TIPS Calculator (Treasury Inflation-Protected)
This TIPS calculator produces an inflation-adjusted principal amount from two CPI index values and estimates the semiannual coupon payment based on the inflation-adjusted principal. It also converts a real yield to an approximate nominal yield using an expected inflation estimate.
Use the CPI index values you have for the security's reference date and for the valuation date. Enter percentage rates as annual percentages. Results are estimates for informational purposes and are not trade instructions.
Compute inflation factor from two CPI index values, apply indexation to the TIPS face value, and compute semiannual coupon payment on the inflation-adjusted principal. Outputs do not automatically apply the statutory deflation floor; see notes.
Inputs
Results
Inflation-adjusted principal
$1,020.00
Semiannual coupon payment
$5.10
| Output | Value | Unit |
|---|---|---|
| Inflation-adjusted principal | $1,020.00 | USD |
| Semiannual coupon payment | $5.10 | USD |
Visualization
Methodology
Indexation method uses the ratio of the current CPI index to the acquisition CPI index to compute an inflation factor. That factor scales the original face value to produce an inflation-adjusted principal.
Coupon payments on TIPS are paid semiannually on the inflation-adjusted principal. This calculator applies the stated coupon rate to the adjusted principal and divides by two to estimate each semiannual payment.
Yield conversion uses the multiplicative relation between real return and inflation. The nominal yield approximation equals (1 + real) * (1 + expected inflation) - 1.
Worked examples
Example 1. Face value 1000, CPI at acquisition 300, CPI now 306, coupon 1.00%: inflation factor 1.02, adjusted principal 1020.00, semiannual coupon 5.10.
Example 2. Real yield 0.50% and expected inflation 2.00%: approximate nominal yield = (1.005) * (1.02) - 1 = 0.0251 or about 2.51%.
Expert Q&A
Does the calculator apply the statutory deflation floor for redemption principal?
No. This calculator displays the inflation-adjusted principal computed from CPI inputs. By statute, the redemption principal will not be less than the original face value when TIPS mature. Please interpret adjusted principal values accordingly.
Do I need to enter CPI indexes or CPI percentage changes?
Enter CPI index values for the reference date and the valuation date. The calculator computes the factor as a ratio of indexes. If you only have percent changes, you can reconstruct indexes using a base value.
How accurate are the yield conversions?
The nominal yield conversion is an approximation that assumes the provided expected inflation rate fairly represents future inflation. It does not replace a full yield-to-maturity calculation or market pricing analysis. Use it for rough comparisons only.
Are results suitable for tax or accounting filings?
No. Results are for informational estimates. For tax reporting, accounting, or compliance actions use official statements, consult a licensed professional, and follow the relevant regulatory guidance.
What rounding and precision should I expect?
Displayed numbers are rounded for clarity. Underlying calculations use standard numeric precision. For mission-critical uses, run independent checks and present uncertainty ranges where appropriate.
Sources & citations
- U.S. Department of the Treasury marketable securities overview — https://www.treasurydirect.gov/marketable-securities/tips/
- Bureau of Labor Statistics CPI homepage — https://www.bls.gov/cpi/
- NIST guidelines on measurement uncertainty and software testing — https://www.nist.gov
- ISO general standards organization — https://www.iso.org
- IEEE standards and best practices for software and numerical methods — https://www.ieee.org
- OSHA general workplace safety and quality controls — https://www.osha.gov