Why to invest in Municipal Bonds India?
Most municipal bonds are exempt from federal taxes on the interest they earn. Tax-free investments can make your portfolio more tax efficient, especially if you fall into a high tax bracket and if the current tax policies are changing for the worse. You can invest in Municipal bonds can help you diversify your bonds (fixed income) portfolio positions as well. When you purchase a municipal bond , you're loaning money to a municipality, city, village, county, or state. Typically, the municipality borrows money to pay for infrastructure projects such as building or repairing roads or a community center. The municipality generally pays back the bonds with money made from those projects - by paying off a bridge bond with money that is raised from bridge tolls, for instance. Most municipal bonds are exempt from federal taxes on the interest they earn. Additionally, if the bond is issued in the state that you live in, you may owe no state taxes either. However, interest on some municipal ...