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municipal bonds

  1. Bonds issued by nonprofit bodies such as cities, public hospitals, and school boards. They bear relatively low interest rates, but accrued interest is exempt from federal income tax.



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Marc Lichtenfeld, chief income strategist at The Oxford Club, believes that municipal bonds are solid options for higher earners or people living in high-tax states.

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Are tax-free municipal bonds my best option, or what would you suggest?

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It means investing in international stocks or in Treasury and municipal bonds, and keeping some cash in a high-yield savings account, too.

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Citigroup’s exit from the $4 trillion market for municipal bonds, a field it once dominated, means for the business of financing state and local governments.

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The deal would also lower the proportion of a building that must be financed by municipal bonds to 30 percent from 50 percent in order for its developer to qualify for the credit.

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