Explained: Why Do People Choose to Get Coins Graded?

Coins are evaluated based on their rarity, cost, and condition, with a higher condition contributing to a higher coin worth. When a coin is auctioned or sold by a dealer, there is an incentive for them to portray the coin as being in the highest possible grade to maximize its value.

Many collectors lack the knowledge or experience to assess the grade of a coin, even though coin grading services have been in existence since the 1980s. The two largest grading services, NGC and PCGS, have collectively graded nearly 70 million coins over the past 30 years.

It's important to note that these grading services do not appraise the coins or assign them a specific value. Instead, they provide a numerical grade, and the market determines the coin's value based on that grade.

Not All Coins Are Worth Grading

The most common question we receive from first-time buyers and sellers is, "Should I get my coin graded?" The short answer is that it simply depends on the current value of your coin and what its value would be once graded.

Example: You possess a 1920 1 Rupee George V Silver coin in what appears to be mint state condition. This coin likely sells ungraded for about Rs 1000 (assuming silver is at Rs 500 per 10 grams). Here's the potential value of the coin in various grades if graded by PCGS or NGC: MS60 - Rs 1800, MS61 - Rs 1900, MS62 - Rs 2100, MS63 - Rs 2300, MS64 - Rs 2500, MS65 - Rs 3000, MS66 - Rs 4000, MS67 - Rs 7500.

In the example provided, you're essentially aiming for a return on your (at least) Rs 2000 grading fees, but only if the coin grades as MS65 or higher. However, there's no guarantee that the coin will achieve MS65 or higher; in fact, what you believe to be in mint state may end up being graded as AU (About Uncirculated). Of course, if you happen to have an exceptional coin and it grades as a 66 or 67, the return on your investment could be substantial. In the scenario where a batch of 100 very well-preserved uncirculated 1920 1 Rupee George V coins is submitted, the expected outcome is likely to consist mainly of MS63s and MS64s, with perhaps four to six coins falling into the MS65 and MS66 range.

If your coin is composed of brass or copper, they are characterized by suffix strike characters such as RD (Red), RB (Red Brown), and BN (Brown), where RD denotes the highest rank and BN the lowest.

Getting a Coin Graded Doesn't Automatically Increase Its Value

The prevailing misconception about grading is that assigning a grade to a coin automatically increases its value compared to being ungraded. For instance, having a visually appealing XF 1/4 Anna doesn't inherently gain more worth simply because PCGS/NGC designates it as an XF 40 and encases it in a sealed holder. The primary effect is that the coin becomes more marketable due to certification. While there are exceptional cases where an exceptionally high grade significantly elevates a coin's value, the majority of coins are graded to facilitate a mutual agreement on value between the buyer and seller. This consensus is typically based on prior sales prices of coins in the same grade.