1. SELL VIA EXCHANGE ACCOUNT: Create an account at a reputable exchange such as Coinbase or Bitstamp. (Some banks are beginning to add Bitcoin services too). Then, shift some of your BTC to the online wallet associated with your exchange account, and initiate a SELL order. They will deposit cash into the regular bank account of your choosing.
2. IN PERSON: Meet someone and exchange BTC for local currency. This method has risks, and it is trickier to agree on the exact time and price for a transaction. Local Bitcoin can present a map of individuals in your vicinity who are ready to buy or sell Bitcoins right now. In my opinion, the idea is clever, but the execution is poor. I have attempted to try this method in numerous occasions, and it has never resulted in a successful transaction . Something always goes wrong.
3. A BETTER METHOD: But remember: It saves you money if you use your BTC as cash to buy goods and services—rather then converting back and forth to fiat. Although retaining BTC carries the risk of exchange-rate fluctuation, in the long run, this volatility favors savers. (I.e. anyone with BTC sitting in their wallet).