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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Chesapeake Financial Planning
588 Bellerive Road, Suite 1C • Annapolis, MD • 21409
Phone: 410-974-0410 • Fax: 410-974-0614
• amber@chesapeake-financial.com

 

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Norma E. Finkner is a Registered Representative offering securities through SagePoint Financial, Inc., member FINRA/SIPC. Certain insurance products, accounting, tax and investment advisory services offered through, Chesapeake Financial Planning & Tax Services, Inc.,a registered investment advisor not affiliated with SagePoint Financial, Inc.