The Credit Power Index measures the spread between the cost of borrowing and the benefits of saving by looking at the difference between CD rates at four terms and the rates of four popular loan products at the same terms; the higher the index, the worse things are for consumers. The index peaked at 25.46 in May 2009, and while plummeting loan rates have precipitated some recovery, rock-bottom deposit rates have prevented a full rebound to pre-recession levels. As of the end of July, the index stood at 22.44, a small improvement from 22.51 the preceding month.
seen their numbers swell since the recession as Americans seek out better rates. While credit unions have not been immune from a falling interest rate climate, their members are getting much better rates than bank customers are. For instance, the average interest rate on the 12-month certificate of deposit declined from 4% in January 2007 to just 0.47% at the end of July. While the subset of banks are in line with that national average, the same product at a credit union offers a 0.73% return -- nothing mind-blowing, but still more than 55% higher than the national average for banks. Indeed, credit unions beat banks on deposit rates across the board. Banks actually have an advantage when it comes to mortgage rates, charging a 3.32% APR on 60-month adjustable rate mortgages to the credit unions' 3.77%. (When we compared the two institution types on fixed mortgages in December we found a statistical dead heat, though some experts argued that credit unions have an advantage in that they tend to charge lower fees.) But credit unions won on the other loan rates used in calculating the Credit Power Index, including personal unsecured loans (charging 10.49%, to 12.54% at banks), 36-month home equity loans (5.61% at credit unions, 6.75% at banks) and 48-month new auto loans (3.68% at credit unions, 4.72% at banks).