Investors interested in purchasing TIPS Bonds can purchase either 5-, 10-, or 30-year TIPS with a minimum purchase of $100 and incremental amounts of $100 directly through the U.S. Treasury at TreasuryDirect.  The US Treasury offers the 10-Year TIPS auctions six times a year now as of May 2010 instead of the previous four times a year.  These auctions will dictate the yield based on supply and demand. 

Lets say, you purchased TIPS with a maturity date of either 5-, 10-, or 30- years and originally you were planning to buy-and-hold these bonds, but one day you decided that you want to change your investment style.  Are you stuck holding on to these bonds until they mature?  Luckily, you do not have to hold onto TIPS until they mature. There is an active secondary market where you can buy and sell TIPS from other investors.  This has allowed the TIPS market to become a more liquate investment until many other, “Safe,” investments, such as CDs.

Another great way to purchase TIPS is through a mutual fund.  There are multiple mutual fund companies that specialize in purchasing US Treasury TIPS, which include Vanguard Inflation-Protection Securities, PIMPCO Real Return, and Fidelity Inflation Protected Bond Fund.  All these fund families offer different initial and subsequent investment amounts, so please make sure you know all details before investing.

If you’re not interested in owning a mutual fund and you don’t want to own actual TIPS Bonds, then you may be interested in an ETF, also known as an Exchange Traded Fund.  The iShares Barclays TIPS Bond Fund invests only in Treasury TIPS with a range of TIPS maturity dates.