10-year TIPS available Thursday, October 11
Tuesday, October 9th, 2007
Categorized as: Yesterday's News (old post archive)
The Treasury announced today it will re-open July’s 10-year TIPS at auction on Thursday, October 11. This provides investors an opportunity to invest in these TIPS for the nine years and nine months remaining in their term.
Like Series I Savings Bonds, TIPS are a Treasury-issued inflation-protected security. Among their many differences, TIPS typically have a higher base interest rate than I bonds.
These 10-year TIPS have a coupon interest rate of 2.625%. However, the market rate on 10-year TIPS is currently below 2.5%. If those rates hold, the final price on these TIPS will be more than their $1,000 nominal value. Daily Treasury Real Yield Curve Rates is a web page the Treasury updates daily with current calculated yields for specific TIPS terms.
To purchase TIPS at the auction, log on to your TreasuryDirect account and place an order before Monday. TIPS are available in $1,000 increments.
As a TreasuryDirect investor, you won’t actually place an auction bid. Large financial institutions do that outside of TreasuryDirect. However, you will receive the amount of TIPS you order at the best price awarded in the auction. The actual price, yield, and rate of the investment won’t be known until after the auction.