DEFINITION of 'Certificateless Municipals'
A type of municipal bond that does not issue a certificate to each owner and is therefore also a type of book-entry security. The absence of a paper certificate simplifies recordkeeping and trading for brokers, municipalities and investors.
BREAKING DOWN 'Certificateless Municipals'
Certificateless municipal bonds are attractive to certain investors because, like all municipal bonds, the proceeds are usually tax-free at the federal level and also tax-free at the state level if you live in the same state in which the bonds were issued. Municipal bonds offer a low rate of return compared to other types of bonds, but because of their tax-exempt status, they are often a good choice for high-income individuals and married couples.