Treasury Inflation-Protected Securities (TIPS) are US government bonds whose principal adjusts with CPI inflation. Interest is paid semi-annually as a fixed coupon rate applied to the inflation-adjusted principal — both principal and coupon income grow with inflation. Maturities: 5, 10, 30 years. Real (inflation-adjusted) yields currently 1-2% across maturities. At maturity, you receive the inflation-adjusted principal or original face value, whichever is higher. Buy via TreasuryDirect or TIPS ETFs (VTIP, TIP, SCHP). TIPS make sense when inflation expectations are rising or for inflation hedging in retirement portfolios. Tax-inefficient (taxed on inflation adjustments before realization) — hold in tax-advantaged accounts.
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TIPS
August 22, 2026 · Aditya Gupta
Investing
Related terms
401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
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