Capital One Settles $425 Million Lawsuit Over Misleading Capital Account Interest Rates

Capital One has reached a $425 million settlement in response to allegations regarding its handling of interest rates on its 360 Savings accounts, resolving a class action lawsuit that highlights significant consumer concerns. The settlement addresses grievances from customers who were allegedly misled about the interest benefits of the 360 Savings accounts from September 18, 2019, to June 16, 2025. Claimants assert that Capital One manipulated interest rates, withholding more than $2 billion in potential earnings from consumers during a period of national rate increases, while promoting the account as offering high-interest benefits.

The controversy centered on claims that Capital One froze the interest rate of the 360 Savings account at a low 0.3%, neglecting to inform customers of a more lucrative option, the 360 Performance Savings account, which offered rates up to 4.3% following Federal Reserve rate hikes in 2022. Despite marketing the former as a high-yield savings account, the bank omitted crucial information about the existence and comparative advantages of the newer account, sparking allegations of deceptive practices.

Although the Consumer Financial Protection Bureau (CFPB) pursued a related lawsuit, it eventually dropped its case. Regardless, Capital One chose to settle the concurrent class action suit without admitting wrongdoing, offering monetary compensation to affected customers. Under the terms of the settlement, $300 million will be distributed as prorated payments to eligible account holders, reflecting the differential interest they would have earned had their savings accrued at the higher rate available to the Performance Savings account. An additional $125 million will compensate ongoing 360 Savings account holders with interest payments exceeding the FDIC's calculated national average rate.

Customers who had a Capital One 360 Savings account between September 18, 2019, and June 16, 2025, are eligible for part of the settlement, with specific compensation contingent upon account status and decision to maintain or close the accounts by October 2, 2025. Those who close their accounts by this date could receive an estimated 15% larger payout, but remaining account holders will continue to benefit from enhanced future interest payments. The settlement awaits final court approval, with a hearing scheduled for November 6, 2025. Updates and instructions regarding claim submissions and payment methods are detailed on the official settlement website.

The settlement reflects broader implications for financial institutions facing scrutiny over transparency and customer satisfaction in the management of consumer accounts. As clients await disbursement, Capital One’s response illustrates a significant step towards resolving claims and restoring trust amidst intensive regulatory inspection.