Why Municipal Bonds Are An Attractive Investment?

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Answer :

Municipal bonds are bonds issued by local governments or theirassociated agencies to raise money for particular projects. Mostoften, municipal bonds are issued to build roads, schools and tocomplete projects such as sewer systems. These bonds offer the bondholder payments of interest over a certain period of time as wellas the return of their initial investment.One of the factors that make municipal bonds an attractiveinvestment is the tax exempt status they carry. Interest paymentsto the bond holder will not be taxed on the federal level and moststate and local municipalities will waive the taxes on a localbond. While the interest rates paid on municipal bonds is alwayslower than other bonds on the market, the tax exempt statusoutweighs this negative aspect.Another factor to consider is r

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Last Answer : No, interest earnings from municipal bonds are not tax exempt at the federal or state level.

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