Treasury Inflation Protected Securities (TIPS)
A special type of Treasury note or bond that offers protection from inflation. Like other Treasuries, an inflation-indexed security pays interest every six months and pays the principal when the security matures. The difference is that the coupon payments and underlying principal are automatically increased to compensate for inflation as measured by the consumer price index (CPI).

Also referred to as "Treasury inflation-indexed securities".

Investopedia Says:
If U.S. Treasuries are the world's safest investments, then you might say that TIPS are the safest of the safe. This is because your real rate of return, which represents the growth of your purchasing power, is guaranteed. The downside is that, because of this safety, TIPS offer a low return.

Other countries have similar securities. For example, in Canada this is known as a "real return bond" (RRB).

Related Terms:
Consumer Price Index - CPI
Inflation
Inflation-Indexed Security
Inflation-Protected Security - IPS
Real Rate of Return
U.S. Treasury

• Defensive Stock
• Deferment Period
• Deferred Account
• Deferred Acquisition Costs (DAC)
• Deferred Acquisition Costs (DAC)
• Deferred Annuity
• Deferred Charge
• Deferred Income Tax
• Deferred Interest
• Deferred Interest Bond
• Deferred Long-Term Liability Charges
• Deferred Payment Option
• Deferred Profit Sharing Plan (DPSP)
• Deferred Profit Sharing Plan (DPSP)
• Deferred Revenue
• Deferred Share
• Deferred Tax Asset
• Deferred Tax Liability
• Deficiency Agreement
• Deficiency Letter
• Deficit
• Deficit Spending Unit
• Defined-Benefit Plan
• Defined-Contribution Plan
• Deflation