Physical Silver vs. The Bank: The “Break-Even” Reality

Many people buy physical silver as a hedge against uncertainty, but few stop to calculate the “math of the spread.”

Physical Silver vs. The Bank

When you buy a 1 oz generic silver round today, you aren’t just buying metal; you are paying for the manufacturing, shipping, and the dealer’s profit. Let’s look at the numbers for February 13, 2026

Physical Silver vs. The Bank: The “Break-Even” Reality

The Buy-Sell Gap

Right now, the silver spot price is roughly $77.57. If you walk into a shop to buy a generic 1 oz silver round (like a Buffalo or a simple Liberty design), you will likely pay a premium of about $6.00 over spot. This brings your out-of-pocket cost to roughly **$83.57.**

The “real challenge” begins the moment you want to sell. Unlike some government coins that carry high resale premiums, generic silver rounds are typically bought back by dealers at “back of spot”—meaning less than the current market price. Today, a dealer might offer you roughly $72.00 for that same round. You are effectively starting your investment $11.57 in the hole.

Silver vs. The Guaranteed CD

You also must consider the opportunity cost. If you took that same $83.57 today and, instead of a silver round, put it into a 1-year High-Yield Certificate of Deposit (CD), your money would be guaranteed to grow. Currently, top-tier 1-year CDs are paying roughly 4.10% APY.

The 1-Year Comparison (Assuming Prices Stay Flat):

*Based on a typical “back of spot” dealer buyback.

What has to happen to “Break Even”?

For your silver round to simply be worth what you paid for it ($83.57), the spot price of silver needs to climb significantly. If a dealer pays you $5.50 under spot, silver would need to hit **$89.07** just for you to get your initial $83.57 back. That is a 15% increase just to break even.

If you want to actually beat the CD, silver would need to climb to roughly $92.50—a 19% increase in one year.

The Takeaway: Physical silver isn’t a “savings account.” It’s a bold bet on the market. Before you buy, ask yourself: Am I looking for a guaranteed 4% return, or am I betting that silver will rally 20% this year?

Disclaimer: This post is for informational and entertainment purposes only. It is not financial, investment, or legal advice. Precious metals prices are highly volatile and can change dramatically. Past performance does not predict future results. Always do your own research, consult a qualified financial advisor, and never invest more than you can afford to lose. The author is not responsible for any decisions based on this post.

Physical Silver vs. The Bank: The “Break-Even” Reality

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