Investment Coins or a Deposit: What is better?

Money should work. That is the only way it can generate income and help preserve the purchasing power of your savings. Today, there are many instruments available for this — from classic bank deposits to investments in precious metals. In this article, I’ll take a closer look at what investment coins are, whether they are worth considering, or whether it is better to open a deposit and earn passive income.

Investment coins are coins made of precious metals of the highest purity. They are designed for investment and capital preservation rather than use as a means of payment.

Their key characteristics:

• Material: gold, silver (platinum or palladium) of the highest purity. In Ukraine — 999.9 for both gold and silver.
• The face value is lower than the actual market value of the metal contained in the coin.
• Simple design and minted in large quantities.

Essentially, an investment coin is precious metal in a convenient form for storage and circulation. Unlike jewellery, it does not require any special care or, apart from a safe, special storage conditions.

Of course, you should handle them carefully to avoid damage or scratches. It is best to keep them in their original capsules.

How investment coins work:

1. Purchase from a bank.
2. The coin sits in a safe, warming your heart. You can hold it in your hands and feel like Scrooge McDuck.
3. The price of gold on the global market increases, and the investor makes a profit. The coin can then be sold to a bank or a private buyer.

Over the long term, precious metals often show a tendency to increase in value, although their prices can fluctuate significantly depending on global market conditions. Therefore, investment coins can be a good way to protect against inflation, currency depreciation and economic crises.

Investment and commemorative coins are two different types of precious-metal products. Although both can contain gold or silver, their purpose, characteristics and potential profitability are different.

Commemorative coins have artistic value, limited mintages and intricate designs. They are purchased by collectors, while their potential price appreciation depends on both the metal and their numismatic appeal.

Investment coins are primarily precious metal, while commemorative coins are collectible artefacts.

Commemorative coins primarily have collectible value. Their price depends on:

• the value of the metal;
• the size of the mintage;
• artistic design;
• historical significance;
• demand among numismatists — which is almost the main factor determining their price.

Their investment component is weaker, they are more difficult to sell and their price growth is less predictable compared with investment coins. They are more of a hobby than a reliable investment instrument.

Investment coins are a reliable way to protect savings from inflation, currency depreciation and economic crises. Their price is linked to the global value of the metal. Their advantages include:

• a physical asset;
• relatively high liquidity;
• portability;
• the historical stability of precious metals.

The disadvantages include relatively low returns over a short period and storage costs for precious metals. Such coins do not pay interest like a deposit, but they can preserve the real value of the funds invested.

In Ukraine, investment coins are issued by the National Bank of Ukraine. They are minted from gold and silver with a purity of 999.9.

Currently, the main series of Ukrainian investment coins is the “Archangel Michael” series. It has been issued since 2011. The coins are available in both gold and silver. Silver coins cost less than gold ones, which makes them attractive to first-time investors.

Key features of the series:

• high metal purity (999.9);
• face value significantly lower than the actual value;
• Uncirculated minting quality.

The main advantages of these coins are that they are physical assets, have a relatively predictable price trend and are convenient to store. The NBU has also issued the silver investment coin “30 Years of Independence of Ukraine”.

The first silver investment coins went on sale in 2012. The NBU issues them with a face value of UAH 1.

One feature of silver investment coins is that silver is more volatile than gold. During periods of economic growth, its price can rise faster due to strong industrial demand, although during downturns it can also fall more significantly. At the same time, silver coins remain a more affordable option for investors who want to acquire precious metal with a lower initial investment.

NBU investment coins can be purchased from:

• the official NBU online store for numismatic products;
• distributor banks;
• specialised dealers and trusted platforms (such as Violity and Crafta).

A bank deposit is the most common way to save money. You place your funds with a bank for a certain period, and the bank pays you interest.

A deposit is suitable for short-term savings with minimal risk. For long-term capital protection, it is better to combine it with other instruments. It is ideal for conservative savers who value stability and minimal risk.

Both deposits and investment coins are established investment instruments. To generate a return, you will need to wait for a certain period, so I recommend carefully considering the returns and risks associated with both methods of preserving and growing your money. I have summarised all the information you need in the table below.

Precious metals have traditionally been considered one of the ways to preserve the purchasing power of money over the long term, although their prices can rise or fall depending on global market conditions.

Bank deposits provide a more predictable return thanks to a fixed interest rate. At the same time, they only partially offset the impact of inflation if the deposit rate exceeds the inflation rate.

A bank deposit is significantly easier for beginners. It can be opened online in 5 minutes, offers straightforward interest rates, minimal risks and a government guarantee.

Investment coins, on the other hand, require an understanding of the precious metals market, choosing the right time to buy or sell, and proper storage. For beginners, it is better to start with a deposit and later, if desired, expand the range of investment instruments.

So, is it worth buying investment coins? The answer depends on the goals you have for your savings. If your aim is to preserve part of your capital over the long term and add an asset to your portfolio that is not directly dependent on the banking system, NBU investment coins may be one possible option.

Gold coins traditionally have the greatest demand among investors due to the high value of the metal in a compact physical format. At the same time, it is important to remember that returns from such assets are usually not generated immediately, as the prices of gold and silver are influenced by conditions on global markets.

Before buying, you should consider all the relevant factors: the difference between the purchase and selling prices, storage costs and how well this instrument fits your financial plans.

An effective capital preservation strategy involves sensible portfolio diversification. Combining a bank deposit with investment coins can provide both stability and protection against inflation.

My recommendations:

• 40–60% — in a deposit. This provides stability, quick access to your money and guaranteed income. Choose deposits that allow additional contributions and offer interest capitalisation.
• 10–25% — in investment coins for long-term capital preservation and portfolio diversification. The remaining funds can be allocated among other assets according to your financial goals and risk tolerance.

To maintain a steady income, review your investment portfolio once or twice a year. Buy coins gradually and keep an eye on precious metal prices on international exchanges.

Translation into English was created with the help of artificial intelligence.