Municipal bonds are issued by state and local governments to fund infrastructure and other public service projects. When you buy a municipal bond, you give money to state or local governments, and they give you interest payments over the life of the bond. At the end of a time period (e.g. 10 years), you get your initial loan back. They can be a great way to earn tax-free investment income. This is especially helpful for those in high income tax brackets. Learn more by watching this short video.