Santander’s decision to introduce a fee free current account has been described as a “very significant” development in the banking sector as it may drive other financial institutions to offer better deals to customers.
Head of consumer finance at lovemoney.com Ed Bowsher observed that Santander is now able to implement competitive products as its balance sheet is stronger and it is eager to be a contender in UK sector.
“That’s great for consumers – bring it on,” he said, adding that Tesco, Virgin and the new Metro Bank may now bring in similar deals.
However, only those holding or looking for a mortgage with Abbey or Bradford and Bingley will be able to take advantage of the features of the account, which include no overdraft fees or authorised charges, as well as no charges for use of automated teller machines worldwide and no foreign exchange fees.
Given that it is only open to certain customers, Mr Bowsher noted that it would be interesting to see how people will react.
“Obviously, it is a big tax, the fact that you have got to have your mortgage with Abbey,” he remarked.
By Sarah Adie