Tax-free municipal bonds.


Benefits of tax-free municipal bonds.

Tax-free municipal bonds offer a wide range of benefits, including:

  • Attractive current income free from federal and, in some cases, state and local taxes
  • A predictable stream of tax-free income
  • A wide range of choices to make your investment objectives regarding investment quality, maturity, choice of the issuer, type of bond, and geographical location
  • Liquidity at the current market price in the event you must sell before maturity

Municipal securities consist of both short-term issues (often called notes) and long-term issues (bonds). Short-term notes typically mature in one year or less and are used by an issuer to raise money in anticipation of future revenues, while bonds are usually sold to finance capital projects over the longer term.

Investing in municipal bonds involves risk, including the risk of default by the issuer on the payment of interest and principal when due. Prices are subject to market fluctuation and if sold prior to maturity, the amount received may be more or less than the amount invested. Interest on certain municipal bonds may be subject to federal alternative minimum tax and capital gains, if any, are subject to tax.

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