How to Buy TIPS With Vanguard: Step-by-Step Guide
Investors can buy Treasury Inflation-Protected Securities through a Vanguard Brokerage Account.
TIPS offer inflation protection alongside exposure to U.S. government debt, with returns affected by inflation and interest rates.
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Individual TIPS vs. TIPS Funds
Individual TIPS are Treasury securities with a specific maturity and inflation-adjusted principal, while Vanguard TIPS funds hold diversified portfolios of TIPS without a fixed maturity.
| Feature | Individual TIPS | Vanguard TIPS Fund / ETF |
|---|---|---|
| Main benefit | Lock in a specific real yield | Diversification + simplicity |
| Maturity | Specific maturity date | Fund continually holds TIPS |
| Real yield locked in? | Yes, if held to maturity | No |
| Principal at maturity | Inflation-adjusted Treasury principal | N/A — NAV fluctuates |
| Diversification | You choose the bonds | High |
| Liquidity | Moderate; easier through a broker | High |
| Fees | No fund expense ratio | Low annual expense ratio |
| Minimum | $100 at TreasuryDirect | ETFs: 1 share; mutual funds vary |
| Reinvestment | You manage it | Fund manages it |
| Interest-rate risk | Mainly matters if you sell early | Always reflected in NAV |
| Taxable account | Federal tax on interest + inflation adjustment | Federal tax on fund distributions |
| Best for | Known maturity + certainty | Convenience + diversification |
Individual TIPS are best suited to investors who value certainty and can manage their own bond ladder.
Vanguard TIPS funds are better for investors who prioritize simplicity, diversification, and liquidity.
How to Buy TIPS on Vanguard
Step 1: Log in to Vanguard Brokerage
Navigate to the “Buy & sell” section or use the search bar.
To find individual TIPS, search by CUSIP or simply by TIPS or Treasury under the fixed-income or bonds section.
Step 2: Choose Auction or Secondary
On Vanguard’s bond-buying page, you can select a Treasury Auction if an upcoming TIPS issue is scheduled.
Alternatively, you can also use the Secondary Market tab to search existing TIPS by maturity or CUSIP.
Step 3: Place Order
For auctions, enter the amount and submit before the auction deadline.
For secondary, choose a market or limit order. Vanguard charges no commission on online Treasury trades.
The settlement is the next business day (T+1), so funds and securities are exchanged then.
Step 4: Confirmation
After the auction settlement date or trade settlement, the TIPS appear in your brokerage account.
You can monitor accruals via Vanguard statements.
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Buying TIPS at Auction vs. on the Secondary Market
| Feature | Auction | Secondary Market |
|---|---|---|
| Timing | Scheduled Treasury auction | Buy anytime securities are available |
| Price / Yield | Determined at auction | Quoted before purchase |
| Maturity Choice | Limited to newly issued maturities | Wide choice of existing maturities |
| Order Type | Noncompetitive bid for most retail investors | Market or limit order |
| Settlement | Generally T+1 | Generally T+1 |
| Costs | No TreasuryDirect transaction fee | Bid/ask spread; broker fees may vary |
| Main Advantage | Access to newly issued TIPS | Flexibility and immediate choice |
| Main Disadvantage | Final yield isn’t known beforehand | Market price may include a premium/discount |
| Best For | Investors willing to wait for an auction | Investors seeking a specific TIPS now |
Auctions provide access to newly issued TIPS, while the secondary market offers greater flexibility to choose a specific maturity at the prevailing market price.
How Much Do Vanguard TIPS Cost?
A recent 10-year TIPS auction yielded ≈2.58% (real).
With a 2.625% coupon, that might equate to ~$99.50 per $100 par at auction.
| Investment | Type | TIPS Exposure | Yield* | Expense | Minimum |
|---|---|---|---|---|---|
| 10-Year TIPS | Individual Treasury | ~10 years | ~2.58% real | — | $100 |
| VAIPX | Mutual fund | Broad / ~6.5-yr duration | ~2.3% SEC | 0.10% | — |
| VIPSX | Mutual fund | Broad / ~6.5-yr duration | ~2.3% SEC | 0.20% | $3,000 |
| VTAPX | Mutual fund | Short-term / <5 years | ~2.3% SEC | 0.06% | — |
| VTIP | ETF | Short-term / <5 years | ~2.3% SEC | 0.03% | None |
| VTP | ETF | Broad TIPS | ~3.0% | 0.05% | None |
For most investors, the key trade-off is between lower costs and shorter duration versus broader TIPS exposure.
TIPS (Treasury Inflation-Protected Securities) FAQ
Secondary-market trades settle in 1 business day (T+1), while auction purchases typically settle 1-2 days after the auction.
TIPS interest and inflation adjustments are generally taxed federally as ordinary income but are exempt from state and local income taxes. Inflation adjustments are taxable each year, even though you don’t receive the cash until sale or maturity.
Yes, TIPS can be separated into zero-coupon STRIPS for their principal and interest payments.
I Bonds are tax-deferred and non-tradeable, while TIPS have no purchase limit and can be traded. I Bonds may suit smaller savings, while TIPS are better suited to larger allocations.
Yes, as of September 2026, I Bonds have a composite rate of about 7.12%, higher than many current TIPS rates.
No, TIPS have no annual purchase limit.
Yes, taxes on TIPS interest and inflation adjustments are generally deferred until withdrawal in an IRA or 401(k).
Generally, an IRA can be more tax-efficient because it avoids annual taxes on TIPS inflation adjustments.
Yes, TIPS can generally be transferred between TreasuryDirect and Vanguard using the required forms, although transfers can take several weeks.
Yes, you can generally transfer TIPS from Vanguard to TreasuryDirect using the required transfer process.
Treasury auction TIPS typically settle 1-2 business days after the auction.
Secondary-market TIPS trades generally settle 1 business day after the trade (T+1).
Vanguard shows the securities as settled after the trade has completed.
Vanguard lists the settlement date on your trade confirmation and account postings.
Fund your account at least one business day before settlement to ensure the cash is available.
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