# TIPS (Treasury Inflation-Protected Securities)

*Markets & Instruments — Finicade finance glossary*

TIPS are government bonds whose principal rises with inflation, so the coupon and redemption both keep pace with prices. You buy them to lock in a real return rather than a nominal one. The market price of that protection is the breakeven inflation rate — the gap between a nominal Treasury yield and a TIPS yield — which is the cleanest daily read on what investors expect inflation to be. In deflation, the principal floor protects your original investment.

**Also known as:** TIPS, inflation-linked bonds, index-linked gilts, linkers

**Related terms:** [Inflation](https://finicade.com/glossary/inflation), [Real vs Nominal](https://finicade.com/glossary/real-vs-nominal-interest-rates), [Treasury Bond](https://finicade.com/glossary/treasury-bond), [Breakeven Inflation](https://finicade.com/glossary/breakeven-inflation), [Real Return](https://finicade.com/glossary/real-return)

Source: https://finicade.com/glossary/tips