Define: Inflation-Indexed Security

UK Accounting Glossary

Definition: Inflation-Indexed Security



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Full Definition of Inflation-Indexed Security


An inflation-indexed security is a stock or bond whose return is promised to be higher than the rate of inflation. A company or government body will issue an inflation-indexed security (generally a bond) to attract investors who want their earnings to survive the corrosive effects of inflation. The US Treasury issues several types of inflation-indexed security, such as the Series I savings bond, whose interest rate is adjusted every six months against the prevailing rate of inflation. Other types of inflation-indexed security adjust the dollar value of the security’s principal. At maturity, such a bond pays the higher of the inflation-indexed security principal or the original principal. Inflation-Indexed security is popular among investors seeking to preserve their investment’s value.


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Definition Sources


Definitions for Inflation-Indexed Security are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.