Municipal Bond

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What is a 'Municipal Bond'

A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures. Municipal bonds are exempt from federal taxes and from most state and local taxes, especially if you live in the state in which the bond is issued.

Also known as a "muni."

BREAKING DOWN 'Municipal Bond'

Municipal bonds may be used to fund expenditures such as the construction of highways, bridges or schools. "Munis" are bought for their favorable tax implications, and are popular with people in high income tax brackets.

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RELATED FAQS
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    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  2. Who or what is backing municipal bonds?

    Learn about the basics of municipal bonds, including the various revenue sources that are utilized to back or secure municipal ... Read Answer >>
  3. What is a triple tax-free municipal bond?

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  4. How stable are municipal bonds?

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  5. Your neighbor asks you about Municipal Bonds, you would be correct in telling him ...

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  6. Where is the best place to invest $400,000 without paying taxes?

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