How to Buy Silver in India

Silver has long been used as a form of money and as a metal of great value for many thousands of years. Its popularity gave rise to the Silver standard, a system in which the value of currencies was defined in terms of silver. Even though the silver standard was dropped by many nations, its value in the present-day world still is the same and hasn’t diminished.

Silver’s popularity is driven by its affordability as an investment option. It also gives a fairly decent return to its investors. If one finds it difficult to invest in other precious metals like Gold due to its price, they can opt for silver.

Silver popularity as an investment option can be judged by the fact that India is one of the top 20 silver producing countries in the world, as per the World Silver Survey of 2018.

What Does Investing in Silver Mean?

Investing in silver means to put in money in the production, trading, or ownership of silver. In India silver is owned in the form of silver bullions in coins and bars.

Like most precious metals, the price of silver is driven by market forces. Silver’s MCX price and value are mainly determined by its demand as a form of investment.

Why Invest in Silver?

  • Getting started to invest in silver is very easy. Physical forms of silver like coins can easily be purchased from banks and jewelers near you. For small size investors, this is a big boon.
  • Storage of physical silver is easy as well. You can buy silver jewelry and silver coins and store them at your home. There is no need to worry as you would when storing gold jewelry.
  • Silver is used a lot in industries around the world. In the year 2017, industries consumed 59% of the total silver produced. If you have any paper forms of silver investments with you, the future looks good for you. Since silver mcx price is determined mainly by the market, this is a trend that will help all silver investors.
  • Silver is relatively less risky. If you have invested in silver in the form of a portfolio, this is good news for you because silver will help to mitigate your portfolio’s risk. This is mainly because MCX silver’s prices don’t fluctuate in value too much.
  • There are many ways you can invest in silver. If you wish to go by the traditional route, buy silver bars, silver coins, and silver jewelry. Buy them and sell them when you need to. If you would rather not deal with physical silver, there are paper forms of silver too like silver futures, NSEL and many more.

How to Invest in Silver?

Physical Silver

  • Bullion:Bullion refers to buying of precious metals in bulk. Like buying gold bars or silver bars is bullion. Silver bullions refer to silver, which is around 99.5% pure. This is further melted into bars and coins. Silver bullion will not have any impurities and are called parted bullions while bullions with impurities are called un-parted bullions.
    Silver bullions are traded in the commodities market. Silver bullions are also available in the form of coins, but they generally are more expensive than silver bullion bars.
  • Silver Jewelry:Silver as a form of jewelry is also well known mainly because it is more affordable than gold.
    Whether or not your silver jewelry is the right investment will depend on the price you paid for it. Care should be taken to note that if a silver bar is being used to make jewelry, there is bound to be loss in value of the silver.
  • Silver Coins:Another form of physical silver investment is silver coins. This is a preferred investment option for many middle-class families as they are easy to purchase and can be easily stored at home.
    Silver coins are perfect as small investments. Price-wise they are more expensive than silver bars as the price of labor of making the coins, imprinting images and letters on them are added to the final price.
    One very attractive advantage of silver coins is that you can buy them at banks and from reputed jewelers near you. You can buy them when you can and liquidate them later when you need to.

Paper Silver

  • Digital Silver on National Spot Exchange:A relatively new player in the market, they have introduced a new way of investing in silver. An innovation of the National Spot Exchange is digital silver or e-silver that lets investors put in their money in smaller chunks and hold their purchase in a Demat form.
    They are available for purchase on the national spot exchange trading platform which can be accessed by members of NSEL or franchises. It is required for any prospective clients to open up their depositary accounts with these members to be able to start the investment process. NSEL also has an option to make your investments in the form of physical silver.
  • Commodity Futures: Another form of investing in paper form of silver is through the commodities market. You can trade in commodities futures in the commodities market.
    To start doing so, you need to put in a special request to your broker and ask them to invest in exchanges like MCX and NCDEX. These exchanges have silver futures also that you can avail of.
    One disadvantage of this investment form is that it is heavy. The price is slightly higher than the price of physical silver, and one has to pay a certain portion of the entire value of the contract beforehand.
    This form of investments relies heavily on market movements. You can sell your contracts at a later date and get a higher profit.
  • Milestone Bullion Series 1:A new launch from Milestone Capital is one of a kind portfolio investment. It is very much like investing in a mutual fund.
    In Milestone Bullion Series 1, investors get the opportunity to invest in several different metals: silver, gold deposit schemes, and gold-linked structure.
    This is a structured product, and the minimum investment required to get into this product is Rs.5 lakhs. The money is then invested in the following proportions:
    • Silver: 40%;  
    • Gold Deposits: 40%;  
    • Gold linked structure: 30%

 The fee structure that is charged is as follows:

  • One time fee of 2% or @2.5% if the investment is less than Rs.10 lakhs
  • Annual fund management fee of 1.5% of the total committed amount.

This form of investment is meant for high net worth individuals who are willing to invest a large sum of money, but if one does make the large initial investment amount, they can enjoy the benefits of a diversified portfolio.

Final Words

Buying silver is easy. From your bank branch or your neighborhood jeweler, what needs is to pay attention to the silver MCX price. To get the maximum returns on your investment, MCX silver price needs to be tracked on the market.

Many experienced financial advisors can help you plan and invest your money in the right form of silver. Do your research before diving into the silver world.


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