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A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
Perhaps the most significant advantage of municipal bonds or “munis” is the tax-free interest they generate. As mentioned above, municipal bonds can also be exempt from state and local taxes ...
The revenue from that project or service pays for the bond. The interest earned on municipal bonds is exempt from federal income tax (and in some cases, state and local tax as well), making them ...
In general, municipal bonds come with a low risk of default and have less volatility than riskier corporate bonds or stocks. While you can invest in individual municipal bonds, it’s easier to ...
If government debt is issued in a country's own fiat money, it is sometimes considered risk free because the debt and interest can be repaid by money creation. [25] [26] However, not all governments issue their own currency. Examples include sub-national governments, like municipal, provincial, and state governments; and countries in the eurozone.
Government bonds are conventionally considered to be relatively risk-free to a domestic holder of a government bond, because there is by definition no risk of default – the bond is a form of government obligation which is being discharged through the payment of another form of government obligation (i.e. the domestic currency). [5]
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