TREASURY PRODUCTS

Treasury Inflation-Protected Securities (TIPS)

Treasury Inflation-Protected Securities, or TIPS, guard your savings from inflation. TIPS pay a fixed rate of interest. The value of the principal of a TIPS is adjusted semiannually, based on changes in the Consumer Price Index. The interest rate is applied to the inflation-adjusted principal, not the original face value. So, if inflation occurs throughout the life of your security, every interest payment will be greater than the one before it. The converse is true however, in the event of deflation. Upon maturity, Treasury will pay the greater of either the inflation-adjusted principal or the original face value.

To buy TIPS through the U.S. Treasury, you place a competitive or noncompetitive bid through the auction process.

  • Noncompetitive: You agree to accept whatever yield is determined at auction.
  • Competitive: You specify the yield you will accept at auction.

Use TIPS to:

  • Diversify your investment portfolio
  • Supplement retirement income
at a glance
Original Issue Rate: The yield awarded in the original corresponding competitive auction.
See rates in recent auctions
Minimum purchase: $1,000
Maximum purchase: Non-competitive: $5 million
Competitive: 35% of offering amount
(see types of bidding)
Investment Increment: Multiples of $1,000
Issue Method: Electronic entry into your account

Rates & Terms

  • TIPS are issued in terms of 5, 10, and 20 years.
  • Interest is paid on a semiannual basis. Your semiannual interest payments and maturity payment are calculated based on the inflation-adjusted principal value of your security.
  • The value of the principal is adjusted semiannually for inflation.
  • Inflation-related information regarding previously issued TIPS is available here.
  • TIPS can be held until maturity or sold before maturity.
  • You cannot reinvest TIPS into another security. When the security matures, we deposit its principal into the bank account of your choice.

Redemption Information

  • Minimum Term of Ownership: None
  • Interest Earning Period: To maturity

Tax Considerations

  • Interest income is exempt from state and local income taxes.
  • Interest income is subject to Federal income tax.

TIPS-Related FAQs

  • Do I receive semiannual interest payments if I own a TIPS?
  • What happens to TIPS if deflation occurs?
  • What are the maturity terms for TIPS?
  • Can I buy TIPS electronically?