Short-Term Municipal Bond

Short-term municipal bonds are debt securities, issued by state and local governments,... Short-term municipal bonds are debt securities, issued by state and local governments, which typically have a duration of less than 4 years. With duration (time to maturity) indicating the magnitude of a bond's likely price movement due to a change in interest rates, short-term duration bonds are less sensitive to changes in interest rates than either long-term municipal bonds or intermediate-term municipal bonds. This can make them attractive for investors worried that interest rates could rise, leading to a fall in bond prices. Like other municipal bonds, the interest payments from these securities are typically exempt from federal taxation. Interest payments can be also tax-free at the state level if investors are residents of the state within which the bonds are issued. Last Updated: 01/23/2025 View more View less

Short-term municipal bonds are debt securities, issued by state and local governments, which typically have a duration of less than 4 years. With duration (time to maturity) indicating the magnitude of a bond's... Short-term municipal bonds are debt securities, issued by state and local governments, which typically have a duration of less than 4 years. With duration (time to maturity) indicating the magnitude of a bond's likely price movement due to a change in interest rates, short-term duration bonds are less sensitive to changes in interest rates than either long-term municipal bonds or intermediate-term municipal bonds. This can make them attractive for investors worried that interest rates could rise, leading to a fall in bond prices. Like other municipal bonds, the interest payments from these securities are typically exempt from federal taxation. Interest payments can be also tax-free at the state level if investors are residents of the state within which the bonds are issued. Last Updated: 01/23/2025 View more View less