Beginner’s Guide to Buying Silver

Silver is one of the safest, surest investments for your money at the moment. And while that’s not likely to change any time soon, investing now can be way more rewarding than investing at a later date.

Silver rate today in India stands at about Rs 39,960 per kilogram, with the gold/silver ratio at a multiyear high. The growing demand for the white metal all over the world, coupled with the limited supply means silver holds the potential for being more profitable than gold in the foreseeable future.

A physical asset whose value is virtually independent of the performance of national and international currencies, silver is a wonderful investment option to buyers, both newbie and experienced. But with so many buying options, sources and charges involved, the act of buying silver can be a bit confusing. How do you go about buying silver? Where should you buy from, and in what form?

Here’s all you need to know about investing in silver in India…

Silver Buying Options

Buying Silver in Physical Form

When it comes to buying silver, there are so many various forms that can leave a beginner scratching his/her head. There’s the staple silver jewelry, coins, bars, medallions, even utensils! So which of these should you look to invest into? Unless there’s a wedding or a ceremony on the horizon that would require you to purchase or gift jewelry, you should look to invest in silver bullions (coins, ingots and bars) or silver items with minimal work or fabrication done on the metal.

These are the cheapest as there would be no making/fabrication charges added to their price. Silver utensils and decorative items may have mixed alloys which depreciate their value, and may have some degree of fabrication involved which adds to their final price. When you’re looking to buy silver purely from an investment point of view, it’s essential you focus on minimizing your expenditure and acquiring the maximum quantity of silver that money can buy.

Buying E-Silver

E-silver has become a popular investment during recent times. As the name suggests, investing in e-silver means purchasing and subsequently owning silver in electronic form, in a demat account. Though this does take away from the aesthetics and joys of handling the precious white metal, e-silver has its own advantages. You don’t have to worry about storage and security as in case of physical silver and you can include your e-silver in your investment portfolio. Note that you’re required to have a separate demat account for making a purchase. The minimum quantity available for purchase is one unit, equivalent to a hundred grams of silver. E-silver is easy to trade, you can sell or purchase online in the same manner as shares. Also, you have the facility to convert your e-silver assets into physical delivery in select cities.

Where to Buy Silver

Trusted Jewelers

When it comes to buying silver, the traditional way is the best and the most economical. You are more likely to get the best price at a credible jeweler than from any other selling body, including the government corporations and private banks. Even Metals and Minerals Trading Corporation, a government run metal trading unit and National Indian Bullion Refinery sell at a higher rate owing to the added guarantee and packaging charges. It’s hence advisable you buy from a trusted jeweler who can provide you with a purity certificate.

Commodities Exchange

If you’re looking to purchase larger quantities, commodity futures markets like Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) are a viable option. Note that the minimum silver contracts that they trade happen to be in units of one kilogram and are delivered in lots of thirty kilograms. Also, the end price you’re required to pay for your purchase is inclusive of the initial margin. 

Bullion India

Bullion India is a private trading unit that offers gold and silver to its members at wholesale rates. Their silver is 999 fineness 24 carats and is globally acceptable. You can buy as little as one gram, which is a wonderful option for small investors. Members can store their silver at the company’s secured vaults and can have it delivered to them whenever they like. The company provides its members with 24X7 online access to their account and charges no brokerage fee or account opening fee.

Stock Up Now, but Remember To Sell At the Opportune Time