A municipal bond, or "muni" bond, is a type of bond issued by state and local governments to finance public projects, such as schools, highways, and hospitals. Municipal bonds are typically exempt from federal taxes and, in some cases, state and local taxes as well, making them an attractive investment option for individuals seeking tax-exempt income.

Municipal bonds are issued in different forms, including general obligation bonds and revenue bonds. General obligation bonds are backed by the full faith and credit of the issuer, while revenue bonds are backed by specific revenues generated by the project being financed. Municipal bonds may also be issued as either short-term or long-term investments, with maturities ranging from a few months to several decades.

Investing in municipal bonds can provide a stable and predictable source of income for investors, particularly those in higher tax brackets. However, like any investment, municipal bonds carry risks, including credit risk, interest rate risk, and market risk. Investors should carefully evaluate the creditworthiness of the issuer and the terms of the bond before investing.

A municipal bond, commonly known as a "muni," is a debt security issued by a local government entity, such as a city, county, or state, to raise funds for public projects like schools, highways, or infrastructure development. Investors who purchase municipal bonds essentially lend money to the issuing municipality in exchange for periodic interest payments and the return of the principal amount at maturity.

Municipal bonds are attractive to investors due to their potential tax advantages. Interest income from these bonds is often exempt from federal income tax and, in some cases, from state and local taxes, making them particularly appealing for investors in higher tax brackets. The two primary types of municipal bonds are general obligation bonds, backed by the issuer's full faith and credit, and revenue bonds, supported by the revenue generated from specific projects. These investments are a crucial source of funding for local governments, allowing them to finance essential public initiatives while providing income opportunities for investors.