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.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.