Certificateless Municipals

A type of municipal bond that does not issue a certificate to each owner and is therefore also a type of book-entry security. The absence of a paper certificate simplifies recordkeeping and trading for brokers, municipalities and investors.   



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Certificateless municipal bonds are attractive to certain investors because, like all municipal bonds, the proceeds are usually tax-free at the federal level and also tax-free at the state level if you live in the same state in which the bonds were issued. Municipal bonds offer a low rate of return compared to other types of bonds, but because of their tax-exempt status, they are often a good choice for high-income individuals and married couples.