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If you’re wondering, “Can I open a bank account in another country?” the answer is typically yes. Whether you are pursuing life as a digital nomad, studying abroad for a semester or two, or traveling with friends or your significant other for a few months, you’re going to need access to funds.

If you keep your American bank account, you’re likely to face a slew of foreign transaction fees, which can really take their toll on your finances.

Fortunately, opening a bank account in a foreign country is totally possible — and totally legal, as long as you’re not doing so for tax evasion purposes. However, it may take a few more steps than opening a domestic account would. Read on to learn the details.

What is Banking Abroad?

Banking abroad is pretty much exactly what it sounds like: It involves opening a bank account in a country that is not your primary or official country of residence or citizenship.

If you’re an American, this means opening a bank account in any other country, whether it’s Canada or Cambodia. Of course, some countries — such as, famously, Switzerland or the Cayman Islands — are specifically known for what are called offshore bank accounts, thanks to incentives such as high levels of financial privacy and serious deposit protections. These features can and have attracted the attention of high-net-worth individuals over the years.

But opening a foreign bank account isn’t reserved only for the ultra-rich. Regular, everyday individuals may benefit from banking abroad in certain circumstances. If you are wondering if you can open a bank account overseas because you’ll be spending the bulk of your time there, you probably can.

Is Banking Abroad Legal?

Banking abroad is legal if you’re doing so for the right reasons.

Most of us associate banking abroad with nefarious activities like money laundering or tax evasion, which are, of course, illegal — and could result in large fines or even imprisonment.

But if you’re living in or earning legitimate wages in a foreign country, opening an account there is totally legitimate. It’s also likely your best bet for avoiding excessive foreign transaction fees. It will also reduce or eliminate the hassle of having to deal with a customer service team based in a very different time zone.

Some people also open offshore bank accounts for investment purposes. If this interests you, it’s worth enlisting the help of a financial professional to ensure you’re staying above-board. Foreign investments or offshore banking for tax purposes can be quite complex.

How to Legally Bank Abroad

In order to legally open a checking account in a foreign country, you’ll usually need to verify quite a lot of personal information for the bank. This is so all the parties involved can confirm you’re banking in a foreign country for legal reasons and not engaging in illicit activities, such as tax evasion or money laundering. You will probably have to share some details with US officials, too.

So what does all that mean for you as someone interested in opening a foreign bank account?

Paperwork — potentially lots of paperwork, though it may not be that complex.

Recommended: Can You Have Multiple Checking Accounts with One Bank?

Requirements to Open a Bank Account Abroad

The specific documentation you’ll need to provide to open a foreign bank account will depend on a lot of factors. Among the variables that may impact exactly what you’ll need to provide: The specific bank you choose, the regulations of the target country, how much money you’re planning to deposit or hold in the account, and more.

Generally speaking, though, you can plan to provide the following:

•   Proof of identification, such as a passport or driver’s license

•   Proof of residence, such as a utility bill

•   Up to a year of bank statements from your current bank account in the US

•   Paystubs or a statement from your employer

•   Documentation relevant to investments or business transactions, such as sales contracts

Keep in mind that these documents may need to be notarized by a third party or sent through the local consulate for the target country in order to be deemed official. The bank will give you explicit instructions on all required documentation and may also ask for a written statement of purpose for opening the account.

Don’t overlook the home team either. The US government is likely to have its own questions about your activities. If the value of your account abroad will be more than $10,000, you’ll need to file a Report of Foreign Bank and Financial Accounts (FBAR).

Note: Interest earned on monies held in foreign savings accounts are usually still taxable here at home. Always consult with a professional if you have questions about your tax liability.

Pros and Cons of Offshore Banking

So, what are the benefits and drawbacks of offshore banking? When does opening a foreign bank account make sense? Take a closer look.

Pros

First, the upsides of opening a bank account in another country.

•   An offshore bank account can help you avoid foreign transaction fees if you’re living or doing business in a foreign country.

