the liquidity of junk silver coins.

When bags of circulated 90% silver coins can be bought — at about the same premium as 100-oz bars, or even at small premiums over 1-oz silver rounds — bags should be the first choice for many investors because of the reduction in price when an investor buys in bulk.

Choosing between junk silver coins or bullion bars is largely a matter of an investor’s goals, resources, and storage space. Although before 1965, silver coins would be ideal for survival purposes, junk silver coins sell at premium, or below premiums on 100-oz bars and, 1-oz silver rounds.

It’s important to know, junk silver coins hold greater upside price potential than .999 fine silver bullion products. At times, and especially during rising precious metals markets, circulated U.S. silver coins pick-up premiums much faster than other investments in silver.

However, .999 fine bullion items (1,000-, 100-, and 10-oz bars and 1-oz rounds) can be produced at any time; as a result, there are limits to how high premiums on .999 fine silver bullion items can go.

The main difference between investing in bullion bars instead of junk silver is solving the issue of space. Junk silver requires much more storage space than bullion because of the purity of bullion verses junk silver. Junk silver is usually 90% silver, whereas bullion can be 100%, thus saving space.

Buyers can expect to pay a little more for half-dollars than for dimes or quarters because of the higher silver content as well as half-dollars are much more popular. Yet another reason for the demand of half-dollars is fewer half-dollars were minted than dimes or quarters.

Although many investors buy junk silver coins as bullion investments, other investors buy junk 90% silver coins for “survival purposes.” These buyers fear the worst for the dollar. They fear the dollar will be printed until it becomes worthless. If this “worst-case scenario” were to become reality, then U.S. 90% silver coins would be used the purpose they were originally minted: as money.

The history of paper currencies have been to print until those currencies became worthless. Actually, today most dollars in circulation are not printed but are “electronic” or digital dollars, created by the Federal Reserve to increase the supply of money, which many argue increases inflation.

Junk Silver Coins or Silver Bullion Bars?

Choosing between junk silver coins or bullion bars is largely a matter of an investor’s goals and resources. Although before 1965, silver coins would be ideal for survival purposes. Junk silver coins sell at premium, or below premiums on 100-oz bars and, 1-oz silver rounds, junk silver coins hold greater upside price potential than .999 fine silver bullion products. At times, and especially during rising precious metals markets, circulated U.S. silver coins pick up premiums.

However, .999 fine bullion items (1,000-, 100-, and 10-oz bars and 1-oz rounds) can be produced at any time; as a result, there are limits to how high premiums on .999 fine silver bullion items can go. To support this assertion — bags of 90% silver coins hold greater upside potential than .999 fine bullion items — a little background on junk silver coin prices and silver prices must be shown.

Over the last three decades, when precious metals enjoyed bull markets, 90% silver coins often achieved premiums of $1.20/oz to $1.50/oz over spot, sometimes as high at $2.50/oz. This is because many investors want silver in a form they know is silver, and pre-1965 U.S. 90% silver coins certainly fit the investors objective.

Following silver’s spike to $50/oz in the 1980’s, industrial silver users implemented efficiency moves which reduced industrial demand for silver. Furthermore, the rising prices of the 1970’s had spurred efforts to mine more silver and to increase the recovery of silver in the secondary market. Today, reclaimed silver or recycled silver, is a major source of silver — the essential metal for industrial consumption.

Because of these efforts, silver went into “surplus” in the 1980’s. Meaning, newly refined silver exceeded industrial demand. This caused investors to avoid silver in the 1980’s, except for a shortly-lived strong market in 1987.

But, for most of the 1980’s, investors were net sellers of silver. Selling resulted in huge quantities of junk silver coins to be refined and converted into .999 fine silver. Meanwhile, the Y2K scare in 2000, caused yet another huge melting of circulated 90% silver coins. Buying spurs junk 90% silver began when fears of the world’s computers would stop working on January 1, 2000.

Many people began preparing for the worst. And, fears were accelerated, as highly respected economists issued warnings and wrote books on the coming collapse. Entire newsletters were dedicated to educating people: how to prepare. One recommendation was circulated instructed people, 90% silver coins should be stashed away so the coins could be used as money when banks closed and ATMs no longer dispensed $20 bills.

Consequently, people bought junk 90% silver coins at whatever prices, and bags picked up 50% premiums. The Y2K scare showed just how quickly 90% silver coins can pick up big premiums and that premiums on 90% silver coins can rise while the price of silver remains stagnant — during 1999, the price of silver was essentially unchanged.

And then, on January 3, 2000, as soon it became evident the world’s computers were not going to fail, investors began selling. And, sellers continued throughout the year, even into 2001. As the sell off continued — forcing down prices on 90% silver coins until they sold at discounts — some junk silver sold below the value of its silver content.

In addition to the sell off, untold quantities of bags were refined into .999 fine silver bullion. Therefore, bags of pre-1965 U.S. silver coins are in short supply. After the Y2K crash became a nonevent, premiums on bags of 90% silver coins fell to record lows. Junk silver coins became less expensive than 100-oz silver bullion bars. Indeed, the potential for 90% silver bags to pick up big premiums justifies the buying of bags circulated silver coins by investors who can manage the bags’ weight and bulk.

Silver Coin Melt Value Calculator

Another resource that a junk silver investor needs is a melt value calculator. This online calculator will figure out the silver coins value in any amount input into the online interface. You can customize the calculator to figure the value of coins at different market prices. The current market price is displayed in a graphic that covers a one month investing period. This allows you to find out your current investment value without having to have multiple browsers open.

With a silver coin melt value calculator you can determine that price at which you will make an acceptable profit. It will also allow you to figure out what quantities of coins you should be looking for to turn the type of profits you want. This is another must have resource for the serious junk silver investor.

Junk Silver Recap

Junk silver is an informal term used in the United States and Canada for any silver coin which is in rough to fair condition. Junk silver usually, has no collectible value above the bullion value of the silver the coins contain.

Such coins are popular among investors seeking to invest in silver — particularly in small amounts. The word “junk” refers only to the value of the coins as a bullion investment and not to the actual condition of the coins; meaning, junk silver is not necessarily scrap silver.