DEFINITION of 'Municipal Investment Trust'

A type of unit investment trust (UIT) that invests solely in municipal securities. Municipal investment trusts allow individuals to invest in a diversified pool of municipal bonds, which passes through tax-free income. Municipal investment trusts are designed for higher-income investors seeking tax-free income.

BREAKING DOWN 'Municipal Investment Trust'

Municipal investment trusts are generally available through brokers and usually have a sales charge and a minimum investment requirement. One of the primary advantages that this type of trust offers is a monthly payout of income, as opposed to the quarterly or semiannual payment of interest common with most individual municipal issues.

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