how do you get money from your stocks

How do you get money from your stocks?

Owning shares is one thing; turning them into usable cash or steady income is another. This guide answers "how do you get money from your stocks" with clear, practical options for U.S. equity investors — from selling shares and receiving dividends to borrowing against holdings or generating income while keeping exposure. You’ll learn common workflows, order types, settlement timing, tax basics, alternatives to selling, record-keeping, and key risks. It also points to authoritative resources and recommends Bitget for trading and Bitget Wallet for custody when appropriate.

Main ways to get cash or income from stocks

Investors typically obtain cash or income from stock ownership in five broad ways:

• Selling shares to realize capital that can be withdrawn to a bank account.
• Receiving dividends or distributions paid in cash by companies.
• Borrowing against shares using margin loans or securities-backed lines of credit to access liquidity while keeping positions.
• Generating income without selling via options strategies (covered calls, cash-secured puts) or lending programs.
• Receiving cash from corporate actions (tender offers, special dividends, spin-offs, liquidations).

Each path has trade-offs for taxes, timing, costs, and risk. Later sections walk through execution steps, settlement, taxes, and recommended record-keeping.

Selling shares for cash

Selling shares through your brokerage is the most direct way to get cash from stocks. When you place a sell order, the broker routes the order to an exchange or trading venue, the trade executes at a counterparty price, and the sale generates proceeds that follow settlement rules. If you plan to move proceeds to a bank or use them elsewhere, understand order types, settlement timing, and any brokerage rules that affect how soon funds become available.

Order types and execution

Common sell order types and how they affect price and execution probability:

• Market order: sells immediately at the best available price. High chance of execution but price may differ from the last quote, especially in volatile or thinly traded stocks.
• Limit order: sets a minimum acceptable price for the sale. Executes only if the market reaches that price or better. Gives price control but not execution certainty.
• Stop order (stop-loss): becomes a market order once a specified trigger price is reached. Useful for risk control but can result in execution at materially different prices during fast moves.
• Stop-limit order: becomes a limit order at the trigger; avoids sales below a threshold but may not execute.
• Trailing stop: the trigger follows the stock price by a set amount or percent; useful to lock gains while allowing upside.

Different venues and brokerages may offer advanced routing and execution speeds. If you trade larger blocks or thinly traded names, discuss execution strategy with your broker or use a limit order.

Trade settlement and availability of proceeds

• U.S. equities typically settle on a T+2 basis (trade date plus two business days). That means the legal transfer of shares and cash completes two business days after execution.
• Proceeds are often visible in your brokerage "cash" balance sooner for buying other securities, but withdrawable cash usually follows settlement rules and brokerage-specific holds.
• Cash accounts vs margin accounts: margin accounts often provide faster access to proceeds because unsettled sale proceeds can be used immediately to meet margin requirements or to buy other securities; however, transferring unsettled funds out of the broker can be restricted until settlement completes.
• Special cases: after corporate actions, broker processing may introduce additional delays. International trades may have longer settlement windows and different currency conversions.

Transferring proceeds to your bank

Common steps and timelines to move cash from a broker to a linked bank:

1. Confirm settlement: ensure the trade has reached T+2 and shows as settled in your account.
2. Initiate transfer in the brokerage app or website. Most brokers offer ACH (automated clearing house) transfers, wire transfers, and sometimes instant withdrawals to eligible bank cards.
3. ACH: common and usually free, but can take 1–3 business days.
4. Wire transfer: faster (same day or next business day) but often carries a fee charged by the broker and/or receiving bank.
5. Instant transfer options: some brokers offer instant withdrawal services for a fee or within limits; these use card rails and third-party services.
6. Holds and limits: brokers may impose limits on instant transfers, minimum transfer amounts, or additional holds on funds for new accounts, regulatory checks, or suspicious activity.

When having a plan for cash needs, build in settlement and transfer lead time and confirm fees for wires or instant transfers.

Dividends and income distributions

Dividends are cash payments companies make to shareholders, providing income without selling shares. Not all companies pay dividends; many growth companies reinvest profits instead.

