Wealth Services > Municipal Bonds
What are Municipal Bonds?
Municipal bonds are classified as debt securities and are issued by either a state or municipality as a way to fund public capital expenditures. Examples include school, toll road, highway, water, sewage improvements, or infrastructure.
What are the advantages of Municipal Bonds?
Interest income on municipal bonds can be exempt from federal tax for all types of taxpayers. They may also be exempt from tax for several states and localities, which further increases the tax savings for the investor. Because of their tax-free nature, they are heavily attractive to high-income earners. Additionally, default risk is historically low for municipal bonds when compared to that of corporate bonds.
Who qualifies & why should you adopt?
Municipal bonds could be an investment for individuals with a low to moderate risk profile, who are also seeking income and striving to keep taxes at a minimum.