Municipal Bond Forum
Security and return
Q
I will have sizeable returns from maturing bonds soon. As a senior citizen, I would like to reinvest these returns only where federally insured. What might you suggest?
A
James A. Klotz responds:
If you must have U.S. government guaranteed securities, your choices will be CDs, Treasury bonds or GNMA securities, all of which unfortunately provide very slim, taxable returns.
In the tax-free bond market, you would be restricted to bonds escrowed in U.S. government securities, also with negligible yields
We would suggest there are many well-secured municipal bonds that provide positive returns, after factoring in the rate of inflation. Federally guaranteed securities will not.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.