• Types: regular cash dividends (quarterly, semiannual, or annual) and special one-time dividends.
• Declaration: the board declares a dividend amount and record and payment dates. Key dates include the declaration date, ex-dividend date, record date, and payment date.
• Who gets the dividend: to receive a dividend you must own the shares before the ex-dividend date. If you sell on or after the ex-dividend date, the dividend still goes to you; if you sell before the ex-date, it goes to the buyer.
• Frequency: most large U.S. companies pay quarterly, but schedules vary by issuer.

Dividends let investors get money from their stocks while keeping exposure to future price moves. However, dividends can be cut by management, so they’re not guaranteed.

Dividend reinvestment plans (DRIPs)

• Many brokerages let you enroll in a Dividend Reinvestment Plan (DRIP) that automatically uses cash dividends to buy additional shares or fractional shares.
• DRIPs accelerate compounding but don’t provide immediate cash. Investors who want cash should opt out and receive dividends as cash into their brokerage account.
• Note: DRIPs may buy shares at prevailing market prices; some company-run DRIPs offer a small discount, but most broker-run DRIPs simply reinvest at market prices.

Tax treatment of dividends

• In the U.S., dividends appear on Form 1099-DIV. Dividends are taxable in the year received.
• Qualified vs ordinary: qualified dividends meet holding period and other tests and are taxed at the more favorable long-term capital gains rates; ordinary (nonqualified) dividends are taxed at ordinary income rates.
• Holding period: for most common stocks, you must hold at least 61 days during the 121-day period around the ex-dividend date to treat the dividend as qualified. Rules differ for preferred stock and special cases.

Consult a tax professional to understand how dividend income affects your tax situation.

Borrowing against stock (margin loans and securities-backed lines)

If you want cash but prefer to keep stock exposure, borrowing against your portfolio is an option. Two common forms:

• Margin loans: offered by brokerages to buy securities and to borrow against held securities as collateral. Margin interest accrues and maintenance requirements apply. If collateral value falls, you may face a margin call requiring cash or forced sales.
• Securities-backed line of credit (SBLOC): typically offered by banks or wealth platforms, these are non-purpose loans secured by a portfolio. SBLOCs generally have competitive rates and allow use of proceeds without selling, but if collateral falls you can be required to post more collateral or repay.

Key points:

• Interest: borrowing costs vary; compare margin rates and SBLOC APRs.
• Collateral and concentration: accepting a concentrated position as collateral increases risk of a margin call if that position drops.
• No sale = no taxable event: borrowing does not trigger capital gains taxes because you haven’t sold shares, but interest is not always tax-deductible.
• Risk: a forced sale due to a margin call may lock in losses and can occur rapidly in volatile markets.

Borrowing can be efficient for short-term liquidity needs, but it increases leverage and risk.

Income strategies that keep shares (options, lending, covered calls)

Some investors generate income from stock holdings without a full sale using derivatives or lending programs. Common strategies:

• Covered calls: owning the underlying stock and selling call options generates premium income. If the stock rises above the strike at expiration, you may be assigned and required to sell shares at the strike price (capping upside). Covered calls are straightforward income generators but limit upside.
• Cash-secured puts: selling put options while holding cash to buy shares if assigned. Earns premium and can lead to buying shares at an effective discounted price if assigned.
• Stock-lending programs: brokerages lend your shares to short sellers and pay you a portion of the lending fee. Income is variable and comes with counterparty and recall risk; voting rights may be affected.

These strategies produce regular premiums or fees but introduce option risk, assignment risk, and potential reductions in upside or voting control.

Corporate actions that return value to shareholders

Companies sometimes return cash or value through corporate actions:

• Share buybacks: the company repurchases its stock in the market, which can lift earnings-per-share and share prices but does not directly pay cash to all shareholders (indirect benefit to those who hold shares).
• Tender offers: company offers to buy back shares at a specific price; if you accept, you sell shares and receive cash at the tender price.
• Special dividends: one-time cash distributions beyond regular dividends.
• Spin-offs and liquidations: corporate restructurings can result in shareholders receiving cash or shares in new entities.

