Municipal Bonds
Municipal bonds, or munis, are debt securities issued by states, cities, or other local government entities to finance public projects like schools, bridges, and highways. When you buy a municipal bond, you're essentially lending money to the government, which agrees to pay you interest over a set period and return your principal at maturity. One key benefit of municipal bonds is that the interest income is often exempt from federal income tax, and sometimes state and local taxes, making them an attractive option for investors seeking steady income with lower tax liability.
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Municipal bonds are debt securities issued by cities, states, or other local government entities to raise money for public projects like schools, roads, and infrastructure. When you buy a municipal bond, you’re essentially lending money to the government in exchange for periodic interest payments and the return of your principal at maturity. One key benefit is that the interest earned is often tax-exempt at the federal level, and sometimes at the state level as well. This makes municipal bonds an attractive investment option for individuals seeking stable income with favorable tax treatment.