Some Capital One customers are set to receive a settlement payout for lost interest on their savings accounts, although the amount each person gets likely won’t cover the full portion of interest payments they missed out on when their money sat in a lower-earning account.
A judge in the U.S. District Court for the Eastern District of Virginia in June gave preliminary approval of the $425 million settlement, which came after Capital One depositors filed a class-action lawsuit against the bank. A final approval hearing is set for Nov. 6.
In the lawsuit, customers accused Capital One of creating two similarly named savings accounts that at times earned substantially different interest rates, then leaving some depositors in the dark about which account they held. The alleged deception cost customers more than $2 billion in potential interest over about seven years, the Consumer Financial Protection Bureau said in January.
For Capital One, the settlement ends one of three lawsuits it has faced involving its savings accounts. The CFPB sued the bank in the final days of the Biden administration, but later dropped the lawsuit along with many other cases following a leadership change after Donald Trump returned to the presidency. New York Attorney General Letitia James filed a lawsuit against Capital One in May, and that case is still pending. The Virginia settlement agreement was announced two days before Capital One completed its high-profile merger with Discover.
There are a number of reasons why Capital One, which denies any wrongdoing, would be motivated to settle, says Julie A. Hill, dean of the University of Wyoming’s College of Law and an expert in banking law.
“You’re over and done with it,” Hill says. “You’re not spending lots of money on your lawyers. You’re not going to a jury that might or might not be sympathetic. I guess they must have thought that seemed like a fair amount of money given what they expected to spend to otherwise defend and end the lawsuit.”
The $425 million sum is considerably lower than the $2 billion figure the CFPB accused the bank of shorting its customers, but that is to be expected, says Ira M. Steinberg, a partner at Greenberg Glusker who specializes in commercial and business litigation.
“Once the parties realistically evaluate the other’s counterarguments, get feedback from a mediator on the strengths and weaknesses of their case, and make the difficult compromises needed to reach a settlement, it is very common for a case to settle for substantially less than the splashy number set forth in the complaint,” says Steinberg.
[See: Best High-Yield Savings Accounts]
Explaining the Lawsuit
The complaint against Capital One stems from two savings accounts, the 360 Savings account the bank began offering in 2013 and the 360 Performance Savings account it introduced in 2019. The flagship 360 Savings account was advertised as offering “one of the nation’s best savings rates,” according to the complaint filed in the New York lawsuit. However, when the 360 Performance Savings account was launched, the new high-yield savings account paid a 1.9% annual percentage yield, while the legacy 360 account only paid 1%.
From there, the interest rate on the 360 Performance Savings account skyrocketed, eventually reaching 4.35% APY, according to the lawsuit. Meanwhile, the rate on the legacy 360 Savings account pulled a 180, dropping to 0.3% APY and then staying put.
Plaintiffs in the lawsuits against Capital One say the bank didn’t make it clear to customers of the legacy account that the accounts were different and that those depositors weren’t earning the newly advertised rates. They say that Capital One further confused customers when it “scrubbed” its website of any mention of the 360 Savings account and even redirected the old product page to the 360 Performance Savings account page. Finally, they accuse the bank of instructing its employees to only mention the new product to existing customers if explicitly asked about it.
The argument is that many customers would have changed accounts to earn the much higher rate if they had known about it. (About three-fourths of 360 Savings account holders still haven’t switched over to the 360 Performance Savings account, according to the Virginia settlement notice.)
[Read: Best CD Rates.]
Here’s Who Qualifies for the Capital One Settlement Money
Anyone who held a 360 Savings account with Capital One for any length of time between Sept. 18, 2019, and June 16, 2025, is eligible to receive a portion of the payout.
If you held a 360 Savings account during this time, you should receive a notice via mail or email by Aug. 15 with instructions on how to claim your compensation. Customers who qualify for payouts of $5 or more will be sent their money by check automatically; no claim form needs to be submitted. Those who will get payments of less than $5 must follow instructions to elect to receive payment electronically. Any recipient who prefers to receive payment electronically can also elect that option.
You should expect to receive your Capital One settlement payment within 60 days of the court’s final approval, according to the settlement agreement.
Hill says the appointed settlement administrator will have a list of affected customers, likely obtained from Capital One’s records, and will be able to reach out to many of those who qualify. However, they may not have updated contact information for some customers.
“Typically they’ve made some attempt to identify the universe of impacted people,” says Hill. “But you know they’re not going to be perfect because maybe someone had an account and they closed their account and they moved and now when they try to send the notice it doesn’t go through.”
A settlement website, CapitalOne360SavingsAccountLitigation.com, will be set up to provide more information, according to the settlement agreement. Recipients who wish to receive payments electronically can follow instructions available on the site.
[See: Best High-Yield Checking Accounts]
How Much Capital One Settlement Money Will You Get?
The $425 million Capital One settlement money is split into two buckets.
Capital One will pay $300 million to affected customers to make up for interest payments they missed out on. The payouts will be proportionate to how much potential interest you would have earned, and the amount you receive will also depend on how many claimants the $300 million must be divided among. So, if you kept a large balance in your 360 Savings account and maintained that account for years, you’ll get more money than someone who didn’t keep much in the account or only had it open for a short time. It’s unlikely your payment will cover the full amount of interest you would have received had your savings been in the higher earning account, experts say.
Capital One will also pay $125 million as additional interest payments to existing customers who still have the legacy 360 Savings account. Those account holders will now earn at least double the national average for savings accounts. The national average is 0.38% as of June 16.
James hasn’t announced any plans to withdraw New York’s lawsuit in response to the class-action settlement.
“I think they’ll still move forward,” says Hill. “I don’t think that it’s going to preclude New York from making claims under their law. Now, (Capital One) might have some sort of defense that they’ve already paid for this and it’s a nationwide class action, but New York is typically kind of aggressive about these sorts of things, so I expect that suit will continue for a while.”
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Find Out How Much Settlement Money Capital One Owes You originally appeared on usnews.com
Update 07/02/25: This story was previously published at an earlier date and has been updated with new information.
