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Oanda fees explained

Dec 2018
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Overview of Oanda fees and charges

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When it comes to brokerage fees Oanda shows a mixed picture: some fees are high but some are low. First you need to figure out your approach or you should use our questionnaire to be able to tell whether Oanda fees are an advantage for you. Continue reading about Oanda fees and charges to see if this is the right brokerage for you or a similar broker like Pepperstone or FXCM is better for you.

Here's a high level overview of Oanda's fees

Oanda Fees snapshot
Assets Fee level Fee terms
US stock fee - Not available
EURUSD fee Average The fees are built into spread, 1.3 pips is the spread cost
US tech fund fee - Not available
Inactivity fee Low €10 per month after 2 years of inactivity

Oanda fees
Oanda fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely due to the fact that online brokerages' businesses can be much better scaled: From a purely technical standpoint it doesn't make that much of a difference for them if they have 100 or 5000 clients.

This is not to say however that they don't have any fees at all. They make money by charging you at various events for various rates. Usually you need to keep an eye on these 3 types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually do a trade, i.e. buying an Apple stock or an ETF. What you pay is either a commission, a spread or financing rate. Some brokers apply all of these.
    • A commission is either based on the traded volume or it is fixed.
    • A spread is the difference between the buy price and the sell price
    • Financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These occur related to some operations you make in your account, i.e. depositing money to your account, withdrawing money from it or not trading for an extended amount of time.

We compare Oanda fees with its closest competitors, Pepperstone and FXCM.

Oanda fees
Oanda trading fees

Oanda's trading fees are low which makes it suitable for you even if you trade often (i.e. multiple times a week).

Let's break down the trading fees into the different asset classes available at Oanda.

Trading fees

Oanda's trading fees are average.

It is super hard to compare trading fees for forex brokers. What we did at Brokerchooser? Instead of quoting long fee tables, we compare brokers by calculating all fees of a typical trade for two currency pairs.

  • EURUSD, a popular currency pair
  • EURGBP, another popular currency pair

The typical trade means that you buy for $20,000 using 30:1 leverage, and sell it after a week.

This super catch-all benchmark includes spreads and financing costs for all brokers.

Here is the verdict.

Oanda forex trading fees
Oanda Pepperstone FXCM
EURUSD benchmark fee $19.4 $19.3 $13.8
EURGBP benchmark fee $14.7 $11.6 $16.4

Financing rates

Oanda financing rates are high.

If you want to trade on margin and prefer to hold your positions long, financing costs can be significant.

Oanda yearly financing rates
Oanda Pepperstone FXCM
Apple financing rate - - -
Vodafone financing rate - - -
EURUSD financing rate 4.5% 4.3% 3.1%
EURGBP financing rate 3.0% 2.0% 3.1%

Oanda fees
Oanda non-trading fees

When it comes to looking at all the non-trading fees Oanda is an average broker. This means that some of the non-trading fees are high, but the others are low or not charged at all.

Non-trading fees include various brokerage fees and charges at Oanda that you pay not related to buying and selling assets. Among some others, typical non trading fees are withdrawal fee, deposit fee, inactivity fee and account fee.

A high level overview of how Oanda stacks up in non-trading fees
Oanda Pepperstone FXCM
Withdrawal fee $35 $20 $0
Deposit fee 0 0 0
Inactivity fee Yes No Yes
Account fee No No No

Oanda fees
Oanda deposit fee

Deposit fees are applied when you send money to your trading account from your bank account. Usually brokers don't charge money for that and Oanda is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods Oanda offers.

Oanda deposit methods
Oanda Pepperstone FXCM
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets Yes Yes Yes
Deposit fee 0 0 0

Oanda fees
Oanda withdrawal fee

Unfortunately, quite like the majority of the online brokers we have reviewed Oanda does charge a withdrawal fee of $35 for the bank transfer. This means that you need to pay this amount of money when you transfer your money back to your bank account. It's up to you to decide whether this is a high amount or not as it's dependent mostly on the size of the transferred amount.

Oanda withdrawal fees and options compared
Oanda Pepperstone FXCM
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes Yes
Electronic wallets Yes Yes Yes
Withdrawal fee with bank transfer $35 $20 $0

Oanda fees
Oanda inactivity fee

Oanda does apply an inactivity fee and it is €10 per month after 2 years of inactivity. This means that you need to be strategic about your trading activity to avoid getting charged after a longer time of no trade. The fact that Oanda charges an inactivity fee makes it less ideal for you if you are a buy and hold investor.

Oanda has low inactivity fee.

Oanda Pepperstone FXCM
Inactivity fee Yes No Yes
Inactivity fee €10 per month after 2 years of inactivity No inactivity fee $50 per year after one year of inactivity

Read more about Oanda inactivity fee on their own site.

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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