•   Having a bank account in a foreign country you’re living in can also make it easier to perform basic daily banking tasks without having to navigate overseas phone calls.

•   Offshore banking can have some legitimate tax incentives — though in order to take advantage of these legally, you’ll probably need to consult a tax professional.

Cons

Now, the disadvantages:

•   Opening a foreign bank account can be a relatively arduous process, with a lot of paperwork and verification involved.

•   Foreign banking can have unforeseen taxation consequences — for example, interest earned overseas may still be taxable at home.

•   You may need to file additional paperwork with the IRS if your foreign account will be valued at over $10,000.

Here’s how these pros and cons stack up side by side.

The Takeaway

The answer to the question, “Can I open a bank account in a foreign country?” is likely to be a big yes. Gathering and submitting the right documentation may take a while, but it can ease your time abroad tremendously. It can help you spend more time reveling in the local culture than wrangling your personal finances.

If you’re looking for an easy-to-use banking alternative here in the US, consider your options to find the right fit.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What countries allow foreigners to open bank accounts?

Most countries will allow foreign nationals to open a bank account on their shores as long as they can provide proof of legal residence in that country (and other necessary documentation). Some countries make it easier than others to open a foreign bank account, however.

Can I open a bank account in another country without being a citizen?

Yes, but you will likely need to provide extra documentation to verify your identity, place of residence, and the legal purpose of the account.

Photo credit: iStock/MicroStockHub

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBK0124021

No matter how well you plan and budget for an overseas trip, you may still end up with some extra foreign cash at the end of your vacation. And since you can’t spend that currency back home in the United States, you’ll need to come up with an alternative plan for all those foreign coins and bills now burning a hole in your pocket.

Sure, those bills may be pretty (have you seen the Australian dollar?), but it won’t do you any good hanging as art on the wall. And you don’t want to miss out on having that money to save or spend at home.

Instead of letting it go to waste, here are a few things you might do with that leftover foreign change once your trip is done and your regular life sets in again.

What to Do with Extra Foreign Currency

Using It to Pay Part of Your Hotel Bill on Vacation

There’s nothing quite so annoying as arriving at your gate with five minutes until boarding, only to realize you’ve still got about $80 worth of Moroccan dirham or Turkish lira left in your wallet.

One way to avoid this scenario is to try and use your foreign cash to cover costs while you’re still abroad. A helpful tip is to switch to cash spending near the end of your trip. Then, if you have leftover currency on your last day, see if you can use it to cover some of your hotel bill. Sometimes hotels will let you split your bill up, so that you can pay some of it in cash and put the rest on a credit card. Just be sure to leave some currency in your wallet for your cab ride to the airport and tips.

Shopping Duty Free

If you have a fair chunk of foreign currency leftover, consider making a stop at the Duty Free stores upon departure. This can be a good strategy if you are buying something you’d use ordinarily, like your favorite perfume or liquor, or if you’re still looking to buy a souvenir from the destination.

However, some countries, especially those that are sensitive to inflation, don’t accept foreign currency (except for euros and dollars) at Duty Free, so double-check that your change is eligible before you show up at the register with a cart full of goods.

Recommended: 27 Tips for Finding the Top Travel Deals

Donating to Charity

Thanks to UNICEF’s Change For Good initiative , you may not have to exchange a dime. This program involves a partnership with several international airlines to help passengers donate their excess change.

On these flights, passengers receive envelopes in which they can donate their leftover foreign currency. If you’re not flying with a partner airline and still want to donate, you can mail your change to the organization.

Some airports have similar initiatives and programs that raise money for different charities around the world — all you need to do is find the box or envelope and stuff it full of your extra change. It’s a great way to do good and not let that spare money go to waste.

Exchanging It

Although exchanging physical money comes with a fee, this can be one way to recoup your cash if you aren’t planning on visiting the country again anytime soon.

