December 13, 2006
What’s a Municipal Bond?
A debt security issued by a state, municipality, or county, in order 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 the bond is issued.
Such expenditures might include 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.
More words from Investopedia.
