Your Guide to Buying Physical Stock Certificates

21st May 2022

Your Guide to Buying Physical Stock Certificates

According to some research, 56% of Americans own stocks. However, most stock certificates are now electronic, but you can still find physical stock certificates.

If you're interested in buying physical stock certificates, the process will be different from purchasing electronic stocks.

Keep reading to learn all the benefits of owning these stock certificates and how to get them.

What Are Stock Certificates?

Stock certificates used to be more prevalent than they are today because electronic stocks are becoming more popular. They were popular before there were computerized trading systems.

However, you used to have to call a broker and tell them to buy a certain amount of shares for such a company. Once the transaction went through, they would send you a stock certificate.

These were paper documents that came from companies for their shareholders. It was proof that you owned the stock, which would have important information on it.

Some of the information on the stock included the date you purchased it, how many shares you own, your name, the type of stock you own, and the signature of the representative who was authorized to give you the stock certificate. There may also be a unique number that will identify that transaction.

If you ever wanted to sell those shares, you would have to bring your certificate to the stockbroker. Then the broker would take the certificate back to the company to sell it back to them.

Benefits of Stock Certificates

While this sounds like an outdated process, there are still a few benefits to owning these stock certificates, so many people may still want the certificate.

It is physical evidence that you own part of a business. It's printed with your name and other important information, but keep in mind that this isn't the stock itself. Instead, it's just proof that you own shares in the company.

Having this physical record can be necessary for any legal purposes as well. If you are ever in a problem where you are disputing your stock ownership, this can be helpful to prove that you do have it.

If you die, legal advisors and your family can also use this certificate to show that you did legally own that stock. In some cases, you may even be able to use these certificates to put your stocks up as collateral for any loan.

This is also something great to hang in your office if you're running a business. You can use this to show employees that you can give them a physical piece of the company as well.

Another reason that many people want to have these stock certificates is that they're collectible. You can find many on eBay, but some of them may only be worth a few dollars. However, some older ones can be sold and auctioned off for thousands of dollars.

The value of the old stock certificate will largely depend on what company the certificate was for.

How to Get Stock Certificate

If you're interested in getting a stock certificate today for a stock you own, you'll first need to figure out who the transfer agent is for the company's stock you want to buy. These transfer agents will typically handle these transactions following Securities and Exchange Commission (SEC) laws and regulations.

You'll generally be able to find that contact information on the investor relations website. If you can't find it there, you can find it in the company's annual report.

After you find the agent, contact them. Ask them if the company has a plan where you can directly purchase the stock from them. If they do, you can buy shares directly from the company rather than going through an agency.

You'll likely get a free stock certificate when you buy them directly from the company. Typically, they'll store it for you, but you can request that they send it to you.

If the company doesn't have a direct purchase option, you'll want to verify that they still have stock certificates available when you talk to the transfer agent.

Next, buy the shares through that agent if you can't buy them through a broker. If you buy them through the broker, ask them to transfer the shares to direct registration.

When you get it in direct registration, you'll have the shares in your name, and they'll be registered as the owner.

After that, the transfer agent should let you know when they're registered with you. You can request that they send the shares to you as a paper stock certificate. Sometimes, you might have to pay a fee, but it should be small. In some cases, they give them to you for free.

What to Do If You Find a Certificate

However, another way that you can get a stock certificate is by buying a collectible on eBay. However, you may even find one in a relative's attic.

When you find one of them, make sure that you research the company's name. Find out if they're still in business. If they are still in business, you should contact their investor relations and ask them if they can determine if these certificates are valid.

The company should also be able to tell you if the stocks have any value. In most cases, they were probably exchanged for an electronic share.

Discover More Information About Buying Physical Stock Certificates

These are only a few things to know about buying physical stock certificates, but many other factors to consider.

We know that this is just one of the essential documents you might have, and you'll want to make sure that you organize all of these crucial documents.

If you're looking for organization help, check out our website! We have all kinds of products to help you display and organize your documents.