Alternatives to Foreign Currency Fixed Deposits

Oanda is an online forex (foreign exchange) trading website. Although it is based in Canada, anyone can open an account and start trading foreign currency.

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.

Disadvantages

• 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.