KXLY April 13, 2021 6:05 AM Brian O'Connell - Forbes Advisor Posted: Updated: April 15, 2021 4:37 AM Treasury Inflation Protected Securities, or TIPS, are bonds issued by the U.S. government that offer protection against inflation plus modest interest payments. “Many investors save and invest so they can spend in the future,” says Wes Crill, head of investment strategists at Dimensional Fund Advisors in Austin, Texas. “For investors prioritizing preservation of purchasing power, TIPS can contribute to that goal by mitigating the impact of unexpectedly high inflation.” How Do TIPS Work? As fixed income securities, TIPS work a lot like the bonds you’re already familiar with. You purchase debt issued by the U.S. government, and receive regular interest payments on the face value, or the par value, of the securities. When the TIPS’s term is up, you are repaid the original amount loaned to the government.