The Key Benefit of Municipal Bonds: Tax-Free Interest. Municipal Bonds are not liable to Tax.
Hence the correct answer is False.
On the plus side, highly rated municipal bonds are generally a very safe investment compared to most other assets. The failure rate is small. Like any bond, there is interest rate risk. If your money has been tied up for his 10 or 20 years and interest rates are rising, you're stuck underperforming.
Municipal bonds (munis) are bonds issued by government agencies. When you buy a municipal bond, you are lending money to the issuer for a certain period of time and paying a certain number of interest payments.
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