What is munis?

"Munis" is a common abbreviation for municipal bonds, which are debt securities issued by a state, municipality, or county to finance public projects such as schools, roads, and bridges. These bonds are often considered a relatively low-risk investment, as they are backed by the taxing power of the issuing government entity.

There are two types of municipal bonds: general obligation bonds, which are backed by the full faith and credit of the issuer, and revenue bonds, which are backed by the revenue generated from a specific project.

Municipal bonds are typically exempt from federal income tax and may also be exempt from state and local taxes for investors who reside in the issuing state. This tax-exempt status can make them an attractive investment option for individuals in higher tax brackets.

Investors interested in municipal bonds can purchase them through a broker or dealer, or through mutual funds or exchange-traded funds (ETFs) that specialize in municipal bonds. It's important for investors to carefully evaluate the creditworthiness of the issuer, as well as the terms and risks associated with the specific bond before investing.