In a pinch, you can exchange foreign currency at the airport (abroad or at home), but you likely won’t get the best exchange rate. A better option is to visit your U.S. bank to see if they will exchange your foreign cash (or, if possible, deposit it directly into your account). Banks typically offer better rates than the exchange kiosks you find in airports.

If you used a currency exchange service to exchange your U.S dollars into a foreign currency, see if they offer a “buyback” program. Some services allow you to sell back your unused foreign currency for a better rate or lower fees than you can get elsewhere.

Recommended: Ways to Be a Frugal Traveler

Saving It for Another Time

If you know you’ll be visiting again, why not store your extra foreign currency with your passport? Not only will you be able to keep the money, but you’ll save yourself a trip to the ATM upon arrival at your destination.

This can be one of the easiest solutions to the “what to do with leftover foreign coins” problem. And it might encourage you to start planning your return visit and growing your travel fund.

Gifting It

If you’re wondering what to do with foreign coins, know that they can be a fun gift to a child or currency collector in your life. It can be an opportunity to teach kids about both the world at large and about money. Bonus points if they are from a country with a cool design on their currency — like the Egyptian pound with pharaoh Tutankhamun.

Any leftover foreign coins or bills can also be a thoughtful gift for friends or family members who are traveling to the same spot. This can make an especially nice wedding gift for friends heading out on a honeymoon.

Recommended: Can You Use Your Credit Card Internationally?

The Takeaway

If you wind up with excess foreign currency at the end of a trip, you have a few options. You might save it for later, donate it to a charity, exchange it, or gift it to a friend. Depending on how much money you have, when (if at all) you plan on returning to your destination, and how much you’re willing to pay in fees, there’s an option that will likely be the right choice for you.

FAQ

Where can I donate leftover foreign currency?

UNICEF’s Change for Good program accepts donations on a number of international airlines. Leftover change may also be mailed to this program. You may also see other opportunities to donate currency at airports, benefiting various charities, as well.

Can I exchange my foreign currency at a bank?

If you’re looking to exchange foreign coins and bills, it’s worth visiting or calling your bank. Many banks offer to exchange currency for their clients. However, some will only do so for a limited number of currencies. A fee is usually involved, but it is likely to be lower than what you will pay at an airport currency exchange kiosk.

What is the meaning of leftover currency?

Leftover currency is typically foreign money that you have at the end of a trip. Before or after you return home, you can exchange it to U.S. dollars. Other options include saving it for a future trip, donating it, or gifting it.

Is leftover currency legitimate?

Leftover currency is legal tender in the country you have traveled to, but when you return home, it will not be usable. Therefore, it may be wise to exchange it or donate it.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBNK-Q324-100

You know how important it is to budget and save. But every once in a while it’s okay to reward yourself for a job well done. Whether you got through a stressful week, completed a tough work project, or did a good deed for a friend or neighbor, it’s important to pat yourself on the back. And there’s room in almost any budget for a little reward. Low-cost and free treats can serve as positive reinforcement without launching you on that slippery slope of overspending.

Why Treating Yourself Is Essential

Treating yourself is a form of self-care, which is a way of showing yourself kindness by doing things that make you feel good. Studies on self-care have found it can help reduce or eliminate anxiety and depression, manage stress, and increase happiness.

Treats or self-rewards are a way of recognizing that you’re doing a good job and meeting goals. Fortunately, there’s room in almost any budget for them. Whether it’s an occasional bouquet of supermarket roses or a TGIF beer with friends, these purchases are unlikely to wreak havoc on your finances or trigger a situation in which you can’t stop overspending.

Rewarding Yourself: 16 Different Ideas

Maybe you asked for and got a raise at work, buckled down on your budget, finally cleaned out your closets, or just feel you need a lift after a draining week. It’s time to treat yourself. Consider these free or low-cost rewards:

1. Drop in for a Single Yoga Class

Yoga provides a plethora of physical and mental benefits, such as helping to relieve back and neck pain, improve sleep quality, and reduce stress. Many yoga studios offer drop-in classes, with the average price about $15 to $25 a class. If that’s a bit steep, YouTube features an array of free yoga videos led by experienced instructors.

