By Jonathan Stempel

May 16 (Reuters) - Capital One COF.N 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.N 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.

(Reporting by Jonathan Stempel in New York; Additional reporting by Nate Raymond; Editing by Chizu Nomiyama)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))