Santander extends Zero account to take on rivals

Santander today stepped up its efforts to cross-sell products to customers by making its fee-free current account more widely available.

The Spanish banking giant set up its Zero Current Account this year to coincide with the rebranding of its Abbey and Bradford & Bingley businesses, but only made it available to mortgage customers.

However, it is extending the eligibility criteria from 8 March to include people who have a Santander investment product. The bank said 2.5 million Britons would be eligible to open one of the accounts.

The account does not have overdraft charges, it does not levy fees for payments that bounce, and customers will not be charged to make cash withdrawals or purchases abroad. It pays interest of 6% for the first year on balances of up to £2,500, providing a customer pays at least £1,000 into the account each month.

The group has made no secret of its plans to expand its market share, for example by cross-selling as many different products as possible to customers.

It has also waived the 3% balance transfer fee for mortgage and current account customers who take out its Zero credit card, and it does not charge booking fees on mortgages for people who hold their main current account with the group.

Santander said it was able to offer more competitive products through improving its efficiency at a faster rate than its British rivals.

Vim Maru, director of retail products at Santander UK, said: "When we launched the Zero Current Account we said that Santander was uniquely placed amongst UK banks to change the way it does business.

"Extending the eligibility to allow many more people access to fee-free banking is another example of our new approach."

The group recently reported a 30% rise in annual profits at its British arm to £1.54 billion for the year to 31 December.