The multiyear fight over Capital One’s two-tier savings system is finally reaching its endgame, and it’s doing so with one of the largest consumer banking settlements in recent memory. A proposed $425 million payout—now before the U.S. District Court for the Eastern District of Virginia—aims to compensate millions of customers who kept their money in the bank’s legacy 360 Savings accounts while newer customers quietly earned far higher yields in Capital One’s 360 Performance product.
For a case that began as a niche dispute over interest rates, the stakes ballooned into something far bigger: a referendum on how banks treat loyal depositors in the era of high-yield online savings.
How the Dispute Took Shape
Beginning around 2019, Capital One rolled out the 360 Performance Savings account, an aggressively marketed, high-yield alternative that routinely posted rates between 3% and 4.35% APY. But existing customers—many of them long-time 360 Savings users dating back to Capital One’s ING Direct days—were not automatically upgraded, nor were they clearly told their accounts would pay as little as 0.3% APY on average.
The lawsuit claims Capital One continued to pitch the old account as competitive even as returns collapsed relative to newer products. Analysts estimate the interest-rate gap may have cost consumers more than $2 billion in missed earnings. Regulatory watchers at the Consumer Financial Protection Bureau (CFPB) tracked the case as it evolved, though no federal agency filed independent charges.
Capital One denied wrongdoing but agreed to settle in May 2025, citing the costs of protracted litigation.
Where the $425 Million Is Going
The settlement includes two separate restitution pools—one aimed at direct compensation, the other at boosting future interest for customers who stay with the bank.
Settlement Allocation Table
| Component | Amount | Purpose |
|---|---|---|
| Cash Fund | $300 million | Direct payments to affected customers based on balance size and duration in the 360 Savings account |
| Enhanced Interest Fund | $125 million | To raise yields on active 360 Savings accounts to at least twice the FDIC national average |
No traditional claim form is required; class members are automatically included. But the process isn’t entirely passive—customers must update contact and payment information through the settlement portal and, importantly, choose whether to keep or close their accounts before the October 2, 2025 deadline.
Those who close their accounts may receive roughly 15% more in immediate cash compensation, since they forgo future enhanced interest payments.
What Happens Next: Key Dates and Court Oversight
The settlement administrator—operating under court supervision—will calculate individual payouts using account histories supplied by Capital One. Everything hinges on the federal judge’s final approval scheduled for November 6, 2025.
Settlement Timeline
| Date | Event |
|---|---|
| August 15, 2025 | Notice distribution via email and mail begins |
| October 2, 2025 | Deadline for objections, payment-method updates, and account-closure elections |
| November 6, 2025 | Final approval hearing |
| 60 days after approval | Payments issued via direct deposit or mailed checks |
The court has emphasized that payments must be transparent, proportionate, and independently verified.
A Warning Shot to the Banking Industry
While the numbers grab headlines, the precedent is what banks are paying attention to. Capital One is required to maintain elevated rates—at least double the FDIC national average—on legacy 360 Savings accounts until the $125 million interest pool runs dry. That kind of forward-looking restitution is rare in financial settlements.
Consumer law experts say the case signals a shift: banks can no longer expect to launch new high-yield products while quietly letting older accounts wither. Regulators and courts are increasingly treating that gap as a form of deceptive segmentation.
The broader lesson for consumers? High-yield deposit markets shift quickly. Sticking with an old account out of habit can cost real money over time.
Eligibility and How to Participate
Borrowers don’t need to take dramatic steps to receive compensation, but they do need to pay attention to deadlines.
Quick Eligibility Guide
- Who qualifies: Anyone who held a Capital One 360 Savings account between Sept. 18, 2019, and June 16, 2025
- How compensation works: Automatically calculated; no claim form needed
- Payment options: Direct deposit or check (selection required by Oct. 2, 2025)
- Account closure option: Yields a higher immediate payout
- Enhanced interest: Applies only to customers who keep the 360 Savings account open
In practical terms, consumers simply need to confirm how they want to be paid—but the account-closure decision affects the size and timing of their compensation.
FAQs
1. Do I need to file a claim?
No. Inclusion is automatic, but you must update your payment method by Oct. 2, 2025.
2. How is my payment calculated?
By examining your balance history, how long funds stayed in the account, and whether you keep the account open.
3. What if I close my account?
You’ll likely receive a higher one-time payment but won’t receive future enhanced interest.
4. When will payouts arrive?
Within 60 days of final court approval—likely late 2025 or early 2026.
5. Can I opt out?
Yes, but you must follow the instructions provided in the mailed/e-mailed notice before the court’s deadline.