2. Get a Cup of Fancy Coffee

Making coffee at home saves tons of money, but there’s nothing like the occasional barista-made cappuccino or flat white from your favorite coffee shop. Whether you have one as Monday motivation to start your week off right or reward yourself on a weekend AM, it can be a low-cost bit of self-care.

3. Pick up a Bouquet of Flowers

Treat yourself to some colorful blooms from your local grocery store. Research has shown flowers can improve mood and increase happiness.

4. Buy Yourself Your Favorite Ice Cream

Many of us have cheered up a kid with an ice cream cone. Why not do the same thing for yourself? Mint chip, strawberry, and good old vanilla just begin to describe the possibilities.

5. Go for an Inexpensive Mani-Pedi

Many nail salons offer weekly specials that include a manicure, pedicure, and perhaps a short massage. It can be an affordable way to help you look and feel good. Go ahead and pamper yourself on a budget.

Recommended: 15 Creative Ways to Save Money

6. Take a Nap

Few things feel as good as a power nap. A snooze of 30 to 60 minutes can refresh you, improve your mood, and increase alertness. It’s also a great way to treat yourself without spending money. Just beware of sleeping more than an hour though; it can leave you feeling groggy and interfere with your nighttime slumber.

7. Stream Some Shows

Heard about a great show but don’t subscribe to the service it’s on? Many streaming channels offer free trial periods ranging from a week to a month. That could be enough time to binge-watch those shows you’ve been hearing about without necessarily signing up for a monthly subscription.

Recommended: 7 Ways to Achieve Financial Self-Discipline

8. Camp Out

Camping for a night or two is typically an inexpensive pursuit. Being out in nature all day and looking up at the constellations at night can be a wonderful treat and spirit-reviver. Not for you? How about an afternoon of “forest bathing” near your home? All that means is spending time in nature, focusing on the sights, sounds, and smells of the woods.

9. Visit a Local Museum

Whether you look at classic paintings or challenging avant-garde works, a museum visit can immerse you in beauty and open you up to refreshing new perspectives. Many museums either have specific days or times when entry fees are free or reduced.

10. Get Crafty

Having a creative outlet is not only a way to relieve stress, it’s also fun. A good self-reward can be to spark your creativity with anything from an adult coloring book to a ceramics lesson.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

11. Have a Nice Lunch or Dinner Out

If you’ve been working hard, you might treat yourself to a meal at a restaurant you’ve been wanting to try or a type of food you don’t usually eat. Invite a friend you’d like to catch up with; that can make it more memorable. To make your outing more affordable, check out special offers, like a prix fixe lunch menu or half-price cocktails before a certain hour.

12. Spend a Day at the Beach

Sun, sand, and surf have a way of restoring one’s spirits. If you live near the shore, consider making a day trip, even if it’s off-season. You might have to pay for parking, but otherwise, this outing can be a very low-cost way to treat yourself.

Recommended: Easy Ways to Save Money

13. Visit a Thrift Shop or Flea Market

Shopping second-hand can be a fun and a low-cost way to reward yourself, even better if the proceeds go to a charitable organization. Treat yourself to some inexpensive clothing, jewelry, books, cookware, or maybe even the perfect acoustic guitar. You’re also helping the environment since thrifting keeps items out of landfills.

Recommended: A Guide to Ethical Shopping

14. Take a Mental Health Day

It may take some planning and organization, but gifting yourself a day off to rest and recharge can help prevent burnout and reduce stress. Spend it however you like — lazing on the couch, taking nature photos, or visiting a friend you haven’t seen in a while.

Recommended: Making Money Through Social Media

15. Listen to Live Music

Sure, you could splurge on a major concert, but local bars, beer gardens, and other spots often have live music without any sticker-shock tickets. Whether it’s folk, Zydeco, or classic-rock covers, you’re likely to feel better for it. Music has been shown to reduce anxiety and improve one’s mood.

