The article may contain affiliate links from partners. The words, opinions, and reviews are our own. Learn how we make money to support our financial wellness mission.
One type of government security whose payments are tied to inflation; specifically, to theConsumer Price Index for All Urban Consumers (CPI-U). Investors buy TIPS and then are paid interest every six months on the security’s inflation-adjusted principal. When a TIPS matures, the owner is paid the inflation-adjusted principal or, if deflation has occurred, the original principal. TIPS are issued in terms of 5, 10, and 20 years.
