Municipal Bonds*

(tax-free income investing using "muni bonds")

Beacon Capital Management Advisors (BCM) works with a fee-based investment management company that focuses on municipal bonds for investors desiring tax free income. Tax free bonds may be subject to AMT.

What are municipal bonds?

Municipal bonds (nicknamed "munis" or "muni bond") are loans issued by state, city and county governments to raise money to build schools, highways, hospitals, sewer systems and other public projects. When you purchase a municipal bond, you are lending money to a state or local government to finance these public projects. The state or local government promises to pay you a specified amount of interest (usually paid semiannually) and return the principal they borrowed to you on a specific maturity date. Most municipal bonds offer income that is exempt from federal, state and city taxes if applicable, provided you reside in the state or city that is issuing the municipal bonds. Tax free bonds may be subject to AMT.*

Who could benefit from investing in a municipal bond portfolio?

Investors in high tax brackets who want tax free income may want to invest in municipal bonds. Since most municipal bonds provide tax free interest they can potentially offer investors higher after tax yields than corporate bonds of the same credit quality. Investors who are not in high tax brackets may earn a higher after tax yield from a corporate bond.** Municipal bonds can not be placed in an IRA or any qualified retirement plan. Learn more about municipal bond portfolio management services here.

   Need Help or Advice?  |  Open a Municipal Bond Account

Disclosures:

* Bonds contain interest rate risk (as interest rates rise bond prices usually fall); the risk of issuer default; and inflation risk. The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Interest rate increases can cause the price of a debt security to decrease. A portion of the dividends you receive may be subject to federal, state, or local income tax or may be subject to the federal alternative minimum tax. A portion of the income may be subject to state taxes, local taxes and the federal alternative minimum tax.

** Consult a tax or financial professional for further information or consult current tax laws for full details.

** Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.