Capital One Settles for $425 Million

This week, millions of both current and former customers of Capital One learned they’ll be receiving payments following a federal judge’s approval of a $425 million settlement.

Judge David Novak from the Eastern District of Virginia finalized the agreement on Monday. This settlement was reached to address claims that the bank was directing customers away from accounts that offered significantly higher interest rates.

The case has been ongoing for almost two years. In fact, last November, Judge Novak rejected the initial settlement proposal, stating that it did not adequately compensate account holders.

Capital One has agreed to pay $425 million primarily due to allegations that it opened two savings accounts—namely, 360 Savings and 360 Performance Savings—with very similar names. They failed to clarify the differences between the accounts and the interest rates varied significantly.

Legal documents reveal that many customers were confused about which accounts they held, resulting in substantial losses in interest payments.

Customers who maintained a Capital One 360 Savings account between September 18, 2019, and June 16, 2025, are eligible for compensation. The payment amount will vary based on how long each customer held the account, their account balance, and the total number of claimants.

Payments to eligible customers are expected to begin within the next month or two, without any required action on their part.

The lawsuit indicates that the 360 Performance Savings account was launched in 2019 with an interest rate of 1.9%, while the original 360 Savings account yielded 1%. However, this changed dramatically later on; 360 Savings’ interest rate fell to an annualized yield of just 0.3%, while 360 Performance Savings’ soared to 4.35%.

There are also accusations that Capital One attempted to obscure the fact that customers could easily earn higher rates by switching accounts.

The initially proposed settlement was turned down because it failed to account for lost interest, and it didn’t inform checking account holders about the potential benefits of switching to the higher-yield accounts.

According to court documents, about three-quarters of the affected customers are still holding accounts with lower values. The new settlement requires the bank to raise the interest rate on the 360 Savings account to match that of the 360 Performance account, ensuring that customers without other options can still benefit.