Thanks everyone for the explanation and links. Even though it's 0.12% after fees it still seems unintuitive to invest in when I'm getting 1% from my savings account. I understand that TIPS protect against inflation, but surely my savings account will also raise it's interest rate if inflation increases.
I'm not sure you're understanding. Inflation is happening right now.
It's about 2%. So you're losing money in real purchasing power earning 1%. With TIPs as long as inflation is > the interest rate your bank is paying + costs to acquire, you'll come out ahead with TIPs.
If inflation rises, there will be a lag with your bank to rise rates (they won't until they have to due to market pressures, otherwise they bank the difference as profits). So say inflation rises to 5%, your bank might eventually raise your interest to 2-3%. While TIPs will have risen from 2-3% it's at now to that new 5% automatically, immediately.
I'm not saying TIPs is what you should invest in, I don't know your situation, but I am trying to explain why it's better than you seem to be giving it credit for.