Municipal Bonds
These are bonds issued by your state or local government,
and the money you lend goes directly to your community. The
greatest advantage of investing in “munis” is that
typically they’re free from both state and local taxes
and from federal taxation. However, capital gains earned from
muni bond sales are subject to all levels of taxation.
Municipal bonds have maturities that range from 1 to 40 years
and are also referred to as:
- Tax-exempt bonds and/or
- Tax-free bonds
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