What is US Treasury TIPS (Treasury Inflation-Protected Securities)?

US Treasury TIPS (Treasury Inflation-Protected Securities) are marketable debt securities issued by The US Department of the Treasury. They are set up to protect you against inflation.

US Treasury TIPS were introduced in 1997. They are only issued electronically to your online accounts.

Each US Treasury TIPS has the following features:

• It has a dated date (when it started to earn interest) and a maturity date, defining a long maturity term of 5, 10, 20, or 30 years.
• Unlike other US Treasury securities, the principal, also called face value or par value, of a TIPS is adjusted daily based on the inflation rate, CPI (Consumer Price Index) change rate.
• When it matures, the U.S. Treasury pays the original or adjusted principal, whichever is greater.
• It has a fixed interest rate and a 6-month payment schedule. But since the face value is changing daily, the interest amount is different in each interest payment period.
• It has a CUSIP (Committee on Uniform Securities Identification Procedures) number to identify the series of TIPS with the same security features.

Here is an example US Treasury TIPS:

CUSIP: 912810FS2
Series: D-2028
Dated Date: 2006-01-15
Maturity Date: 2026-01-15
Interest Rate: 2.00%

⇒ Face Value Adjustment on US Treasury TIPS

⇐ US Treasury TIPS

⇑ US Treasury TIPS

⇑⇑ US Treasury Securities