If a tender offer or special dividend is announced, brokers typically publish procedures for accepting or receiving the payment.

Costs, fees and taxes when you convert stocks to cash

Converting stock positions into cash or income carries explicit and implicit costs. Factor these into decisions.

Capital gains: realized vs unrealized and tax rates

• Unrealized gain/loss: the paper profit or loss before you sell. Not taxable.
• Realized gain/loss: taxable event when you sell and close the position.
• Short-term vs long-term: holding period matters. In general U.S. tax practice, assets held one year or less are taxed at short-term capital gains rates (ordinary income rates). Assets held more than one year usually qualify for long-term capital gains rates, which are generally lower.
• Cost basis: your purchase price adjusted for stock splits, wash sales, and reinvested dividends. Tracking accurate basis is essential to calculate gains.

Transaction costs and brokerage fees

• Many U.S. retail brokers now offer zero commission trading for online equity trades. However, there may still be fees: wire fees, broker-assisted trade fees, transfer-out fees, or account maintenance fees.
• Exchange, SEC, and clearing fees may appear on trade confirmations for certain trades.
• International trades and currency conversions often carry explicit fees and wider bid-ask spreads.

Also consider tax costs: selling appreciated shares may push you into a higher tax bracket in the year of sale.

Wash sale rules

• If you sell a security at a loss and buy the same or a "substantially identical" security within 30 days before or after the sale, the loss may be disallowed for current tax reporting and added to the basis of the replacement shares.
• Wash-sale rules complicate tax-loss harvesting and require careful tracking if you plan to realize losses and re-enter positions.

Practical step-by-step: how to cash out (typical retail workflow)

1. Define the reason: emergency, planned spending, rebalancing, or tax-loss harvesting. Align the sale with goals and tax timing.
2. Choose amount and specific lots: consider using specific lot identification (FIFO, LIFO, or specific-share ID) to manage tax outcomes.
3. Pick order type: market for immediate execution, limit for price control, or use conditional orders for more complex plans.
4. Place the sell order via your broker (recommend Bitget for a user-friendly trading platform and responsible order routing).
5. Monitor execution and save trade confirmations/contract notes for records.
6. Wait T+2 for settlement; for margin accounts confirm whether proceeds are available earlier.
7. Initiate transfer to your bank when funds are settled. Choose ACH for cost efficiency or wire for speed (expect fees for wires).
8. Keep records for taxes: trade confirmations, 1099-B, 1099-DIV, and cost basis reports.

A clean workflow reduces errors and helps with tax reporting.

When (and when not) to take money out of stocks

Decisions to convert stocks to cash should match financial goals and not be purely reactionary to short-term price swings. Consider:

• Investment goals and time horizon: selling for a planned expense or to rebalance is reasonable; panic-selling due to short-term volatility often locks in losses.
• Tax timing: selling long-term appreciated stock may achieve preferential rates; realize losses strategically to offset gains.
• Opportunity cost: cash typically earns less (see money market rates below) and inflation erodes purchasing power; consider where proceeds will sit.
• Market timing risk: attempting to time exits and re-entry can lead to missed rebounds.

Rule of thumb: align sales with a predetermined plan (target allocation, immediate cash need, or tax strategy) rather than emotional reactions.

Alternatives to selling for liquidity or income

If selling isn’t attractive, alternatives include:

• Partial sale: sell a portion to meet cash needs and retain upside.
• Borrowing: margin loans or SBLOCs provide immediate liquidity without realizing gains (see borrowing section).
• Options income: covered calls or cash-secured puts to earn premiums.
• Dividend-focused rebalancing: rotate into dividend-paying stocks or ETFs to generate income over time.
• High-yield cash alternatives: money market accounts and high-yield savings for parked cash. As of January 20, 2026, according to FDIC and MarketWatch reporting, the national average MMA rate was about 0.56%, with top high-yield MMAs offering over 4% APY. Compare options before moving proceeds into cash.

Each alternative carries trade-offs in cost, flexibility, and risk.

