Junk Silver Coins are coins which are composed of the precious metal but are associated with little or no numismatic worth. As such, their value is solely based on the fact that each is struck from silver.
Junk Silver Coins are typically considered an investment option by those in the trade and are not sought after for their condition or rarity. As such, they are bundled together with other similar silver coins and sold for an amount based on the current market price of the silver contained within them – also known as melt value.
Pre-1965 American dimes, quarters, half dollars and dollars struck by the United States Mint were each composed of 90% silver and 10% copper. It is typically these coins that are being talked about when using the term of "Junk Silver." Examples of such include, but are not limited to: Mercury Dimes struck from 1916-1945, Roosevelt Dimes struck from 1946-1964, Washington Quarters struck from 1932-1964 and Franklin Half Dollars struck from 1948-1963.
Obviously some of the strikes previously mentioned would have a higher numismatic value than any melt value associated with them, especially if they are one with an extremely low original mintage. However, most of the strikes within this time period featured mintages in the millions so those that were in circulation and show the associated wear and tear would not typically be sought after by most collectors.
These Junk Silver Coins are then bundled together based on the total face value of the coins. Dealers typically work with bags featuring a $1,000 face value but retailers at times will offer bags with lower face values such as $500, $250, $100 or even $50.
By knowing the face value of the junk silver coins, one can easily determine how much actual silver is contained within them. That is because the US Mint struck each silver coin with a proportional amount of the precious metal. For instance, silver dollars were each originally struck with a net weight of 0.77344 ounces of silver. Dimes were originally struck with 1/10th that amount, or 0.07234 ounces. So ten dimes has approximately the same amount of silver in them as a silver dollar does.
Thus, if you had a $1,000 face value bag of junk silver coins in your possession, it would contain approximately 715 ounces of silver. The 715 ounces accounts for the wear and tear on the coins within which would have typically lost miniscule amounts of the precious metal as they would have been used in circulation.
That 715 figure can be adjusted depending on the actual make-up of the coins within. Larger coins such as the dollars and half dollars would have typically lost less silver in circulation so they are given a premium over the smaller quarters and dimes.
Junk Silver Coins are a favorite of many who like the liquidity of the investment as they are relatively easy to buy and sell. In addition, larger bags can easily be broken up into smaller lots. Finally, as these coins are still legal tender of the United States, each retains its face value for use in everyday commerce transactions, if needed.
Those looking to purchase junk silver coins should expect to pay a premium over the current spot for silver. Those opting to sell should expect to receive slightly less.