State or local governments offer muni bonds or municipals, as they are called, to pay for special projects such as highways or sewers. The interest that investors receive is exempt from some income taxes. Bloomberg Financial Dictionary
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municipal bond UK US noun [C] FINANCE, STOCK MARKET
► a bond that is sold by a town or city government in the US: »
You don't need to pay a commission when buying or selling a municipal bond.
Financial and business terms. 2012.