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Santander offers free railcard to students

Santander bank logo24/06/13

By Matt Gibson

Santander is hoping to attract a raft of new student customers by offering a free railcard to young people who open a current account.

The ever-popular Young Persons Railcard, which knocks a third off the cost of most train fares, is available to people aged between 16 to 25 years old and normally costs £30 a year.

Santander takes over exclusivity rights for the railcard after signing a multimillion-pound, four-year deal with the Association of Train Operating Companies (ATOC).

Until now, Natwest had held the contract since 2004.

The move is part of the bank's strategy to increase its number of current account holders by attracting students, whom it hopes will remain with the bank after they have graduated.

Banks are drawing their battle lines early ahead of new rules due to come into effect later this year, which will remove many of the hurdles currently associated with customers looking to switch current accounts.

Under the new laws, it will take a maximum of just seven days for a customer to switch accounts, down from anywhere between 18 and 30 days previously.

Those who switch will also have any incoming payments directly changed to their new account.

To date, Santander has in excess of one million customers signed up to its flagship 123 current account, which offers cashback on household direct debits and in-credit interest for £2 a month.

ATOC estimates that the card will reduce the average student's outgoings on rail travel by £174 a year.

Presently, there are 1.4 million railcards for 16 to 25-year-olds in circulation.

Steve Pateman is head of UK Banking at Santander.

He said: "We have been working hard on our switching proposition and on convincing customers to switch to Santander from other banks - so much so that 250,000 of them have done so in the last 12 months."

Describing the deal, he said it is "a significant step towards our goal of increasing the number of primary banking customers by securing a substantial increase in student account openings".

There are no fees attached to Santander's student current account and it has a variable interest rate of 1 per cent on balances up to £500.

Additional features also include online and mobile banking. The bank has 44 branches of university campuses.

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