Municipal bonds are debt obligations issued by states and local government to raise money for general purposes or to finance a specific project. Municipal bond investors receive a fixed tax-free interest payment semi-annually with the return of their principal on a specific maturity date. Unless otherwise specified, municipal bond obligations are exempt from all federal income taxes, are usually also exempt from state and local taxes in their state of issuance. Learn More
Corporate bonds are debt obligations, issued by corporations. When you buy corporate a bond, you are actually lending money to the corporation that issued it, which promises to return your principal, on a specified maturity date. Until that time, they pay you a stated rate of interest. Of course, the interest you receive from corporate bonds is taxable.Learn More
U.S. government agencies issue bonds to finance activities supported by public policy. These agencies include the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank, to name just a few. These issuers make credit available to sectors of the economy that may not otherwise be able to afford the costs of financingLearn More.
High Yield Bonds
There’s no getting around it: high yield corporate bonds are not for everyone. Yet for the investor who doesn’t mind taking a risk with his or her portfolio, a high yield bond can provide quite the return. But how does an investor decide to take a chance on high yield bonds? As with so many things in life, knowledge is key. Realizing the risk involved won’t diminish it, but learning about the potential pitfalls as well as benefits of high yield bonds will help make for a well-educated decision.Learn More.
Mortgage Backed Securities
A mortgage-backed security (MBS) is a type of asset-backed security that is secured by a mortgage or collection of mortgages. This security must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pays periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.Learn More.