Treasury Inflation Protected Securities
Treasury Inflation Protected Securities, or TIPS, are bonds sold by the United States government where the amount you are owed automatically increases when prices across the economy rise over time. This protects your savings from losing purchasing power as everyday goods become more expensive.
Where it is explained in full
Inflation: the quiet subtraction. A number that grows can still buy less. Real return is what you earned minus what prices did, and the arithmetic is slightly less obvious than subtraction.
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Words beside it
- Inflation
Prices rising over time, which shrinks what money buys.
- securities
Financial instruments like bonds or stocks that you can hold or trade to invest your money. They represent a claim on something of value, such as a loan to a government or company.
- securities and exchange commission
A United States government agency that makes and enforces rules for buying and selling investments like stocks and bonds. It exists to protect regular people from fraud and unfair practices in financial markets.
- treasury
The part of the United States government that borrows money on behalf of the country by selling bonds and notes to investors. When you buy one, you are lending money directly to the federal government.
- Treasury bill
Government debt of a year or less, sold at a discount.
- Treasury note
A Treasury note is a loan you make to the United States government that lasts between two and ten years. The government pays you interest twice a year and returns your money when the time is up.
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