An
inflation-index bond, issued by the U.S. government, with a value ranging from
a minimum of $50 to a maximum of $10,000 and a 30-year maturity.
Inflation-indexed bonds were issued beginning in 1998 as a hedge against
inflation. I-bond holders have a tax-deferred investment. Bondholders receive a
fixed rate of interest and then they receive an extra interest rate payment
that is based on the rate of inflation, which is indexed to the inflation rate
as calculated by the consumer price index. Also called TIPS, which is short for
Treasury inflation-protected securities.