Key Takeaways
- A federal judge has finalized a $425 million settlement, allowing affected Capital One 360 Savings customers to begin receiving payouts from the bank.
- Capital One sweetened the deal earlier this year after an initial settlement agreement was rejected by the judge.
- Depositors should start receiving payouts in the coming months.
The wait was worth it for Capital One 360 Savings depositors anticipating a settlement check from the bank.
Millions of current and former Capital One customers are in line to get larger payments as part of a revised $425 million settlement after a federal judge approved the deal Monday. The decision from Judge David Novak of the Eastern District of Virginia finalizes a lawsuit that has played out for nearly two years. Novak rejected an initial deal in November 2025, saying the payout didn’t fairly compensate account holders and accusing the bank of continuing to deceive depositors.
The settlement resolves a lawsuit accusing Capital One of creating two similarly named savings accounts – 360 Savings and 360 Performance Savings – that paid substantially different interest rates and leaving customers in the dark about which account they held. Plaintiffs said the resulting confusion caused customers to lose millions in potential interest.
Although the $425 million settlement price tag remains the same as before, the new deal awards more restitution money to affected customers. It also results in a substantial interest rate bump for existing account holders.
The new deal allocates all $425 million for payouts to compensate account holders for interest they missed out on. In addition, it calls for the bank to raise the interest rate on its 360 Savings account to match the yield on its 360 Performance account. (The previous rejected agreement called for Capital One to pay $300 million in restitution and to set $125 million aside to elevate interest rates for customers who still hold the legacy 360 Savings account.)
In rejecting the initial settlement, the court expressed concern that many 360 Savings account holders remained unaware that they were receiving far lower interest payments than they could be if they simply switched accounts. The amended agreement essentially protects those savers by raising their interest rate without requiring them to move their money.
Attorneys general from multiple states objected to the first deal, including New York Attorney General Letitia James, who brought her own lawsuit on behalf of her state’s customers. James and other involved attorneys general agreed to drop their lawsuits as part of final the settlement.
Here’s When You’ll Get a Payout, and How Much You’ll Receive
Customers who held a Capital One 360 Savings account for any period of time between Sept. 18, 2019 and June 16, 2025, are eligible for payouts. The amount you’ll receive depends on how long you held your account, how much money you had in the account and the number of affected customers that the $425 million will be divided among.
Affected customers should begin receiving their money within the next month or two. Those who are eligible should automatically receive payments without taking any action.
History of the Capital One 360 Savings Lawsuit
When the 360 Performance Savings account was launched in 2019 as essentially the successor to the legacy 360 Savings account, it offered a 1.9% interest rate vs. the 1% yield that the older product paid out, according to claims. The lawsuit argued that from that point the rates went in dramatically opposite directions, with the old 360 Savings account dropping to 0.3% annual percentage yield while the rate on the newer offering rose as high as 4.35% APY. Capital One was also accused of taking steps to make sure customers didn’t know they could be earning a much higher rate by switching accounts.
Three major lawsuits were filed against Capital One over its savings products. In addition to this case and the New York lawsuit, the Consumer Financial Protection Bureau sued the bank in January 2025 but later dropped the suit following a leadership change when President Donald Trump returned to the White House.
In June 2025, Capital One agreed to a pay $425 million to settle the Virginia case. Beginning in August, notices went out to customers who were in line to receive payouts. If the settlement had been approved, recipients would have started getting the money in late 2025 or early 2026.
But Judge Novak blasted the agreement as “neither reasonable nor adequate.” He said the deal would likely only compensate account holders for less than 10% of the potential interest they lost. He also noted that Capital One continued to pay a lower rate to 360 Savings customers and argued that the bank still hadn’t made proper efforts to notify savers that they could switch accounts and earn a higher rate.
He said the settlement notice didn’t make it clear to customers that many still have accounts that earn a fraction of the interest rate they could be earning. He also referred to an email Capital One presented as evidence that the bank was informing account holders of the higher-yielding savings account. Novak argued the email, titled “Earn a higher APY with a new account today,” was disguised as advertising rather than a notification.
“That email reads like a marketing pitch to open a new account, not to convert an existing, low-interest account into a vastly superior (but otherwise identical) account,” said Novak in his ruling.
About three-fourths of affected customers still have the lower-paying account, according to court documents.
Was the November Rejection a Surprise?
The 11th-hour denial upended a settlement that many legal experts expected would be approved. Courts rarely denied class-action settlements in the past, but rejections are becoming more common in recent years, says Eric Chaffee, a business law professor at Case Western Reserve University’s School of Law.
“Judge Novak’s decision fits within that growing trend of judges taking a harder look at settlements they view as unfair to class members,” says Chaffee.
Attorneys general from 18 states weighed in with objections to the settlement, and that type of high-profile input likely played a role in the judge’s taking a closer look at the case.
“When you have a lot of serious government lawyers and government agencies all lining up against the settlement, it’s going to draw more scrutiny than it would if you had a handful of dissident class members objecting to the settlement,” says Ira M. Steinberg, a partner at Greenberg Glusker who specializes in commercial and business litigation.
Depositors can learn more about Capital One payouts on this informational website set up by the settlement administrator.
