Are municipal bonds the smart choice for me?
-
I have extra cash in a high-yield savings account, but as a high earner, taxes are taking a big bite out of my interest. Does investing in municipal bond funds help my after-tax earnings, or am I just creating new risks, such as volatility and limited cash access?
-
I was thinking about that tax hit, too. One move people often make is shifting some of that cash into municipal bonds. Because the income is usually tax-exempt, your "after-tax" return often beats that of a regular savings account.
It’s definitely a trade-off, though; you lose some of that instant liquidity, and the price can fluctuate. A good strategy is to split your funds: use cash for immediate needs and municipal bonds for long-term savings.
Hello! It looks like you're interested in this conversation, but you don't have an account yet.
Getting fed up of having to scroll through the same posts each visit? When you register for an account, you'll always come back to exactly where you were before, and choose to be notified of new replies (either via email, or push notification). You'll also be able to save bookmarks and upvote posts to show your appreciation to other community members.
With your input, this post could be even better 💗
Register Login