When someone needs to authenticate the transfer or redemption of: (a) stocks; (b) bonds; (c) mutual funds, or (d) anything defined by the Securities and Exchange Commission as a “security”, most financial institutions impose a Medallion Signature Guarantee for transaction amounts above a certain threshold (usually $25,000, but this varies from institution to institution) in order to avoid any liability that could result from forgery. The medallion guarantee is to stocks and bonds what a notary is to statements and contracts. It is a form of heightened authenticity.
If you have any physical document worth tens of thousands of dollars that you are trying to cash or transfer electronically, it is a sure thing that you will need to obtain a Medallion Signature Guarantee in order to complete the transaction. It should be noted that this is a safeguard measure that the entity cashing or transferring your security establishes, so there is no set rule as to what triggers the requirement.
If you need to get a Medallion signature, you should visit the Medallion Signature Guarantee website and then type in your zip code to find a bank or credit union near you that will provide medallion signatures.
Then, you should call the institution to confirm that it provides the service to non-members and inform them of the amount that of funds being transferred or redeemed. There is a system of codes that vary by amount: Prefix E and F is for banks and credit unions that are guaranteeing a signature in an amount up to $100,000; Prefix D covers $250,000; Prefix C covers $500,000; Prefix B covers $750,000; Prefix A covers $1,000,000; Prefix X covers $2,000,000; Prefix Y covers $5,000,000; and Prefix Z covers $10,000,000.
If you are carrying around stock certificates worth more than $10,000,000 that you are trying to redeem, you will have to also get a special type of guaranty bond through a medallion signature guarantee insurance broker since financial institutions don’t carry insurance coverage in excess of this amount.
Typically, the fee you will pay for a Medallion Signature Guarantee is about $50 for a $100,000 guarantee from a credit union, $75 from a bank, and the cost roughly doubles from there–i.e. if you are transferring $200,000 in stocks, bonds, or other securities, you should expect the Medallion Signature Guarantee to cost you about $100. This is only the fee for the bank guaranteeing your signature–any fees from the transfer/redemption institution will carry an additional charge.
Then, you need to bring your driver’s license and statement of ownership concerning the investment account that is being transferred/redeemed to the financial institution. If you are an executor to an estate or acting on behalf of an elderly relative or minor child, you will also need to bring the death certificate, or letters testamentary, or power of attorney, or proof of guardianship if you are acting on behalf of a third party.
Once you do these things, you will be able to obtain your Medallion Signature and then you can mail in the paperwork and have your stocks, bonds, or mutual funds transferred or cashed in.