No. of Recommendations: 0
The interest rate risk with TIPS is:

- if you sell before maturity, you have no idea how much you'll get, based on current demand for TIPS.
- the inflation adjustment is added to principal, but the coupon payments are not and you don't know what rate you'll be able to reinvest them.
- If there is deflation you will lose nominal principal (perhaps even more principal than the coupon payment is)

I didn't know that you are likely to avoid all taxes when you cash them in, the I-bonds are clearly a better choice in your situation.

And of course there's no reason to cash in your old I-bonds unless you need the cash.
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