The last type of US government bonds we want to have a look at here, are TIPS. The real yield of a conventional fixed coupon bond investment will only be known exposed as realized inflation will only be known in the future. For investors, however, that want to lock in a certain real yield at the time the investment is made, the US Government issues TIPS, which stands for Treasury Inflation Protected Securities. TIPS are issued regularly with maturities of five, 10, and 30 years, and provide investors with protection against future inflation. And let's have a look at how this protection actually works. When TIPS are issued, a fixed coupon is set, and this coupon is called the real rate, as it is the income a TIPS investor will receive above inflation. The actual inflation protection is then achieved as follows: The face value, which will be repaid at the bonds maturity, but which also provides the basis for the calculation of the semi-annual coupon payments, is regularly adjusted to reflect changes in the US Consumer Price Index, CPI, so that the face value increases with inflation, and decreases with deflation. And while the coupon is fixed over the life of TIPS, the actual payments will differ as the face value increases or decreases over time. At maturity of the bond, investors either receive the inflation adjusted face value, or the original face value, whichever is greater. So TIPS do not only offer protection against inflation, but in case of net decrease in price levels over the life of the bond, the face value will not be adjusted to reflect the deflation.