Taxable Equivalent Yield  

Municipal bonds are sold by cities, counties, states and other political bodies (public hospital, school district).

The federal government and its agencies do not sell municipal bonds. However, most municipals are free of federal taxes. Because of this, the stated interest rate on municipals is typically lower than comparable non tax-exempt bonds.

How much would you have to receive from a taxable bond to realize an equivalent yield? You can find the answer by entering the following information:

     

What is your federal income tax bracket?

What is the yield (in percentage points, 0 to 10 percent) on the municipal bond you are considering?

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Horizon Financial Services Inc.
1001 Hingham Street, Ste 100 • Rockland, MA • 02370
Phone: 781-792-1900 • Fax: 781-792-0900
• rickg@cfnmail.com

Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.

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