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Treasury Inflation-Protected Securities (TIPS) FAQ's

This article tries to answer the most commonly asked questions about U.S. Treasury Inflation-Protected Securities (TIPS) :

What are TIPS?
  • What happens to TIPS if deflation occurs?
  • What are the maturity terms for TIPS?
  • How do I know when TIPS will be auctioned?
  • What are reopenings, premiums, and accrued interest?
  • How can I calculate the inflation adjustment to my principal?
  • Can I be taxed for TIPS earnings before I receive payment for those earnings?
  • How can I place a competitive bid for a TIPS?
  • Do you issue TIPS in paper form?
  • How do I transfer a TIPS from Legacy Treasury Direct to TreasuryDirect?
    • Consumer Price Index. With inflation, the principal increases. With deflation, it decreases.

    Tentative Auction Calendar, which shows auction dates months in advance, or "Upcoming Treasury Marketable Securities Auctions," which shows auctions that we have officially scheduled. (Auctions are officially scheduled only days before they are conducted.)

    Also, you can sign up for e-mail notification of auctions.

    TIPS Inflation Index Ratios to allow you to easily calculate the change to principal resulting from changes in the Consumer Price Index. To determine your inflation-adjusted semi-annual interest payment, simply follow this three step process:

    1. Locate your TIPS on the TIPS Inflation Index Ratios page. Follow the link and locate the Index Ratio that corresponds to the interest payment date for your security.
    2. Multiply your original principal amount by the Index Ratio. This is your inflation-adjusted principal.
    3. Multiply your inflation-adjusted principal by half the stated coupon rate on your security (i.e., 2%). The resulting number is your semi-annual interest payment.
    Open an account in TreasuryDirect. (If you already have an account, you may skip this step.) NOTE: At this time, only individuals can hold accounts in TreasuryDirect.
  • Complete the Legacy Treasury Direct form "Security Transfer Request" (PD F 5179). In the form's section 3, check the box for "Transfer to an Established On-line TreasuryDirect Account Number." ( Download or order the form.) Your signature on this form must be certified. Your bank may provide this service.
  • Mail the form to the Bureau of the Public Debt, at the address shown on the form.

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