The rest of the curve often reflects the Fed funds target rate, too, so longer-term rates also tend to rise when the Fed raises short-term rates. Yields also respond to other factors. They’ll often rise during inflationary periods when bond investors demand higher compensation for the ...
These municipal bonds are issued by governmental entities, but are not backed by revenues from the project they are used to sponsor, such as a toll road. While some general obligation bonds are payable from general funds, others are backed by dedicated taxes on property. The former types of ...
Municipal bonds have long been considered well-suited for high-net-worth investors because their income returns are generally free from federal income taxes.
Types of municipal bondsThere are a couple of different types of muni bonds, including:General obligation (GO). These are issued by a government and allow the government entity to tax residents in order to pay back the bondholder. Some general obligation bonds are from general funds or backed...
In addition, some funds invest in securities backed by projects in specific states, so depending on the individual investor's state of residence, the income may be free from state and local taxes as well. In general, because of their inherent tax advantage, municipal bond funds are not meant...
根据Safety of the original money部分的“When investing in municipal bonds, investors are paid back the full face value of their investment when the due date comes or earlier if called.(当投资市政债券时,投资者在到期日到来时,或在更早的时候,获得投资的全部面值。)”可知,投资市政债券不会损失本金,...
Potential for tax-free income Many investors use municipal bond funds to help reduce their tax burden. Although municipal bond yields are generally lower than taxable bond fund yields, some investors in higher tax brackets may find they have a higher after-tax yield from a tax-free municipal ...
The vast majority of bonds on the market are taxable, including all corporate bonds. Somemunicipal bonds, state bonds, and other governmental bonds may also be subject to taxes, even though they are traditionally thought of as being tax free. The standard of whether the bond is tax free or...
funds raised must be used for qualifying municipal projects. In addition, no company can owe more than $40 million of IRBs, and the cost of issuing bonds cannot exceed 2% of the capital raised. There are other requirements limiting the acquisition of land and used equipment with bond proceeds...
Knowing the best bonds to buy largely depends on the investor's risk tolerance, time horizon, and long-term financial goals. Some investors might invest in bond funds, which contain a basket of debt instruments, such as exchange-traded funds. Investors who want safety and tax savings might op...