Comments on: Personal Finance 101: What Are Municipal Bonds?

By: joe

joe — Thu, 29 Mar 2007 00:50:16 +0000

Is it correct that if I buy a municipal bond in Colorado that matures in 15 years, and in 15 years I am a resident of another state, like Louisiana, Louisiana will tax me on the interest?

By: Terry

Terry — Sun, 18 Mar 2007 05:15:25 +0000

What are municipal bonds?

Um, should I even care? (LOLOL)

By: rhbee

rhbee — Sat, 17 Mar 2007 22:48:42 +0000

So you can only buy them through a broker or as a function of a mutual fund?

By: samerwriter

samerwriter — Fri, 16 Mar 2007 23:17:17 +0000

One *very important* point is that muni bonds are tax exempt only in the state that issued the bond. For example a California muni bond is not exempt for an Oregon taxpayer.

That leads to a big drawback of municipal bonds. They aren’t easy to buy. Outside of a few states, such as California and New York, the selection is pretty limited.

Limited selection means less competition and likely higher expenses.

As an individual investor it’s difficult to buy or sell muni bonds outside of a fund, and if you do buy or sell that way, you will find the market illiquid and therefore fraught with expenses.

By: jake

jake — Fri, 16 Mar 2007 22:43:36 +0000

Where do you buy these municipal bonds? Do you go to the city hall or through a broker? For example I want to buy municipal bonds from my city, how do I go about doing that?