What are TIPS and I-bonds, and how do they protect me from inflation?

Both are U.S. government bonds designed to preserve purchasing power. TIPS (Treasury Inflation-Protected Securities) adjust their principal value with the Consumer Price Index, so as inflation rises, so does the amount your interest is calculated on and what you're repaid at maturity. You can buy them individually or through TIPS funds, and they trade like other Treasuries.

I-bonds (Series I savings bonds) pay a combined rate: a fixed rate plus a variable inflation rate that resets twice a year based on CPI. You buy them directly from TreasuryDirect.gov, with an annual purchase limit set by the Treasury, and must hold at least a year (with a small interest penalty if cashed before five years). Both shine when inflation is high or uncertain. They're not growth engines; they're a way to keep your safe money from quietly losing value to rising prices.