10 Rules for Silver Investment in India

As per the World Silver Survey 2018 published by The Silver Institute and Thomson Reuters: India has jumped to 12th position (from 14th last year) among the Top 20 Silver Producing Countries. India’s contribution in the silver market has increased to 16.9 million ounces as compared to 14Moz in 2016. And, India continues to be one of the greatest markets for precious metals like silver and gold. We are one of the biggest contributors of silver in Asia, and any changes in the demand pattern influence the price of silver in the international markets.

If you find it difficult to put money on a full ounce of metals like gold, you can for a much affordable and reliable precious metal like silver. Today Silver rate in India makes it affordable options to invest money in silver bullions and ornaments. Apart from investment, silver is widely used in industrial applications like solar panels, computers, mobile phones, and so on. It has not been replaced by any other metal so far.

But gold, on the other hand, is for wealth accumulation. It is mostly found in the bank lockers or is safely stored in the world’s central bank.

If you are also planning to invest money in Silver, you can compare the rates from different suppliers and choose the best available option. Make sure that you check the silver price in major cities so that you will get some fair idea about its current price in the market. You can also get in touch with your financial advisor to know about more options suited for your investment plan.

For both the urban and rural population, it is a good investment asset and here are the 10 thumb rules before you plan to invest your money in silver -

1. Choose Silver Coins for Small Investments

If you are planning to invest only a few thousand rupees into silver, you can consider buying coins instead of other forms.

  • It is very easy to get them and you can even store them easily at home. However, you will be paying a slightly higher rate than silver bars as coins usually have some form of art or images and the labor charges and this is added to the final price.
  • On the other hand, it also has advantages in the sense that you can buy silver with very less money. It is a good option for salaried individuals and business people who want to save money on regular basis.
  • You can accumulate some coins every month according to your capacity and it is also possible to sell them at a later stage when you want to liquidate your investments.
  • Yet another advantage of buying silver coins is their availability with banks. And it is also possible to buy them from reputed jewelers in your neighborhood. You will even get a certificate about its purity and this will be useful when you have to sell them back into the market.
  • You need to remember that banks will only sell silver coins and will not buy them back at a later stage. You will have to approach jewelers to sell your silver coins if it is needed in future.

2. Choose Silver Bars for Huge Investments

You can invest bulk money on such silver bars and easily save money for your future. As the silver bars have good demand in the market, you will not have any problems when you want to sell them at a later stage.

  • Look for the best deals in the market from the reputed suppliers and you can select silver bars instead of coins.
  • You may not get them through banks as they are bulky and banks prefer to sell only packaged coins that are certified from reputed sources.
  • However, you can approach jewelers who will conduct tests on such silver bars and get them tested for their purity before buying them from the market.

3. Make Good Use of Online Commodity Market

If you are not the kind of person who will invest in physical silver, you can still invest in silver through the commodity market. The investment needed will be slightly higher as compared to regular silver and you will have to pay a certain percentage of the entire value of the contract.

  • Make sure that you have sufficient funds to pay for additional requirements due to fluctuations in silver price in the international market.
  • You can easily sell the contracts at a later stage before expiry whenever you are getting decent profits.
  • This is slightly speculative in nature and cannot be considered as a pure form of investment. However, you will be able to leverage your position when you invest wisely in the commodity market.
  • Make sure that you watch the price movements carefully as they will be different from the actual physical price of silver. You can also check the silver prices across the major hubs to get a comparison about price fluctuations in the market.

4. Always Buy From Reputed Suppliers

Even though you can buy silver coins and bars from any source, it is always a good idea to buy them from trusted sources. When it comes to coins, you can easily buy certified coins from banks even though they charge some extra premium.

  • On the other hand, when it comes to bars, you have to approach local jewelers and get the bars tested from reputed sources for purity.
  • In this way, you can be sure that they are pure and you will be able to get the best value for your money in future.
  • Never buy them from unknown traders in the market as you will have difficulty in ascertaining the purity of the bars on your own and there are chances that you may get cheated in such deals.

5. Secure Them Safely with Bank Lockers

Many people make the mistake of keeping the silver bars at home and this will become a huge burden when you have a large quantity of them. You should never compromise on the safety factor and always choose bank lockers to safeguard your silver investment.

  • It costs very less to take bank lockers and you will be completely relieved that your silver is safe in their custody.
  • As you have ready access to your silver at any point in time, you need not worry about anything and easily choose this option.
  • If you store them at home, there is a chance of theft or burglary and you may lose your entire investment. Even otherwise, you are sure to lose your peace of mind when you have a large quantity of precious metal at home due to security reasons.

6. Track Prices from Different Sources

Silver rates keep fluctuating on a daily basis. For this reason, you should always check silver prices prevailing in your city so that you will be able to get them at the best price in the market.

  • This is especially needed when you are buying silver bars from local traders as you will be able to get the best deal when you have a thorough idea about the current market rate of the metal.
  • There are many apps and other sources that will provide complete up to date information about the latest silver price in the market and you can use them on your mobile phone to get the exact details.
  • This will be handy during your purchase and you can expect to save some money during the transaction.
  • This is true even when you are selling silver and you will be able to get a good price for your investment.

7. Try Not to Buy Everything in One Go

You can never predict the future price of any commodity and you should always buy them in installments so that you will be able to get the average price over a period of time.

8. Do not hesitate to Sell When Prices Are High

Just because you have chosen it as a long-term investment does not mean that you should hold them for the entire duration.

  • Be practical and sell it off when you are getting good prices against it. Remember that you can always buy them back at a later stage when the prices fall down. This implies that you will keep making money due to the price fluctuation/variation in the market.
  • For this purpose, you need to compare the silver prices in different regions of the country and this will give you a fair idea about where you can get the best deal in the market.

9. Always Have Reserve Cash for Good Deals

If you plan to invest few lakhs into this commodity, make sure that you have at least 20 percent cash reserves for emergency deals. And you can use these reserves to get good returns on investments at a later stage.

10. Keep Track of Global Financial Markets

Always remember that global financial markets impact the price of silver in India. Depending on the market you will see a rise or downfall in other global markets as well. And this has a direct influence on the pricing of silver.

You need to be aware of such movements in the market and plan your investments accordingly.

Over to you!

You can follow the above mentioned guidelines to get some profit out of this commodity in the long run. You can also consult a reputed financial advisor when you plan to invest in silver for many years. They can explain the entire pros and cons of your investment plan and guide you to choose the right options suited for your risk profile. In this way, making good money out of your investment becomes an easy task and you will be happy to invest money in such commodities in the future.


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