Municipal bonds, or muni-bonds, are funds that are used by municipalities to keep their infrastructure going. Find out why municipal bonds pay a higher rate of interest than traditional U.S. treasury bonds with help from a registered financial consultant in this free video on investments and personal finance.
This is financial adviser, Patrick Munro, talking about Understanding Municipal Bonds, also known as muni-bonds, for short. Municipalities exist all over America in various counties, and they need to keep their infrastructure going, they need to pay their police forces. They need to keep up local water works. And they way they fund that is, through federal funds, no doubt, but there's always a short fall. And that short fall is taken care of, or funded with, municipal bonds. They pay a higher rate of interest than the traditional U.S. treasury bond, but there is a higher level of risk that's inherent in those municipal bonds, as well. Many municipalities around the United States are, in fact, on paper, bankrupt. But they continue to take in tax revenues and pay their bills, but as a result, many of their infrastructures are failing. So understanding municipal bond issues is an issue that you must be dedicated to. Get in touch with a bond broker who will show you the various issues that you can participate in, and the terms and conditions thereof. This is financial adviser, Patrick Munro, talking about understanding municipal bonds.