State and Local Government Securities

State and local government securities are debt instruments issued by state or local governments to fund projects like schools, roads, or hospitals. When investors buy these securities, they are essentially lending money to the government entity, which promises to pay back with interest over time. These securities are often called municipal bonds, and they typically offer tax advantages, such as tax-free income at the federal level, and sometimes at state or local levels. They are generally considered safe investments, especially if issued by financially strong governments, and can help fund community improvements.