Capital One has agreed to pay $425 million to settle a class action lawsuit involving its 360 Savings account.

Capital One is settling a class action lawsuit brought against the bank holding company for allegedly freezing its savings account rates for several years, effectively barring customers from bagging billions in interest rate payments.

The settlement means Capital One customers have a chance of being repaid for the lost payments. The deadline to get a part of the $425 million settlement is Thursday, Oct. 2.

Although agreed upon, the settlement awaits court approval, as a hearing is scheduled for Nov. 6.

Here's everything you need to know about the lawsuit and getting a piece of the settlement.

Who sued Capital One?

The $425 million settlement stems from a class action lawsuit filed in the U.S. federal court in Alexandria, Virginia, against Capital One by customers in 2024, according to a notice obtained by USA TODAY. Earlier this year, the Consumer Financial Protection Bureau (CFPB) also sued Capital One, alleging the company froze its rate at a low level for years, despite increasing national rates. As a result, customers were cheated out of more than $2 billion in lost interest payments, according to the CFPB.

In a statement on Jan. 14, the CFPB said Capital One marketed its 360 Savings account as "high interest" with a variable rate that was "one of the nation's best," and that consumers would earn significantly more interest than the average savings or money market account. The CFPB described these representations as "false or otherwise misleading."

The CFPB dropped its lawsuit in February, but Capital One has agreed to pay the $425 million settlement for the separate class action lawsuit filed in 2024.

The CFPB and customers weren't the only ones to sue Capital One, as Attorney General Letitia James sued the company in May for "misleading its online savings account customers about the interest rates they would receive, allowing the bank to avoid paying the high interest rates that it promised to customers."

On Wednesday, Sept. 24, James announced that she led a bipartisan coalition of 17 other attorneys general in opposing the proposed $425 million class action settlement that her office said would "shortchange Capital One customers who were cheated out of more than $2 billion in unpaid interest."

James and the coalition filed an amicus brief, a document that provides the court with additional information, arguments or expertise that the parties involved in a case may not otherwise offer, on Sept. 24. The document urges the court not to approve the $425 million settlement and argues that it "fails to hold Capital One accountable and would ultimately benefit Capital One at the expense of the customers it deceived and underpaid."

USA TODAY contacted Capital One on Wednesday, Oct. 1, but has not received a response.

What is Capital One accused of?

The lawsuits filed against Capital One accused the company of marketing its 360 Savings accounts as "high interest" accounts with "one of the nation's best savings rates." The account claimed it "would earn its customers more than an average savings account."

Yet, the attorneys general, customers and the CFPB alleged that while interest rates rose across the country, Capital One kept the interest rates for its 360 Savings accounts artificially low.

The company is also accused of creating 360 Performance Savings, a different type of savings account that provided higher interest rates that were, at some points, 14 times higher.

It is estimated that Capital One has allegedly cost customers over $2 billion in interest payments.

What are the terms of the settlement?

Customers who held a Capital One 360 Savings account between Sept. 18, 2019 through June 16, 2025, are eligible for a portion of the settlement.

According to the Capital One settlement website, no claim form is required to get paid. All settlement class members are automatically eligible to receive a class cash payment.

Members can choose to receive payment electronically instead of a check.

How much money will claimants receive?

According to the settlement news release, the $425 million settlement will be split into a $300 million Cash Settlement Fund that will be used to make cash payments to all 360 Savings account holders in relation to their account balances; and $125 million to "be used to make increased interest payments going forward for customers who continue to maintain 360 Savings accounts."

Customers who have already closed their 360 Savings, or choose to close it on or before Oct. 2, will receive a class cash payment that is currently estimated to be approximately 15% larger than it would be if their account remains open.

Customers can still close their accounts after receiving the larger payment.

The deadline to choose a payment method is Thursday, Oct. 2.

What happens if I don't accept the settlement?

Customers can choose to exclude themselves from the settlement. That option allows them to separately sue Capital One at their own expense. Choosing to opt out means customers will not receive payment from the settlement fund.

Michelle Del Rey is a trending news reporter at USA TODAY. Contact her at mdelrey@usatoday.com

Deadline to claim part of $425M Capital One settlement is near. What to know.