Treasury Inflation-Protected Securities (TIPS)

Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds designed to safeguard investors against inflation. Unlike regular bonds, TIPS adjust their principal value based on changes in the Consumer Price Index (CPI), which measures inflation. When inflation rises, both the value of the bond and interest payments increase, ensuring that your investment maintains its purchasing power. At maturity, you receive either the original principal or the adjusted amount, whichever is higher. This feature makes TIPS a reliable option for those looking to protect their investments from losing value due to rising prices.