What are municipal bonds?
Municipal bonds are bonds issued by states, local governments, school districts, power districts, and many other forms of government to raise money for projects dedicated to the public interest. Schools, bridges, hospitals, power plants, and many forms of public infrastructure are built from the money raised by issuing municipal bonds.
Why do people buy municipal bonds?
Tax-exempt interest. The primary reason people buy municipal bonds is that the interest received from municipal bonds is tax-exempt with regard to U.S. federal income taxes. Additionally, if the bonds are issued in your state of residence, the interest may be tax-exempt from your state's income taxes. For instance, a California resident would not pay....
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