TIPS (Treasury Inflation-Protected Securities)

Treasury Inflation-Protected Securities (TIPS) are a type of U.S. government bond designed to protect investors from inflation. Unlike regular bonds, the principal value of TIPS increases with inflation (as measured by the Consumer Price Index) and decreases with deflation. This means that when you hold TIPS, your investment retains its purchasing power over time. Investors receive interest payments, which are calculated based on the adjusted principal, typically every six months. At maturity, you receive either the original or the inflation-adjusted principal, whichever is higher. TIPS are a reliable choice for those seeking to safeguard their money against rising prices.