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 how to protect your 401(k) from the adverse effects of inflation by adding inflation-protected securities to your portfolio. Read Answer >>
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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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    Learn how to determine when to consider buying an inflation-protected security to enhance the returns of your investment ... Read Answer >>
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  5. Can real interest rates be negative?

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