What is a Treasury Inflation-Protected Security?

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What is a Treasury Inflation-Protected Security?

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A Treasury inflation-protected security (TIP) is a special type of note or bond that the U.S. Department of the Treasury uses to finance the public debt. At the same time, the Treasury inflation-protected security offers investors protection from the up and down swings that come with inflation. These securities are also called Treasury inflation-indexed securities. These securities typically are purchased in multiples of $100 US Dollars (USD) through Treasury Department public auctions. Bids may also be placed through a government-approved bank, broker or dealer. Auction dates for treasury bonds and treasury notes are announced in major newspapers and online press releases at the department’s Web site. Investors may also subscribe to e-mail notifications. Inflation is a rise in the cost of goods and services. As inflation increases, the base amount an investor puts in a Treasury inflation-protected security, known as the principal, simultaneously increases at the same rate as the Consu

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