Advantages of Oanda (over Singapore banks. I use DBS bank mostly as an illustration)
- Lower bid/ask spread.
- At the time of writing (11 May 2015), if you bought AUD from DBS using SGD, it would cost you S$1.0641 per AUD. Selling one Australian dollar would net you $1.0415. That's a difference of more than 2%. In contrast, Oanda's rates were $1.0550 and $1.0534 respectively - a mere fraction of DBS' spread.
- Remember that DBS has one of the lowest spreads of Singapore banks.
- No minimum holding time required
- Oanda is a forex website. You aren't required to hold the currency you buy for a fixed period of time. In fact, interest is calculated by the second and credited daily. So you are free to withdraw your money - and interest - at any time without penalty.
- Higher interest rates
- Typically, Oanda offers higher interest rates. For example, Oanda is offering about 1.5% for AUD (remember, no minimum holding period), while DBS offers around 1.2% for a 6 month AUD fixed deposit.
- Greater flexibility
- You can buy and sell any amount (even $100) with Oanda. In contrast, DBS has a minimum purchase amount of S$5000. Other banks such as OCBC, Standard Chartered, HSBC have similar (or higher) requirements.
- Ability to use leverage
- If you have strong beliefs about how one currency will move, you can use leverage to your advantage. This can be a double edged sword. If you don't know what leverage is, don't use it.
- Counterparty risk
- It is hard to say which institution is more stable, Oanda or DBS. However, most Singaporeans would regard DBS the institution that is less likely to collapse.
My opinion: What's there not to like about Oanda? If you need to get used to the platform, start a demo account where you can trade "virtual" currency without any risk.