TIPS and I bonds: protecting savings from inflation
With CPI at 3.7%, inflation linked securities draw attention. Two options in the US are TIPS and Series I savings bonds. How each works TIPS Treasury Inflation Protected…
With CPI at 3.7%, inflation-linked securities draw attention. Two options in the US are TIPS and Series I savings bonds.
How each works
TIPS (Treasury Inflation-Protected Securities): the principal adjusts with CPI, and the fixed coupon is paid on the adjusted principal. At maturity you get the higher of the adjusted or original principal.
I bonds: pay a rate made of a fixed rate plus an inflation component that resets every six months. They are bought directly from TreasuryDirect.
Taxes
Both are exempt from state and local income tax. TIPS adjustments are taxed federally each year even though you do not receive them until maturity, which is why many hold TIPS in tax-advantaged accounts. I bond interest can be deferred until redemption.
Limits
I bonds have an annual purchase limit per person, and you cannot redeem them in the first 12 months. Redeeming within five years costs the last three months of interest. TIPS trade on the market and can lose value if real yields rise.
When they make sense
For safe money you need over several years that should keep pace with inflation. Check current rates on treasurydirect.gov before deciding.
Educational content, not investment advice. Figures as reported on November 9, 2026; check primary sources before acting.
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