Selling a paper stock certificate requires some work

ByABC News
May 19, 2009, 5:21 PM

— -- Q: What is the cheapest way to sell a stock certificate that's in my possession?

A: I've been getting this question quite a bit lately. I'm not sure why so many people suddenly are holding paper stock certificates rather than letting a broker hold them for you.

Getting rid of stock certificates isn't hard, but it does require some leg work. The easiest way to make the sale is to set up an account with an online brokerage firm. If you have at least $25,000 to invest, Zecco.com offers free trades. If you have less than that, TradeKing.com offers trades for $5. Either way, the commissions at most online brokerage firms are reasonable.

Next, you need to get the certificate to the brokerage firm. Most stock certificates have a place on the back where you sign to transfer ownership. Call your online brokerage firm and ask if they need you to sign the certificate in any particular way.

Then you have to mail the certificate to the brokerage firm. Most online brokers will provide a mailing address on their website, but again, it's safest to ask. Finally, mail the certificate from the nearest Post Office and be sure to pay extra for certified mail and perhaps insurance, depending on the value of the stock.

Once the certificate arrives at the brokerage firm, it could take a few days before the shares are credited to your account. Once the position shows up, you can sell the stock, remembering that you'll need to pay the commission. There may also be tax considerations when you sell, a topic covered extensively in the Ask Matt archives, such as here.

After you sell the stock, it generally takes about three days before the trade settles and the cash is deposited to your online brokerage account. Once it's there, you need to transfer it to a place you can access it. Most online brokerages will let you set up free cash transfers between your brokerage account and a bank checking account. After you execute the transfer, you should have the money sitting in your checking account.