16. Buy a Good Book

A good story can transport you away from daily life. Why not treat yourself to one? You can stop by the bookstore and purchase that book you’ve been wanting. Or, you might borrow an audiobook from the library and listen to it while you’re taking a walk, driving, or relaxing at home.

The Takeaway

Everyone needs and deserves a treat now and then: a reward for saving money, getting kudos at work, or finally organizing your coat closet. Self-care can boost your mental health and keep you motivated with your goals. There are endless ways to treat yourself, and plenty of ways to do so without busting your budget. With the ideas described here, you can reward yourself and stay on track money-wise, which is a win-win.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is it called when you reward yourself?

People use a variety of terms, including a treat, self-reward, self-care, positive motivation, and positive reinforcement.

What if I feel guilty when rewarding myself?

Some people feel guilty when rewarding themselves. This may be because they were raised in a household that felt people should work hard without reward or because they believe rewards will make them “soft” and unmotivated. However, rewards can actually help people recharge, achieve more, and enjoy life more, so try giving yourself permission.

How do I not go overboard when rewarding myself?

It’s wise to have your self-rewards as a line item on your budget to avoid going overboard. That “fun money” doesn’t have to be a lot: Many treats are low-cost or even free.

Photo credit: iStock/Prostock-Studio

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOBNK-Q324-096

The trade-in value of a truck is the amount a dealer is willing to give you to put toward the purchase of a new vehicle. Cars depreciate in value the moment you drive them off the lot, so over time, trade-in values tend to decrease as well. They are also impacted by a variety of factors, such as make and model, age, condition, and mileage.

Here’s a look at what your truck might be worth over the first five years of ownership, and the factors that impact that value.

Average Trade-In Value of a Truck After 5 Years of Ownership

The trade-in value of a truck is based on its market value, which is the amount a person is willing to pay based on the truck’s make, model, age, condition, etc. However, when saving up for a new car, it’s important to realize that what a dealer might offer for a trade-in is likely less than the market value. That’s because when the dealer eventually sells your vehicle, they will need to turn a profit. And their profit will be the difference between market value and trade-in value.

Cars, trucks, and other vehicles depreciate, meaning their market value decreases each year. Luckily for truck owners, trucks tend to depreciate more slowly than cars and SUVs.

For example, the average five-year depreciation of Toyota Tacoma, a midsize pick-up truck, is 20.4%, according to a 2024 study by iSeeCars. Average five-year depreciation for Ford F-150, a full-size pick-up truck, is 36.0%. Compare that to an average five-year depreciation rate of 38.8% for cars, 42.9% for midsize SUVs, and 49.1% for electric vehicles.

Depreciation is also an important factor to understand when leasing a vehicle, as your lease payment will cover the cost of depreciation to the lessor.

Supply chain issues, component shortgages, and increased demand for vehicles has driven up the price of new and used cars and trucks in recent years. This has had an impact on how fast vehicles depreciate. In 2024, the average five-year depreciation was 38.8%, compared to 49.1% in 2020.

Factors That Impact Truck Value Over Time

As we mentioned above, the moment your car leaves the lot, it starts to lose value. (For that reason, savvy consumers often believe it’s better to buy a used car over a new one.) What happens to the car will have a big impact on value as well, from wear and tear to how much it’s driven and its accident history. As a result, depreciation and trade-in values will vary from vehicle to vehicle.

Age and Condition

Age and condition are two of the biggest factors that will affect your truck’s trade-in value. The older a vehicle is, the less value it tends to maintain (unless it’s a desirable vintage vehicle). The reason: It’s assumed that the older a car is, the more it will have been driven and the more wear and tear it will have experienced.

All sorts of factors big and small can go into determining condition, from dents and scratches to major repairs made after an accident. Only cars in pristine condition will fetch top market values and trade-in prices.

Mileage

How much a truck has been driven will also have an impact on trade-in value. The more you drive your truck, the more wear and tear you may be putting on the engine and other parts. As a result, trucks with lower numbers on their odometers tend to command.

