Bullion Coins and Numismatic Coins

What You Need to Know

So you’re looking to purchase coins and you’re trying to decide between bullion and numismatics. But what’s the difference? Here, we will break down what distinguishes these two types of coins and how these factors will impact your purchase so that you can make the most informed decision that best suits your specific needs.

Now that you’ve arrived at the point of making a purchase, you probably already know the basic definition for both. In a general sense, the latter simply means of or relating to coins, paper currency, or medals, but in this case, it when we mention it, we are referring to their rarity.

Numismatic Coins

These coins are prized for their rarity and collectibility. The content and purity of their metal content are not as important as their historical worth or their potential collectibility along with the condition and mintage of the coin.

Here are some great examples:

For the most part, they are sold for a higher premium than the spot price of what their metal is trading on that day. Because they are coins that could have been certified and graded and/or are no longer being produced, this makes them more scarce and sought after by collectors who desire specific dates or mint marks to complete their collections.

Instead of deriving their value from the price of the precious metal content, the history and rarity of these coins offer a value entirely separate from the intrinsic value of the metal. One important note is that coins that are considered to be numismatic are NOT ELIGIBLE for Precious Metals IRA plans, unlike certain bullion coins.

Bullion Coins

Bullion coins fulfill investment purposes and can potentially act as a hedge against inflation during volatile market conditions. The main part of the value of bullion coins comes from the metal content of the metal used in their creation. When you purchase a bullion coin, you will only pay a small premium over the spot price of the precious metal.

Here are some examples of popular bullion coins:

Which is Right for You?

Before you move forward, consider what it is that you are looking for from this purchase. Is it history or popularity? Long-term value or short-term investment? Are you looking to add something to your Precious Metals IRA?

Individuals who buy bullion for investment purposes believe that the price of the precious metal will go up significantly and use that as an opportunity to make a profit. On the other hand, collectors who buy numismatic coins believe that regardless of the price of precious metals decreasing significantly, the qualities of their collections will perpetually increase.

For the most part, these specific coins are ideal for hobbyists and collectors and bullion coins are the best fit for investors. If you purchase a rare coin, it’s a good rule of thumb to plan on holding onto it for about 5- 10 years at least before considering selling it. This fact paired with their ineligibility for IRA plans means that coins with a numismatic value are the better purchase for those looking for long-term investments or as a way of enjoying the hobby of coin collecting. One thing to keep in mind as well is that just because a certain graded or rare coin may be valued at a very large price, they are not easily liquidated - you have to find a collector willing to pay that specific price for the coin which can be both tricky and time-consuming. A common way that collectors go about selling their graded coins or coins that are no longer being minted is by taking them to a reputable auction house like Heritage Auctions, Stacks & Bowers, Christie's, & Sotheby's to name a few, in order to buy and sell some of their highly collectible coins. Some people even use eBay to buy and sell their collections too.

Time to Act

Now that you’re up on the difference between the two types coins, we leave you with one final important point: there’s no reason you can’t have both! They both each bring their own unique benefits and appeal to your collection. Use this information to make the most informed decisions regarding your purchases.

Learn more about this and other topics by visiting our Bullion Exchanges Learning Center. If you have any questions or suggestions, please email us at [email protected]