5-year TIPS auction Tuesday, April 25

Thursday, April 20th, 2006
Categorized as: Yesterday's News (old post archive)

The Treasury announced today it will offer $11 billion in 5-year TIPS at auction on Tuesday, April 25. 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. Experienced I bond investors may be interested in Tuesday’s auction.

To purchase TIPS at the auction, log on to your TreasuryDirect account and place an order before Tuesday. 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 highest interest rate determined in the auction. The actual price, yield, and rate of the investment won’t be known until after the auction.

However, as of yesterday, the Treasury calculated the 5-year yield of outstanding TIPS at 2.16%. This is down from its level a week earlier. Daily Treasury Real Yield Curve Rates is a web page the Treasury updates daily with current calculated yields for specific TIPS terms.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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