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 marginal tax bracket?

What is the yield (in percentage points) on the municipal bond you are considering?

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Financial Solutions
12117 FM 2244, (Bee Cave Road)
Suite 220
Austin, TX 78738
Phone: 512.280.6868 or 866.240.2262 Fax: 512.263.1144
www.financialsolutions-tx.com joelw@financialsolutions-tx.com

Joel Williamson is an Investment Advisor Representative of and securities are offered through USA Financial Securities Corporation, Member FINRA/SIPC (www.finra.org), 6020 E Fulton St. Ada, MI 49301.  A Registered Investment Advisor.  Financial Solutions is not affiliated with USA Financial Securities.

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