The Basics of Municipal Bonds. By. Nick Lioudis. Full Bio. Nick Lioudis is a writer, multimedia professional, consultant, and content manager for Bread. He has also spent 10+ years as a journalist.

Municipal bonds can provide tax-free income, ... Municipal Bonds: The Basics, Or How I Learned To Stop Worrying And Love The Tingle Of Tax- Free Income. May 09, 2016 7:43 AM ET 14 Comments.

Fact checked by Suzanne Kvilhaug Reviewed by Andy Smith If your primary investment objective is to preserve capital while generating a tax-free income stream, municipal bonds are worth considering.

Municipal bonds are debt securities issued by state and local governments to fund public projects like schools, highways, and ...

Municipal bonds are also relatively liquid, but investors need to be careful of the bid-ask spread.A bid-ask spread of just 1% can substantially reduce the returns of a muni bond yielding 2%.

You've probably heard about municipal bonds. But what are they? Here's an explanation along with how to buy them, the different types, their tax benefits and their risks.

Investors fled the category, resulting in net withdrawals of $115 billion, equaling 11.5% of all money in muni-bond funds at the start of 2022.

Source: Morningstar Direct. Data as of Aug. 31, 2024. For example, if you’re in the 32% tax bracket and own a municipal-bond fund with a nominal yield of 2.98%, you’d have to earn a 4.38% ...

Municipal bonds are issued to raise money for public initiatives. These bonds are a stable investment offering the benefit of federally tax exempt interest payments.

Callable bonds give issuers—such as corporate and municipal entities—the option to effectively refinance their debt later at a better interest rate, much like you might refinance your mortgage.