Municipal bonds are increasingly attracting investors looking for tax-advantaged income streams. These bonds, issued by state and local governments, offer an exemption from federal income taxes, making them a particularly attractive option for individuals in higher tax brackets.

The funds raised through municipal bond issuance are typically used to finance public projects such as schools, hospitals, roads, and other infrastructure improvements. The relative safety and stability associated with municipal bonds, coupled with their tax benefits, contribute to their appeal.

Financial advisors often recommend municipal bonds as part of a diversified portfolio, especially for those seeking to minimize their tax burden. However, it’s crucial for investors to carefully consider the creditworthiness of the issuer and understand the specific terms and conditions of the bond before making an investment decision.