Comparison of TIPS and Series I Savings Bonds — TreasuryDirect
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Comparison of TIPS and Series I Savings Bonds
Comparison of TIPS and Series I Savings Bonds
Both Treasury-Inflation Protection Securities (TIPS) and Series I Savings Bonds adjust for inflation. Therefore, people may wonder which they should buy.
We don’t give advice, but we can help you compare the different types of securities.
The table on this page shows many aspects of these different government securities.
TIPS
I Bonds
Type of Investment
Marketable: can be bought and sold in the secondary securities market
Non-marketable: cannot be bought or sold in secondary securities market.  Registered in names of individuals and some entities, including trusts, estates, corporations, partnerships, etc. See Learn More about Entity Accounts for full information on the entity registration types.
How to buy
At auction through TreasuryDirect, or  through banks, brokers, and dealers.
Electronically, anytime online from TreasuryDirect.
Purchase Limits
Auction: Non-competitive bidding:up to $10 million Competitive bidding: up to 35% of offering amount
$10,000 per Social Security number per calendar year.
Par Amount/Face Amount
Minimum purchase is $100. Increments of $100.
Purchased in amounts $25 or more, to the penny.
Inflation Indexing
Inflation adjustments measured by CPI-U published monthly
Semiannual inflation rate (based on CPI-U changes) announced in May and November.
Discounts/ Face Amount
Price and interest determined at auction.
Purchased in amounts of $25 or more, to the penny.
Earnings Rates
Principal increases/decreases with inflation/deflation. Interest calculations are based on adjusted principal. Interest rate never changes.
Earnings rate is a combination of the fixed rate and inflation rate. Inflation rate and earnings rate change every 6 months.
Interest
Semiannual interest payments are  based on the interest rate set at auction. Inflation-adjusted principal is used to calculate the interest amount
Interest accrues over the life of the bond and is paid upon redemption
Tax Issues
Semiannual interest payments and inflation adjustments that increase the principal are subject to federal tax in the year that they occur, but are exempt from state and local income taxes.
Tax reporting of interest can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first.   Interest is subject to federal income tax, but exempt from state and local income taxes.   Interest can also be claimed annually.
Life Span
5, 10, and 30 years.
30 years.
Disposal before maturity
Can be sold prior to maturity in the secondary market.
Redeemable after 12 months with three months interest penalty. No penalty after 5 years.
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