Banks battle to lure on-campus customers before the start of the new academic year
Santander has fired the first shot in the battle to win the hearts and minds of student bank customers with a free railcard. It has landed an exclusive contract with the Association of Train Operating Companies to provide the 16-25 Railcard, which offers a third off most tickets.
The card, which normally costs £30 a year, will be valid for four years to anyone in this age group, in full-time education, and who opens a student account for the first time. Atoc says it will typically save £174 on rail fares each year.
For many years NatWest offered its student account holders the railcard, but dropped it in 2011 to the anger of some customers.
Santander's student current account is fee-free with a variable interest rate of 1% on credit balances up to £500. Overdrafts are free up to £2,000 depending on year of study. The bank has 44 branches on university campuses.
Steve Pateman, head of UK banking at Santander, says: "Student accounts are an important sector for us, and getting a free railcard is a great opportunity to save money on travel. We also offer online banking, branches on campus, apps and mobile banking – everything a student needs."
A spokeswoman for financial data provider Moneyfacts says the railcard is a "great incentive". She adds: "Making the £30 saving on the price, along with the discounts on commute costs for four years, could prove a popular choice when deciding on what account to take out."
However, students looking to open an account may want to see what the other banks offer over the coming weeks before deciding where to take their business.
In the past, the banks would try to outdo each other over which could offer the most attractive deal, although that battle has waned in recent years.
Competition among banks and building societies is set to get fiercer in the autumn, when new rules come into place to take much of the hassle out of switching current accounts.
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