Inflation-Protected Security - IPS

DEFINITION of 'Inflation-Protected Security - IPS'

A type of fixed-income investment that guarantees a real rate of return. The real rate of return is the nominal return, less the inflation rate, thus protecting investors from inflation.

BREAKING DOWN 'Inflation-Protected Security - IPS'

The purchase of IPS products is most often done with government products, such as Treasury inflation-protected securities (TIPS), but private sector companies also offer these products.

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RELATED FAQS
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    Learn what nominal interest rates and real interest rates are, how real interest rate takes into account the inflation rate, ... Read Answer >>
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    Inflation, an economic concept, is an economy-wide sustained trend of increasing prices from one year to the next. The rate ... Read Answer >>
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    Learn about the ways inflation can harm fixed-income investments. Find out how to monitor the impact of inflation using common ... Read Answer >>
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    Read about the subtle difference between a financial instrument's nominal interest rate of return and the general nominal ... Read Answer >>
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    Learn about the three biggest risks of bonds and other fixed-income investments. Find out more about related issues and learn ... Read Answer >>
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