3 Great Mutual Funds to Earn 2% - 3% in Municipal Bonds

If you make a lot of money and live in a high-tax state, municipal bonds can be magic.

The main appeal of bonds issued by state and local governments is that Uncle Sam doesn't tax the interest. But that break became less valuable to individual investors, banks and companies with the tax cuts Congress passed last year. A married couple with $200,000 in taxable income and filing jointly will have a 24% marginal tax rate in 2018, down from 28% in 2017. So a 3% tax-free muni yield now is worth the same as a taxable yield of 3.9% to that couple, down from 4.2% in 2017.

Earnings for All

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Tom Petruno
Contributing Writer, Kiplinger's Personal Finance
Petruno, a former financial columnist for the Los Angeles Times, is an independent investor, writer and consultant. He lives in L.A.