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Tax-free investments allow you to earn interest that's free from federal taxes and, in some cases, from state taxes. There are many tax-free investments available, one of which may be suitable for your own needs.
Individual municipal bonds
When you invest in municipal bonds, you're loaning money to help finance public projects, such as highways, hospitals, housing and public education. In return, you earn a specified rate of interest for a specified period of time. At maturity your principal is returned in full. Municipal bonds are exempt from federal taxes and, in certain instances, may also be exempt from state and local taxe<|.
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