TIPS (Treasury Inflation-Protected Securities)
US Treasury bonds whose principal adjusts with CPI, offering guaranteed real returns.
Why it matters
TIPS pay a fixed coupon on a principal that grows with CPI. At maturity you get the higher of the adjusted principal or original face value. Best held in tax-deferred accounts because the annual principal adjustment is taxable even before you receive it.
See also
Educational only — not financial, tax, or legal advice.