Record keeping and tax reporting

Good documentation makes tax filing easier and helps prove basis and holding periods:

• Keep trade confirmations and contract notes for each sale.
• Save year-end broker statements and tax forms (Form 1099-B for sales, Form 1099-DIV for dividends).
• Track cost basis and lot-level details; many brokers provide tools to select specific lots for tax-efficient selling.
• Retain records of DRIP enrollments, stock splits, corporate actions, and option transactions.
• For complex situations, consult a tax professional. Bitget clients can export trade reports from their account to simplify reporting.

Risks and warnings

Converting stocks to cash or borrowing against them has risks:

• Crystallizing losses: selling during downturns locks in losses that could have recovered.
• Tax surprises: realized gains can increase tax liability for the year; incorrect basis tracking can lead to errors.
• Margin and borrowing risk: loans can lead to margin calls and forced sales.
• Counterparty and platform risk: broker insolvency or platform outages can delay access to funds. Use regulated custodians and consider using insured cash options for short-term proceeds.
• Opportunity cost: cash typically earns lower returns than stocks over long horizons.

Always weigh the immediate need for cash against these risks and consult a qualified financial or tax advisor for personal circumstances.

Frequently asked questions (short Q&A)

Q: How long until I get cash after I sell? A: Trades settle T+2 in U.S. equities. Broker policies determine when settled proceeds are withdrawable; margin accounts sometimes allow faster use of proceeds.

Q: Can I get dividends if I sell before the ex-dividend date? A: No. To receive the dividend, you must be the owner on the ex-dividend date. Selling before the ex-date transfers the dividend right to the buyer.

Q: What are wash-sale rules? A: If you sell at a loss and buy the same or substantially identical security within 30 days before or after the sale, the loss is disallowed for current tax reporting and added to the basis of the new position.

Q: Is borrowing cheaper than selling? A: It depends. Borrowing preserves exposure and avoids capital gains taxes but carries interest cost and margin risk. Selling avoids interest but may trigger taxes and lose future upside. Evaluate rates, taxes, and risk tolerance.

Q: Can I use proceeds immediately to buy other stocks? A: Many brokers allow you to use unsettled sale proceeds to buy new securities, but rules vary and certain types of purchases (e.g., to cover short sales) may require settled funds.

Further reading and authoritative resources

For deeper, authoritative detail, consult educational and regulatory sources:

• FINRA investor education pages
• IRS guidance on dividends and capital gains
• Broker help centers and account agreements (for example, Bitget help resources)
• Consumer-oriented guides from Edward Jones, NerdWallet, Bankrate, and SoFi
• State regulator and investor education (for example, Washington State DFI)

These sources explain settlement, order types, fees, and tax reporting in detail.

References

Sources used in preparing this guide:

• SoFi (How Do You Cash Out Stocks?)
• Edward Jones (How do stocks work?)
• Angel One (How to Get Your Money Out of the Stock Market)
• Bankrate (5 Things To Consider Before Taking Money Out Of The Stock Market)
• NerdWallet (What Are Stocks?; How to Buy and Sell Stocks; How to Sell Stock)
• FINRA (Stocks)
• Washington DFI (Basics of Investing in Stocks)
• Related educational content including an overview video on earning income without selling

As of January 20, 2026, according to FDIC and MarketWatch reporting, the national average money market account (MMA) rate was about 0.56%, while top high-yield MMAs offered over 4% APY — a reminder to compare deposit options when holding cash.

Final tips and next steps

• Match your action to the financial need: planned spending and rebalancing should follow a procedure; emergency needs may justify faster but costlier liquidity.
• Consider using Bitget for execution and Bitget Wallet for custody and easy transfers between crypto and fiat rails where supported. Bitget provides order tools, clear confirmations, and exportable trade reports to help with record-keeping.
• Keep good records for taxes; consult a tax professional for questions about capital gains, dividends, and wash-sale implications.

进一步探索: if you want a step-by-step walkthrough inside a brokerage environment, open a demo or live account with Bitget and review the sell, withdrawal, and reporting flows. Understanding the platform ahead of a large sale reduces errors and unexpected delays.