How to Buy Silver Online

By eHow Contributor
Buy Silver Online
Kitco.com

Buying silver online is not difficult. Investing in silver is growing in popularity. Now there are easy ways to buy silver on the internet. Here's how to buy or invest in silver online.

Decide how to purchase the silver. There are multiple ways that you can buy silver online. Each has benefits and disadvantages.

(1) You can buy physical silver (e.g., silver coins or silver bars) online from a gold/silver dealer. The dealer then sends you the physical silver for you to hold.

(2) You can buy a silver ETF or ETN in your stock brokerage account. You buy and sell silver ETFs and ETNs just like you would buy any other stock or ETF.

(3) You can buy an ownership in silver bullion online from a holding company. The company stores and holds your physical silver for you (for a small commission). You can sell your silver back to the company online whenever you want.

(4) You can buy silver futures on a futures exchange.

Understand the different factors impacting the valuation of physical silver coins. A coin has value for at least two separate reasons. First, a coin made of silver has value due to the content of the silver in the coin ("the content value"). The more silver contained in the coin, the more that the coin will be worth (all other things being equal). Second, there may be a numismatic value to the coin. This is the value assigned to the relative rarity of the coin, and the investor interest in that particular coin (apart from just the silver in it). If you are just interested in investing in silver, and you are not a coin collector, then stick to buying more common coins. It is easier to buy and sell more common coins, and the value of the coin will track the price of silver more closely than a coin which is also valued for being a collector's item.

If you want to buy a silver ETF or ETN, understand how they are taxed. Not all silver ETFs are taxed the same. Silver ETFs use different methods to invest in silver. This means that they have different tax consequences. Consult with a tax adviser or financial planner if need be.