Savers who stashed money in what Capital One told them were high-yield savings accounts are suing the bank after learning they earned just 0.3 percent interest instead of more than 4 percent — costing them “millions of dollars.”
Interest rates on savings accounts generally rise or fall in line with the Federal Reserve’s benchmark interest rates.
When the Fed began raising rates from nearly 0 percent in March 2022 to more than 5 percent in April 2023, holders of high-interest or high-yield savings accounts at most other banks enjoyed significantly higher interest on their deposits.
But customers with Capital One’s “360 Savings” account claim they were rejected by the bank. Instead of raising rates on those accounts, Capital One froze rates at a record low of 0.3 percent and chose not to notify account holders, the plaintiffs allege.
The bank also created a new high-yield savings account with a very similar name, ‘360 Performance Savings’, and high rates, which was heavily advertised.
Capital One stopped offering its old 360 Savings Account and set a low interest rate of 0.3 percent. It then created a similar-sounding 360 Performance Savings Account that it used to advertise competitive rates and failed to inform 360 Savings Account holders of the change
The gray line represents the Federal Funds Rate set by the US Federal Reserve. In general, interest rates on high-interest savings accounts move in line with the Fed’s rate. When interest rates were low during the Covid pandemic, Capital One capped the interest rate on ‘360 Savings’ accounts at 0.3 percent and raised the interest rate on a new high-yield savings account with a similar-sounding name
Capital One has closed the old low-interest 360 Savings Accounts to new customers and removed all references to them on their website.
At the same time, she kept deposits from old customers, the lawsuit said.
The bank then used the similar-sounding 360 Performance Savings Account to offer a competitive and dynamic rate, which now stands at 4.35 percent.
“Capital One left its 360 Savings account holders in a lower-yield account and hoped they wouldn’t notice,” the lawsuit says. “There were and are no material differences between these two accounts, other than the interest rate.”
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Account holders have also expressed confusion online at Capital One because they have two similar-looking savings accounts that pay vastly different interest rates.
“I have a Capital One 360 savings account. They currently advertise 3.0 percent APY. However, my account is still only paying 0.3 percent APY,” wrote a user on
“It almost seems like these banks only care about money,” they added.
However, many account holders only noticed much later that their accounts earned so little interest.
One plaintiff in the lawsuit, Samuel Hans of Illinois, had had a Capital One 360 Savings account since 2013, when his ING Direct savings account was converted to a Capital One account after it acquired the old bank.
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One user on
One 360 Savings account holder shared a screenshot of Capital One’s online portal showing that his deposits were earning just 0.3 percent interest
The lawsuit alleges that Hans lost more than $1,000 in interest between September 2019 and May 2023.
When Hans contacted Capital One to request retroactive interest, he was told that it was the account holders’ responsibility to ensure they earned the highest possible interest on their savings accounts and refused to pay him back.
Celia Edwards Karam, president of Capital One’s retail bank
“I don’t expect Capital One to notify me every time interest rates change. I do expect that Capital One will not keep me in a low-interest savings account while I publicly advertise a similar-sounding savings account with a significantly higher earned interest rate,” Hans wrote in an email to the bank.
Plaintiffs filed the lawsuit in the U.S. District Court for the Eastern District of Virginia. A hearing date has been set for February 14, 2024.
DailyMail.com reached out to Capital One for comment on the ongoing lawsuit but did not receive a response.
In a statement to the Wall Street JournalCelia Edwards Karam, president of Capital One’s retail bank, said: “Over the years, we have sought to greatly simplify our savings offering, most of which we inherited through multiple acquisitions.”
Capital One noted in a lawsuit that the annual return on its Savings 360 account was disclosed to its customers in monthly statements.