Treasury Inflation Indexed Securities also known as TIPS, are a unique asset class, dollar denominated, inflation protected, and backed by the faith and credit of the United States. TIPS provide suitable research for investors interested in low cost, low risk investments.TIPS are marketable securities whose principal is adjusted by changes in the Consumer Price Index. With inflation or a rise in the index, the principal increases. With a deflation or a drop in the index, the principal decreases.The relationship between TIPS and the Consumer Price Index affects both the sum you are paid when your TIPS matures and the amount of interest that a TIPS pays you every six months. TIPS pay interest at a fixed rate. Because the rate is applied to the adjusted principal, however, interest payments can vary in amount from one period to the next. If inflation occurs, the interest payment increases. In the event of deflation, the interest payment decreases.At the maturity of a TIP, you receive the adjusted principal or the original principal; whichever is greater. This provision protects you against deflation.Tips will add diversification to your portfolio; it is an asset suitable for investors focused on the future purchasing power of their savings. With TIPS the volatility is low and has a potential for attractive returns. The correlation with inflation has a long run compared to assets such as real estate, commodities, or other real assets.TIPS have a deflation floor so you won’t get back less than the nominal principal value at maturity.The TIPS market includes the worlds largest indexed securities market, over $450 billion of TIPS outstanding, and a daily turnover approaching nearly $10 billion.As part of the Treasury’s Funding Strategy TIPS includes nearly 10% of the marketable debt portfolio, quarterly 10-year TIPS notes, and semi-annual 5- and 20-year TIPS issuance. Investors can purchase TIPS in denominations as low as $100.You can purchase TIPS directly from a bank or broker, and from the Treasury department at treasurydirect.gov. Read more from their link below.