May 16 (Reuters) - Capital One agreed to pay

$425 million to settle nationwide litigation accusing it of

cheating savings account depositors out of much higher interest

rates by not telling them they could move their money to

higher-yielding accounts.

A notice describing the preliminary settlement was filed on

Friday evening in the Alexandria, Virginia federal court. The

accord requires a judge's approval.

Depositors said Capital One falsely promised high interest

rates on their 360 Savings accounts, while quietly offering much

better rates to new customers on the similarly named 360

Performance Savings accounts.

The 360 Savings depositors said Capital One froze their

rates at 0.3%, and offered rates to 360 Performance Savings

depositors that peaked at 4.35% early last year.

Capital One, based in McLean, Virginia, did not admit

wrongdoing in agreeing to settle, the notice shows. The 360

Performance Savings accounts now yield 3.6%.

The U.S. Consumer Financial Protection Bureau filed a

similar lawsuit in January, before President Donald Trump took

office, but dropped the case in late February as the White House

ended most of the agency's enforcement activity.

On Wednesday, New York Attorney General Letitia James sued

Capital One on behalf of 360 Savings depositors in that state.

The bank rejected James' claims and said it would defend itself

in court.

Capital One expects to complete its $35.3 billion

takeover of Discover Financial Services ( DFS ) on May 18.

The case is In re Capital One 360 Savings Account Interest

Rate Litigation, U.S. District Court, Eastern District of

Virginia, No. 24-md-03111.