Treasury Inflation Protection Bonds (tips)
Bonds issued by the United States Treasury that pay a semiannual interest rate tied to the Treasury auction plus an additional interest rate tied to the rate of inflation during this semiannual period. The rate of inflation is measured by the increases or decreases in the Consumer Price Index for Urban Consumers (CPI-U). The TIPs are issued in minimum denominations of $1000 with varying maturities. The additional rate of inflation interest adjustment is paid on the principal of the bond at maturity. Taxes are paid annually on both the interest earned on the TIP as well as the additional rate of inflation interest adjustment.
Popular Insurance Terms
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Payment of premiums and benefits as they come due. In pension plans, known as the "pay as you go basis." The plan depends on new employees coming into the work force so that their ...
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