Municipal Securities
Municipal securities, or munis, are debt instruments issued by states, cities, or local governments to raise funds for public projects like schools, highways, or parks. When you buy a municipal bond, you are essentially lending money to the government in exchange for regular interest payments and the return of your principal amount at maturity. One of the key benefits of municipal securities is that the interest is often exempt from federal income tax, and sometimes state and local taxes, making them an attractive investment option for individuals looking for tax-efficient income.
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Municipal securities, often called munis, are debt instruments issued by local governments or their agencies to finance public projects, such as schools, roads, and utilities. When you buy a municipal bond, you're essentially lending money to the government, which promises to pay you back with interest over a set period. One key benefit of munis is that the interest earned is often exempt from federal income tax, and sometimes state taxes, making them attractive to investors, especially those in higher tax brackets. They are considered relatively safe investments due to the backing of government entities.