Make and Model

A truck’s make and model refer to the company that makes the vehicle and the specific product, respectively. For example, Ford is a make while the F-150 is a model of truck. Some makes and models are more popular than others, which can increase trade-in value. This may be for a variety of reasons. For example, some may get better gas mileage or have roomier interiors that make them more appealing to used truck buyers.

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Trim Level

The trim level of a vehicle refers to the optional features it has. For example, higher trim levels may offer more equipment or luxury materials, such as leather seats. Automotive technology, such as back-up cameras and navigation systems, are in high demand. Higher trim levels can translate into higher trade-in values.

Accident History

Even if a car shows no outward signs of damage after an accident, vehicles that have been involved in a major accident or a natural disaster, such as a flood, will usually fetch lower trade-in values.

According to Carfax, any accident will remove $500 from the value of a car, on average, while a major accident can cost as much as $2,100 in lost value.

Local Market Demand

Where you resell your truck can have an affect on its market value. For example, if you live in an urban area, there may be less local demand for trucks than if you live in a suburban or rural location.

Geography can have other impacts on the value of your truck. For example, a truck that’s been through a number of harsh Northeast winters might be in worse condition than one from a warmer, dryer climate.

Increase Your Truck’s Trade-In Value

Bring your truck up to the best condition to increase its trade-in value. Fix whatever damage you can, such as scratches, chips in the windshield, or minor engine repairs. Have your truck cleaned and detailed before an appraisal by a dealer. A money tracker app can help you carve out room in your budget for any repairs.

It’s worth noting that your credit score will also impact the deal you get on your new car. That’s because a higher credit score gets buyers a lower interest rate on car loans.

Recommended: Does Net Worth Include Home Equity?

The Takeaway

How much a truck is worth is calculated based on many factors, including make, model, age, mileage, and condition. The trade-in value will be less than the market value. Understanding your vehicle’s potential trade-in value is an important consideration when budgeting and saving for the purchase of a new or used truck. If you think you may trade it in for a newer model in the future, research vehicles that are likely to hold their value better.

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FAQ

What is the trade-in value of a truck?

The trade-in value of a truck is how much money a dealer is willing to give you toward the purchase of a new vehicle in exchange for your old one. Because dealers want to turn a profit when they resell your vehicle, trade-in values tend to be lower than fair market values.

How is trade-in value calculated?

Your truck’s trade-in value is based on a variety of factors, including make, model, age, mileage, and condition of the vehicle. Your truck’s value will depreciate every year, until it no longer has a resale value.

How do I find the fair trade value of my car?

A number of online tools can help you find the fair trade-in value of your car. For example, Kelley Blue Book and Edmunds offer very good online tools. Enter your vehicle identification number, license plate number, or the year, make, model, and mileage of your truck to get an idea of what it may be worth.

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The golden cross pattern is a technical indicator that appears when a security’s short-term moving average rises above its long-term moving average. A golden cross is generally interpreted as the sign of an upcoming market rally.

The golden cross pattern is a momentum indicator, and it tends to be popular because it is easy for chart watchers to spot and interpret. It doesn’t occur as often as other chart patterns, but when it does it sometimes even makes news headlines because it is a strong bullish indicator for a stock or an index.

How Do Golden Cross Patterns Form?

The golden cross candlestick chart pattern happens when the short-term moving average (e.g. the 50-day moving average) moves above and crosses a long-term moving average such as the 200-day moving average, or DMA.

It is an indicator that the market will probably head in a bullish direction, and can be used by stock investors, day traders, swing traders, options traders, or anyone interested in analyzing price movements.

A moving average is a graph of the average value of a stock price for some trailing period of time. Commonly used moving averages are the 50-day moving average (DMA) as a short-term measure and the 200 DMA as a long-term measure.

That said, traders can use moving averages of various lengths, from hours to months, to capture a desired time frame.

