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Where to buy Tax free State bonds?

tetzaboca 217 14 November 28, 2015 at 07:16 PM in Finance (8)
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I am a resident of Maryland and was interested in purchasing Maryland State l Bonds. I am aware that if you purchase municipal bonds for the state which you are a resident (or Puerto Rico) you are exempt from federal, state, and local taxes. This being said I am interested in buying some Maryland bonds and could not see them on my current brokerage (sharebuilder). Are there other brokerages that offer this or a state website you have to go to do this? I am new to buying bonds so any help is appreciated. Thanks in advance.

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#2
Quote from tetzaboca View Post :
I am a resident of Maryland and was interested in purchasing Maryland State l Bonds. I am aware that if you purchase municipal bonds for the state which you are a resident (or Puerto Rico) you are exempt from federal, state, and local taxes. This being said I am interested in buying some Maryland bonds and could not see them on my current brokerage (sharebuilder). Are there other brokerages that offer this or a state website you have to go to do this? I am new to buying bonds so any help is appreciated. Thanks in advance.
Buying individual municipal bonds is possible from many online brokers (perhaps not something like Sharebuilder, though). However it can be tricky and often the minimum buys are very high. However, there are state municipal bond funds that are worth looking in to. A quick Googling suggests MDXBX from T. Rowe Price could be an option. It's 5-star rated by Morningstar and has $2B in assets (but do your own research to see if it's right for you).

I would wager that most individual investors looking for bonds use mutual funds (or exchange traded funds) rather than individual bond issues. You can also find national muni funds though you lose some of the tax benefits.
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#3
I would avoid muni bond funds in this interest rate environment. Basic economics tells you that when rates go up, bond prices will fall and rates have only one way to go. If you want to buy muni bonds, best to do so with the actual bonds with the intent to hold them to maturity imo. Otherwise, look to something else. My 2 cents.
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#4
Quote from dukeblue219 View Post :
Buying individual municipal bonds is possible from many online brokers (perhaps not something like Sharebuilder, though). However it can be tricky and often the minimum buys are very high. However, there are state municipal bond funds that are worth looking in to. A quick Googling suggests MDXBX from T. Rowe Price could be an option. It's 5-star rated by Morningstar and has $2B in assets (but do your own research to see if it's right for you).

I would wager that most individual investors looking for bonds use mutual funds (or exchange traded funds) rather than individual bond issues. You can also find national muni funds though you lose some of the tax benefits.
Sounds good I actually saw that MDXBX before. I will see what brokerage options are available since I have a little more money now. Thanks a bunch for the info guys.
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#5
Quote from YanksIn2009 View Post :
I would avoid muni bond funds in this interest rate environment. Basic economics tells you that when rates go up, bond prices will fall and rates have only one way to go. If you want to buy muni bonds, best to do so with the actual bonds with the intent to hold them to maturity imo. Otherwise, look to something else. My 2 cents.
Without knowing their complete financial situation, how can you give this "advice"?? Depending on a person's situation, muni bonds could be a perfect fit. What if they only need a 2% yield to meet their goals?
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