Series 79: Municipal Bonds

Municipal Bonds

Municipal bonds are issued by state and local governments. Interest paid on municipal bonds is exempt from federal income tax and is usually free from state and local income tax in the jurisdiction that issues the bond. Municipal bonds are generally considered low-risk, but they are not risk-free: unlike the federal government, state and local governments cannot simply print money. Because they offer tax-free returns, municipal bonds typically pay lower interest rates than non-municipal bonds with si