Capital One has crossed a critical legal threshold in a closely watched class action lawsuit involving its popular 360 Savings account. On January 12, 2026, a U.S. federal judge granted preliminary approval to a revised $425 million settlement, paving the way for compensation to millions of current and former customers who allegedly earned less interest than they should have over several years.
If the settlement receives final approval later this year, it will result in automatic cash payments and future interest-rate improvements for eligible account holders. For many Americans who trusted the 360 Savings product as a competitive, high-yield option, this agreement represents a meaningful step toward restitution.
Background: What the Lawsuit Is About
The lawsuit centers on how Capital One managed its 360 Savings accounts beginning in late 2019. According to the plaintiffs, the bank marketed the account as a high-yield savings product but failed to increase interest rates in line with market conditions.
At the same time, Capital One launched a newer product, the 360 Performance Savings account, which offered substantially higher interest rates. Plaintiffs allege that customers holding the older 360 Savings account were not clearly informed about the availability of this higher-yield alternative and were left earning significantly less interest than similarly situated customers.
Capital One has denied all allegations and maintains that it acted lawfully. However, to avoid prolonged litigation and the uncertainty of trial, the bank agreed to a revised settlement after earlier versions were rejected by the court.
What the Revised $425 Million Settlement Includes
The newly approved agreement is more robust than previous proposals and combines backward-looking compensation with forward-looking financial benefits.
$425 Million in Cash Compensation
Under the revised terms, Capital One will create a $425 million cash fund to compensate eligible class members. Payments will be calculated on a pro rata basis, taking into account how long an individual held a qualifying 360 Savings account during the covered period.
The purpose of these payments is to compensate customers for the interest they allegedly missed out on because their accounts paid lower rates than the newer 360 Performance Savings accounts.
Mandatory Interest-Rate Increases Going Forward
In addition to the cash payments, Capital One has agreed to raise interest rates on active 360 Savings accounts to match those of 360 Performance Savings accounts for a minimum of two years.
Class counsel estimates that this forward-looking component could be worth approximately $530 million in additional value, depending on market conditions. This requirement was a key reason the court found the revised settlement to be fairer and more meaningful than earlier versions.
Who Is Eligible for the Settlement
Eligibility is tied to account history rather than current status. You may qualify if you:
- Held a Capital One 360 Savings account at any time between September 18, 2019, and June 16, 2025
- Are a current or former holder of that account
Customers who only held the newer 360 Performance Savings account and never had a 360 Savings account during the covered period are generally not eligible, as the lawsuit specifically targeted the older product.
Importantly, eligibility is determined automatically using Capital One’s records. There is no need to submit documentation or prove your status.
No Claim Forms and Automatic Payments
One of the most consumer-friendly aspects of this settlement is that no claim forms are required. If you are eligible, you will receive payment automatically once the settlement becomes final.
- Smaller payments are expected to be issued electronically
- Larger payments, typically $5 or more, will be sent by paper check to the last address Capital One has on file
Customers should ensure their contact details are up to date to avoid delays.
Legal Timeline and What Happens Next
The court’s January 2026 ruling was a preliminary approval, meaning the settlement has cleared an important hurdle but is not yet final.
Key upcoming steps include:
- A notice period allowing class members to review the settlement
- An opportunity for objections or comments
- A final approval hearing scheduled for April 20, 2026
If the judge grants final approval, the settlement will become binding and distribution of payments can begin shortly afterward.
Attorneys’ Fees and Court Oversight
The attorneys representing the class have stated they will seek up to 20 percent of the settlement fund in legal fees, along with reimbursement of approximately $1.6 million in litigation expenses. These amounts are subject to court approval, and the judge will determine what is reasonable.
Why This Settlement Is Significant
Earlier versions of the Capital One settlement were rejected because they offered limited relief and failed to address the alleged ongoing harm. Several state officials, including regulators from New York, formally opposed those earlier deals.
The revised agreement strikes a balance by providing:
- Cash compensation for past interest losses
- Guaranteed rate improvements for current savers
- Automatic payments without administrative hurdles
This combination was critical in convincing the court that the settlement adequately serves the interests of affected consumers.
What Eligible Customers Should Do Now
At this stage, most customers do not need to take action. However, it is wise to:
- Watch for official settlement notices
- Ensure your mailing address and contact details with Capital One are current
- Monitor your account or mail for payment updates after final approval
Additional instructions will be provided by the settlement administrator if needed.
Conclusion
The $425 million Capital One class action settlement, preliminarily approved in January 2026, represents a major development for millions of 360 Savings account holders. By combining automatic cash payments with improved interest rates going forward, the agreement aims to compensate customers for years of alleged underpayment while improving fairness for current savers.