5 Reasons You Should Never Bring Rare Coins to the Bank

Numismatic coins with magnifying glass

When you walk into the branch of your local bank, you might be coming into the facility with bills of certain amounts and coins that are of varying degrees of what they are worth. But if you have a rare coin — ones that have historical significance and have only increased in value over time — you might not want to hand it over to a bank teller.

Find Out: 8 Rare Coins Worth Millions That Are Highly Coveted by Coin Collectors

“If you take your rare coins to a commercial bank, your bank teller is unlikely to be a trained numismatist,” said Kevin Huffman, a personal finance specialist with extensive experience in banking who is now the owner of Kriminil Trading.

Huffman provides some insights on the pitfalls of trying to bring valuable coins to a bank and a few tips for what rare coin collectors might do instead.

No Specialized Insurance Coverage

Banks can usually insure customers’ money utilizing FDIC coverage for up to $250,000, but that typically does not apply to rare coinage.

“Banks generally provide limited insurance coverage for contents in safety deposit boxes, often excluding high-value items like rare coins,” said Ryan Jacobs, the founder and managing partner of Jacobs Investment Management. “It’s essential to have specialized insurance for collectibles, which banks typically don’t offer. Relying on a bank’s basic coverage could leave you underinsured in case of theft or damage.”

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Limited Purchase Options

With most major financial institutions, the goal is to take your small amount of personal money and turn it into a large sum that can be used for a variety of purposes. This only applies, however, to modern currency and financial tools.

Because a lot of banks tend to deal only in cash and standard financial instruments, Huffman strongly cautioned that the average local branch might not be interested in purchasing rare coins outright from you, mostly because there is no business they can actually do with them.

Lack of Education

Huffman noted that a bank teller might not be able to recognize rare coins when they are brought in by a customer. What might look like the typical penny, nickel, dime or quarter could actually be a hard to come by find that gets sorted with the rest of the coinage at the bank.

“If so, you could risk having your rare coins undervalued, and that could cost you a lot of money,” Huffman said.

Lori Gravitt, an assistant vice president and branch manager at Addition Financial Credit Union, said one of the main reasons you should not bring rare coins to the bank starts with the bank only giving you face value for the coin.

“Hand a teller a rare quarter that is all they will give you back for it. Coins that are collectible are valued on their rarity. The employees at the bank handling your coins are not experts on the coin values,” Gravitt stated, advising that it would be better suited in the hands of a coin dealer instead of a teller. “They know how to inspect and assess the value. At times banks/credit unions require coin to be rolled or charge a few to exchange them.”

Accessibility to Your Coins

While safety deposit boxes can be a great way to store your valuable rare coins, customers do not have 24/7 access to them and might need to get inside at a moment’s notice.

Diane P. Rapanotti of The Roamin’ Roman in Cabot, Arizona, explained, “The drawback is a bank safe deposit box is generally not available [on] weekends or holidays.”

“Storing your rare coins or bullion coins in a bank is not convenient to view and enjoy your collection, so the option is to take images of the items so you can view them anytime,” added Tom Caldwell of Northeast Numismatics in Concord, Massachusetts.

Security and Storage

Rare coins can be very valuable and, oftentimes, irreplaceable. Banks often don’t have adequate security arrangements for such goods, in Huffman’s opinion.

“If your coins aren’t immediately recognized for what they are, your coins could be stolen or lost during the delivery process,” Huffman pointed out.

Caldwell drew a similar comparison to bullion depositories, where in events in the last few years “with third-party depositories there may be a chance of them going bad and you may be out of luck.”

“I never recommend third-party (depository) storage unless it is a qualified IRA account. The annual costs are high. Generally, your items are not immediately accessible due to documentation and signatory requirements,” Rapanotti added.

Solutions To Storing Your Rare Coins Instead of a Bank

Here are some other options for your coin needs.

Professional Coin Grading Services

“There are a number of reputable coin grading services that will examine and grade your coins for you,” Huffman suggested.

These companies employ numismatic experts who will validate your coins and assign them grades,” Huffman went on to describe, saying the coins “overall being graded substantially increases their value.”

Coin Dealers and Auction Houses 

Professional coin dealers sell coins as a way of making their living and they can tell you what your collection is worth and will pay a going rate for it.

“Auction houses are also good for high-value collections, in which you will get all the bidders going to try to top each other which can increase your final price,” Huffman noted.

Online Coin Marketplaces

Huffman pointed out there are also certain online marketplaces that are created for only one purpose: to sell rare coins.

“Here, you will reach a larger audience of coin collectors all around the world that might secure you a nice price for your coin,” Huffman stated. “Therefore, if you are aiming to make some money off your coin, the internet is also a useful tool for that. Careful research and thorough verification of the buyer are essential.”

“Don’t forget — rare coins can be a good investment!” Huffman said.

“Doing your homework by finding a qualified appraiser or buyer can ensure a good return on your collection,” Huffman said. “Consider consulting a financial planner who can work with this facet of your financial life to help you secure your financial future.”

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This article originally appeared on GOBankingRates.com: 5 Reasons You Should Never Bring Rare Coins to the Bank