How to Redeem a Stock Certificate

In this electronic age, market investors seldom ends up with an actual stock certificate that they can hold in their hand, but it occasionally still happens. Often stock certificates are inherited as part of an estate.Many people believe that the company that originally issued the certificate is responsible for redeeming it, but that is not the case. Once a company sells a share of stock the company is not required to make a market for that security and it is not required to buy back your stock.Occasionally a company will buy back its own stock. If your stock certificate is from a company that is currently buying back its stock, then it is possible that the company will elect to purchase your certificate(s)--but always keep in mind that they are not required to do so under any circumstances.The only way you can be certain of selling your stock certificate is to open a trading account with a stock broker, endorse the back of your certificate, and deposit your certificate(s) into your trading account. Once you have done that then you can sell your stock in the normal course of everyday trading--although you will be required to pay the standard broker's commission.

Things You'll Need

• Stock certificate
• Trading account with a stock broker

Instructions

1. Open a trading account with a stock broker if you do not already have an account. Check around and compare fees and minimum balance requirements before opening your account and choose the broker that is best suited to your needs and budget.

2. Consult with a broker at the firm handling your account. Let the broker know that you wish to deposit stock certificates into your trading account with the goal of selling them. There may be a little paperwork that the broker will send you and ask that you sign.

3. Sign (endorse) the back of your stock certificate and mail it or hand carry it into your broker's office with explicit instructions that the certificate(s) are to be placed into your trading account in order to be sold.

4. Instruct your broker to sell your certificates. You can instruct your broker to sell "at market," meaning your shares will be sold for whatever price the market sets at the moment your broker places your shares up for sale, or you may specify a particular price you wish to receive for your shares (this is known as a limit order). You may place any value you wish on your shares, but keep in mind that they may not sell right away if they are priced too far above the current market price.

Tips & Warnings

• Do not be intimidated about selling your certificates. If you have a trading account or if you open an account a broker can easily walk you through the simple steps necessary to deposit the shares into your account and sell them.

• Unless your shares are for a very arcane company, a market should exist for your certificates which will allow them to be sold in a matter of minutes once they are deposited into your trading account and you have requested that they be sold.

• Consult with your broker regarding the amount of time needed for funds to be cleared before you can withdraw the proceeds of your sale. Some brokers require 72 business hours for funds to transfer and clear.

• If mailing your certificates send them via registered mail and require that they be signed for.