« Is an Equity Indexed Annuity a Good Investment? | Home | Advantages of Diversifying Your Investment Portfolio »
Tax free municipal bonds
By Capitalist | November 2, 2009
Municipal bonds are bonds issued by counties, cities or states so as to raise funds to be used in the development of community projects like highway, new school or hospitals. They are popular because the interests paid to their owners are exempted from taxes. Currently it is estimated that 70% of all municipal bonds are owned by individual.
Most of them are insured by municipal bond insurers, thus their returns are guaranteed.
Their marketability is high since they are being sold throughout the year. Their market prices usually depend on the prevailing market conditions.
Over the years, research has shown that 99% of all municipal bonds issued are reliable in their payment of interest and principal, they also offer the flexibility of planning for both short and long term incomes, since you choose a maturity date of between one and 30 years. Basically, they are a sound investment to people in the middle and higher income brackets.
Topics: Bonds, Investments | No Comments »