TIPS explained, with current auction data
Treasury Inflation-Protected Securities adjust their principal with the CPI and pay a fixed rate on that adjusted principal.
Here is how TreasuryDirect defines them, a worked example from the Oct 22, 2026 auction, and every TIPS auction of the past year.
U.S. Treasury securities: not FDIC-insured · not bank deposits · market value can change before maturity
TIPS at a glance
| Feature | TreasuryDirect |
|---|---|
| Terms | 5, 10 or 30 years |
| Interest paid | Every six months until maturity |
| Interest rate | Fixed at auction, never less than 0.125%, applied to the adjusted principal |
| Principal | Adjusted for inflation (up) and deflation (down) with the CPI |
| At maturity | Greater of adjusted principal or original principal |
| Minimum amount | $100, in $100 increments |
| Taxes | Federal tax each year on interest; principal changes may affect federal tax; no state or local tax |
| Eligible for STRIPS | Yes |
Source: TreasuryDirect, TIPS, checked Oct 24, 2026.
Worked example: the latest auction
The 5-Year TIPS auctioned Oct 22, 2026 (CUSIP 91282CRR4) cleared at a high real yield of 2.367% with a 2.250% interest rate, issuing Oct 30, 2026 and maturing Oct 15, 2031 (results PDF).
- Index ratio on issue date: 1.00154. That is the reference CPI on the issue date (334.91148) divided by the reference CPI on the dated date (334.39761).
- Adjusted principal: $1,000 face × 1.00154 = $1,001.54 on the issue date.
- Settlement: the adjusted price of 99.607747 per $100 is $996.08 per $1,000 face, plus $0.93 of adjusted accrued interest (TreasuryDirect auction data).
- A six-month payment at that principal: $1,001.54 × 2.250% ÷ 2 = $11.27. Actual payments use the principal on each payment date, which moves with the CPI (daily index ratios).
The real yield above the interest rate is why the price is below $100: bidders cleared at a real yield higher than the coupon. When the clearing real yield is below the coupon, the price is above $100.
TIPS vs I bonds
Both are tied to CPI inflation, but they work differently: TIPS are marketable, auctioned and pay interest every six months, while I bonds are non-marketable savings bonds whose interest is added to the bond. TreasuryDirect compares them on Comparing TIPS and Series I Savings Bonds; see also the I bond rate history.
TIPS auctions, past year
| Auction | Term | High real yield | Interest rate | Bid-to-cover |
|---|---|---|---|---|
| Oct 22, 2026 | 5-Year | 2.367% | 2.250% | 2.41 |
| Sep 17, 2026 | 9-Year 10-Month (reopening) | 2.653% | 2.375% | 2.24 |
| Aug 20, 2026 | 29-Year 6-Month (reopening) | 2.973% | 2.375% | 2.82 |
| Jul 23, 2026 | 10-Year | 2.438% | 2.375% | 2.30 |
| Jun 18, 2026 | 4-Year 10-Month (reopening) | 1.955% | 1.250% | 2.61 |
| May 21, 2026 | 9-Year 8-Month (reopening) | 2.169% | 1.875% | 2.52 |
| Apr 23, 2026 | 5-Year | 1.367% | 1.250% | 2.57 |
| Mar 19, 2026 | 9-Year 10-Month (reopening) | 1.896% | 1.875% | 2.47 |
| Feb 19, 2026 | 30-Year | 2.473% | 2.375% | 2.75 |
| Jan 22, 2026 | 10-Year | 1.940% | 1.875% | 2.38 |
| Dec 18, 2025 | 4-Year 10-Month (reopening) | 1.433% | 1.125% | 2.62 |
| Nov 20, 2025 | 9-Year 8-Month (reopening) | 1.843% | 1.875% | 2.41 |
Source: TreasuryDirect auction data (TA_WS securities feed), checked Oct 24, 2026; each row links the official results PDF.
Negative real yields: TreasuryDirect explains how bids below zero are handled on Information on Negative Rates and TIPS.
Related: 5-year TIPS, 10-year TIPS and 30-year TIPS auction history · Treasury FRNs explained · I bond vs T-bill vs CD · Treasury yield curve.
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Frequently asked questions
How does TIPS principal change with inflation?
TreasuryDirect: the principal goes up with inflation and down with deflation, using the CPI version it links from the Bureau of Labor Statistics. The index ratio for each TIPS shows the adjustment.
What happens at maturity if there was deflation?
TreasuryDirect: you get the inflation-adjusted principal or the original principal, whichever is greater, so never less than the original principal.
How is TIPS interest paid?
Every six months, at a rate fixed at auction applied to the adjusted principal, so the dollar amount of each payment can change.
What is the lowest TIPS interest rate?
TreasuryDirect: the interest rate is never less than 0.125%. Auction rules allow negative real-yield bids, which show up as a price above par.
How are TIPS taxed?
TreasuryDirect: federal tax is due each year on interest, and increases or decreases in principal during the year may affect federal taxes. There is no state or local income tax.
What terms does Treasury issue?
5, 10 and 30 years. TreasuryDirect lists the 5-year in April and October (reopened June and December), the 10-year in January and July (reopened March, May, September and November) and the 30-year in February (reopened August).
Is this investment advice?
No. This page explains how Treasury defines the security and shows published auction data.