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Return To Bonds FAQ Archive   What is a tax-free bond? Answered By Editor Basically, a tax free bond is a type of bond that should have lower interest rates. Usually called munis, tax free municipal bonds will not require you to pay federal, state, and usually no local taxes on the interest you receive. It may sound tempting but you should first compare the regular and the munis bond's interest rate to be sure that you are getting the best deal possible. keywords: Bond | Bonds | Financing | Stocks | Tax Free Cashing Us Savings Bonds

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