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A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
A general obligation bond is a common type of municipal bond in the United States that is secured by a state or local government's pledge to use legally-available resources, including tax revenues, to repay bondholders. [1]
According to this rule, if the discount at which a bond is purchased in the secondary market is less than 0.25% of the face value for each full year from the purchase date to the bond’s maturity ...
In other words, the muni pays the taxable equivalent of a bond offering 4.28 percent – the threshold where you would be indifferent to the muni over the regular bond.
The post Municipal Bonds vs. Corporate Bonds appeared first on SmartReads by SmartAsset. Bonds often play an important role in a well-rounded investment portfolio. While both municipal and ...
Revenue Bond of the City of New York, issued 3. June 1858, signed by mayor Daniel F. Tiemann. A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds, rather than from a tax.
Bonds have a fixed lifetime, usually a number of years; with long-term bonds, lasting over 30 years, being less common. At the end of the bond's life the money should be repaid in full. Interest may be added to the end payment, or can be paid in regular installments (known as coupons) during the life of the bond.
There are several ways to invest in municipal bonds, but the most common include purchasing individual municipal bonds, buying muni mutual funds or exchange-traded funds (ETFs) and creating ...