Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater.

TIPS pay interest twice a year, at a fixed rate. The rate is applied to the adjusted principal; so, like the principal, interest payments rise with inflation and fall with deflation.

You got it right

When I go and check recent auctions to review their interest rates, they are yeilding about .625% for a 10 year security term. Is that right? so hypothetically you put in 100$ you'll get 6.23$'s back when its compounded semiannually (with no adjustment before inflation)? or am I just looking and understanding the wrong thing?