Signature guarantees and notary stamps are both used to verify signers’ identity. Loan documents, for instance, require professional notarization to protect against fraud. The notary public verifies the signer’s identify – usually done by checking his or her driver’s license of state-issued ID card – and stamps the document to finalize its execution. While a signature guarantee shares some similarities to a notary stamp, they are two unique processes, each with its own purpose.
What Is a Medallion Signature Guarantee?
A medallion signature guarantee is a unique certification stamp that guarantees a signature that authenticates a transfer of securities.
When getting a signature, the bank officer will stamp the medallion guarantee on your transfer near your signature, then sign their name over the stamp. This helps prevent an unauthorized transfer.
What Is a Security?
In the context of a medallion signature guarantee, a security is a negotiable financial instrument representing some economic value presented in the form of a stock, bond, or option.
A security could represent:
- An ownership position in a publicly traded stock.
- A creditor relationship with a government body or corporation designated by owning that bond.
- The rights to ownership as presented by an option.
When you have to transfer securities, you’ll need a medallion signature guarantee that protects your stock amount.
Whom Does a Medallion Signature Guarantee Protect?
The medallion signature guarantees and protects:
- Your position as a shareholder, so that it’s less accessible for someone to access your physical shares and try to cash them.
- The transfer agent and financial institution who is protected, to an extent, by the signature guarantee.
- You, as a purchaser, of someone else’s shares that says you’re purchasing legitimate shares of stock.
A medallion signature guarantee is an assurance by the financial institution that guarantees the transaction is genuine and legitimate. The signature guarantor accepts liability if there is any fraud or forgery.
Why Might You Need a Medallion Signature Guarantee?
Medallion signature guarantees cover a range of situations such as:
- Moving securities to a new account, like transferring a 401k if you’ve changed jobs.
- Giving guarantees as a gift, like transferring shares of stock to somebody or donating them to a charity.
- If the owner of said securities dies, requiring an ownership transfer to a court-appointed representative.
Where Can You Get a Medallion Signature Guarantee Stamp?
These financial institutions provide medallion signature guarantees:
- Banks and credit unions, such as:
- First Midwest Bank
- U.S. Bank
- Wells Fargo
- A brokerage firm or broker-dealer
- Other financial institutions that are members of a medallion signature guarantee program
A medallion signature guarantee program refers to the Securities Transfer Agents Medallion Program (STAMP) or the Stock Exchange Medallion Program (SEMP). Medallion signature guarantee programs like these are a type of verification system used by different institutions that guarantee signatures applied to physical certificates of securities that require transfers.
How Much Does It Cost to Get a Medallion Signature Guarantee?
If you’re a financial institution member who already offers medallion signatures, you can get one for free. Many banks and credit unions offer these guarantees for free for long-term customers, which makes the process much easier.
A financial institution may charge a small amount for a medallion signature guarantee stamp to cover the nature of securities. This may include the paperwork that needs filing and the agent’s time and effort. To account for these costs, you could spend anywhere between $10 to $50.
However, these costs are quite affordable, and obtaining a medallion signature guarantee won’t break the bank.
It’s also helpful to know that relatively new security measurements are in place for medallion signature guarantees.
In the 1990s, electronic identity theft and fraud reached an all-time high, thanks to new viruses and malware. In response, financial institutions created notary stamps containing a barcode and an invisible security barcode that could only be read by Stamp 2000 Plus scanners used by transfer agents.
These stamps also had a prefix that ensured the security limit, limiting the amount the institution could guarantee for the transaction.
Prefix F and E are used solely by banks and credit unions that guarantee a signature up to $100,000, while other prefixes may cover much higher amounts, all the way up to $10 million.
What Is the Difference Between a Signature Guarantee and a Medallion Signature Guarantee?
There is no actual difference between the two: Both “signature guarantees” and “medallion signature guarantees” are used interchangeably and represent the same thing.
Now that you know a medallion signature guarantee stamp is an official certification to ensure the validity and safety of trading your stocks, some other essential transactions and documents may require a seal or signature.
In many cases, significant legal and financial documents will require a notary stamp, which differs from signature guarantees.
What Is a Notary?
A notary is a public figure whom the state government appoints to serve as an impartial witness in performing fraud-preventative acts related to signing legal and financial documents. These official signatures are considered notarizations.
Important documents require notarizations to be verified by a third party and limit the likeliness of fraud. Notaries must check all parties’ identification to ensure that the person’s identity matches the signature on the document. Then, the notary will ask the parties to sign an acknowledgment form before getting started.
The notary will put all of the signers under oath and declare them under penalty of perjury if the information contained is false in any way. Going over the contract and paperwork is the next step, and the notary’s official signature and stamp will finalize the process.
What Is a Notary Public Stamp?
A notary public stamp is often called a notary seal, embosser, or stamp. Which term you use depends on which state you’re in, but all terms mean the same thing and reference the inked rubber stamp that authenticates the notary’s signature.
A notary stamp verifies the identities of all parties and the contract’s validity. It makes the notarial act official, preventing fraud and allowing institutions to verify transactions, contracts, and agreements. Under the court of law, a notarized document is seen to be the same as taking a sworn oath.
Why Are Documents Notarized?
Some examples of documents that require notarization include:
- Financial documents, such as mortgage closing forms, property deeds, loan documents, credit documents, wills, and trusts
- Business documents, such as executorships, custody agreements, powers of attorney, court documents, and affidavits
- Legal documents, such as vendor contracts, commercial leases, employment contracts, construction agreements
Financial, business, and legal documents most often have to be notarized to be accepted by most companies and institutions. This is because banks must protect large amounts of money or property as they’re traded, so all the people and assets involved with the document need to be completely accurate.
Where Do You Get a Notary Public Stamp Signature?
The good news about needing a notary signature is that notaries are easy to find. You can call and set up an appointment with plenty of businesses and institutions throughout the U.S., such as:
- Law Firms or Law Offices
- Real Estate Firms or Real Estate Offices
- Tax Preparer or Accountant Offices
- Photocopy Shops
- Parcel Shipping Stores
- Auto tag and license service centers
- Colleges and Universities
But suppose you need one to come to you or are looking to keep one on retainer on an as-needed basis. In that case, it’s a good idea to check local notary public databases for traveling and contractible notaries. You can also check out service providers like Superior Notary Services, which offers access to local and mobile notaries near you.
How Much Does It Cost To Get a Notary Public Stamp Signature?
In some states, notaries can set their prices, especially if they’re independent or freelance workers. These prices may depend on traveling distances, supplies, and time and effort put into each task.
However, when dealing with businesses and institutions, there will be set prices depending on the state you live in. Each state sets fees that a notary must charge when performing specific tasks, whether it’s for acknowledgments, verbal oaths, or just travel fees. Most of these fees vary between $5 and $20.
Since state laws set the highest charges allowed, notaries can charge any amount up to that limit. Standard signature fees vary between $2 and $20, while many mortgage closings and home loan signing fees will run clients over $100.
Here are the key differences between a medallion signature guarantee and a notary stamp:
Notary seals help prove who we are when signing legal documents
Medallion signature guarantees promise the identities for the transfer of securities—making sure everything goes smoothly.
So, if you’re selling your car to another person, you will need the Bill of Sale notarized for authentication. However, if you’re transferring your 401k assets to another account, then you’ll need a medallion signature guarantee.
For documents that notaries can address, the experts at Superior Notary Services can help. Our network of vetted and professional notaries spans all states across the country. Call on us to arrive at your home or workplace at your convenience. Find a notary today at Superior Notary Services.
Medallion Signature Guarantee vs Notary Public Stamp