Types of Coins

There are two main coin types, circulated and uncirculated. There are many ways that you can tell the difference between the two of them. If you are considering collecting coins to one day sell on, then you will need to know the difference between these two types of coins; one can be a lot more valuable than the other.

Circulated Coins

Any coin that has entered circulation, even if it is a proof coin, will be classed as a circulated coin. Circulation is when a coin is used for transactions and will make its way from person to person. An officially appointed mint will produce coins for circulation.

There are many ways that you can tell if a coin has entered circulation. One of the biggest tell-tale signs is if you can see some obvious wear on the coin. This can be in the form of scratches or only a few details still visible.

Circulated coins are typically only worth their face value. Only very rare circulated coins will be worth more than face value, and sometimes this isn’t even a considerable amount more.

Uncirculated Coins

Although you might believe that uncirculated coins will have zero damage on them, as they have never been through circulation, this isn’t always the case. Some uncirculated coins will have small contact marks. Travelling in mint bags and making contact with other coins within the mint bag commonly cause these marks.

Proof coins are normally produced for collections and are not intended for circulation. Regular coins will be struck once under a normal pressure and a high rate of speed. Proof coins are usually struck at least twice under a high pressure; this is to bring out all of the details in the design. The background of a proof coin will generally look mirror-like.

Many uncirculated coins will be worth more than circulated, mainly due to them being in near mint condition.

Bi-metallic Coins

Also part of the mixed metals category, are those which are made from two (bi) metals or alloys. While there are different types, the most common arrangement features an outer ring with a contrasting centre. Common examples in circulation include the British £2 as well as €1 and €2.

The earliest known examples date back to the 17th century, and during the Roman Empire large medallions with bronze or copper centres and contrasting outer rings were issued on special occasions.

For coins in circulation, bi-metallic coins tend to be reserved for high denominations and are used primarily to help prevent counterfeiting as they are more expensive and challenging to mass produce.

Bullion Coins

Some people are collectors, others are investors, but a true coin enthusiast should be a little of both. Precious metals such as gold and silver have been recognised as valuable for many years, and today they still hold a firm place in a savvy collector’s portfolio.

Bullion coins are very popular amongst those looking to make a modest outlay to preserve their capital in precious metal. They can be purchased from major banks, coin dealers and manufacturers.

Bullion coins are always a very attractive purchase due to their intrinsic metal value and bullion with a reverse frosted finish appears to have gained popularity recently. Reverse frosted bullion coins are struck in the same manner as standard bullion coins, except that some areas of the design are frosty and others are mirror-like finish hence the attractiveness.

Although bullion coins are usually made from gold and silver, they can also be found in platinum and palladium.

What type should I buy?

Depending on what your collection is for, hobby or investment, the type of coin you collect is important. It will also depend on the theme you decide to follow with your coins, more historic coins will be difficult to find as uncirculated, although novelty coins will be easier to find in uncirculated form.

If you are thinking about starting a coin collection with the hopes of selling it on at a later date for a profit then it should be made up of uncirculated coins. The better condition the coins in the collection are, the more the collection will go for.

Uncirculated coins often have next to no damage on them. The most ideal uncirculated coins to have in your collection are those that are graded Fine or above.

The best grade of coin to get for your collection, especially if you are looking to one day sell it on, is Brilliant Uncirculated (BU). This means that the coin is not only uncirculated but it is in the best form it can be and still has its original mint luster (colour).

Historic coins can be incredibly difficult to find and even though it will be hard to find a historic coin in uncirculated form, that doesn’t mean they won’t still be worth a lot. Although these coins might be classed as rare and worth more than their face value would be, to get the full value of the coin they still need to be in the best condition the can be.

Novelty coins are some of the easiest coins to collect. They are mainly produced for collections with the majority of them coming in their own presentation packaging. This packaging will help to protect the coin while it is being dispatched to you, meaning less, if any, contact marks on the coin and a better chance of the coin being worth more in the future.

You will usually find circulated coins rather than buying them like you would with uncirculated coins. Depending on your collection you might occasionally have to purchase the odd circulated coin.