Recommmended: Important Candlestick Patterns to Know

3 Stages of a Golden Cross

There are three stages that form the Golden Cross pattern:

1.    Downtrend. The first stage of the golden cross happens before the moving average lines cross. A downtrend occurs, and the short-term average is lower than the long-term average, but then buyer volume starts exceeding seller volume.

2.    Breakout. Next, the cross happens. The short-term moving average crosses over and above the long-term moving average, reflecting a reversal of the downward trend and upward momentum.

3.    Upward momentum. The trend continues and the prices continue to rise, with both the short- and long-term DMAs creating support levels (the lower end of both average prices) and indicating movement toward a bullish market.

Understanding support and resistance levels is key to reading technical charts. Support indicates where the price tends to stop falling; resistance indicates where the price tends to stop rising.

What Does a Golden Cross Tell Traders?

When the short-term average is higher than the long-term average, this means that short-term prices are rising compared to previous prices, showing bullish momentum.

The candlestick pattern that’s opposite the golden cross is the Death Cross chart pattern, which is when the short-term average moves below the long-term average, indicating a bearish market trend.

You can think of the golden cross pattern as a logical example of how price momentum can work. Because it’s the short-term DMA that rises and crosses the long-term DMA in a stock chart, it makes sense that analysts would interpret this as a bullish indicator that could have some staying power, as the short-term DMA would eventually play into the long-term DMA.

How Does a Golden Cross Work?

A golden cross occurs in a technical chart when the short-term moving average dips down to its resistance level, and then moves upward, crossing the long-term moving average.

Traders can use different time periods when conducting technical analysis, but the use of the 50-day moving average and the 200-day moving average are common when it comes to identifying the golden cross pattern. The longer the time period, the more lasting the upward trend may be.

Different traders, for example day traders or options traders, can use shorter periods, depending on when they’re aiming to place trades and what their strategy is.

Pros and Cons of Using the Golden Cross

The golden cross can be a useful technical pattern for traders to use to spot changes in market trends. However, on its own it has some limitations.

Benefits of the Golden Cross

The golden cross is known as one of the strongest bullish technical indicators, and can reflect other positive underlying factors in a particular stock.

Furthermore, since the pattern is so widely known, it can attract buyers, thereby helping to fulfill its own prediction.

Drawbacks of the Golden Cross

Like any chart pattern, there is no guarantee that prices will rise following the golden chart pattern.

Chiefly, the golden cross is a lagging indicator. It shows historical prices, which are not necessarily an indicator of future price trends.

Even if prices do rise, they might not rise for long after the golden cross forms.

Due to these uncertainties, it is best to use the golden cross in conjunction with other indicators.

How to Trade a Golden Cross

Both long-term and short-term traders can use the golden cross to help them decide when to enter or exit trades. It can be used both for individual stocks and for trading market indexes.

Most traders use the golden cross and Death Cross along with other indicators and fundamental analysis, such as the relative strength index (RSI) and moving average convergence divergence (MACD).

RSI and MACD are popular indicators because they are leading indicators, potentially providing more real-time information than the golden cross pattern.

What Time Frame Is Best for a Golden Cross?

The most popular moving averages to use to spot the golden cross are the 50-DMA and the 200-DMA. However, day traders may also spot the golden cross using moving averages of just a few hours or even one hour.

Whatever the chosen time period, traders enter into the trade when the short-term average crosses over the long-term, and they exit when the price reverses again.

Because the golden cross is a lagging indicator, investors enter a trade when the stock price itself rises above the 200-DMA rather than waiting for the 50-DMA to cross over the 200-DMA. The logic being: If traders wait for the pattern to form they may have missed the best opportunity to enter into the market.

Short sellers may also use the golden cross to determine when the market is turning bullish, which is a good time for them to exit their short positions.

The Takeaway

Chart patterns are useful tools for both beginning investors and experienced traders to spot market trends and find entry and exit points for trades. The golden cross is one indicator that technical analysts might use to determine whether a stock or market is bullish.

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