General Disclaimer: All the articles here are presented with no warranty. The information displayed on investingbytes.com may be different from what you see when you visit a financial institution, service provider, or a specific product’s site. We are not responsible for any errors or other inaccuracies in the content on our website. The information provided on our website is solely for informational and educational purposes, We recommend that you obtain considered and independent advice from a financial professional before you make any financial decisions or implement any financial strategy.
Advertiser Disclosure: Card Listings and other financial products that appear on this site are from financial companies for which investingbytes.com may receive compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. Investingbytes.com does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.
Tax-free income funds that you should consider investing in
Paying taxes can sometimes be a difficult job to do; however, it is important and is a part of living in a country that offers its citizens multiple benefits. That doesn’t mean that one can’t benefit from the legal ways available through which one can cut down on taxes by whatever amount. Investors can consider tax-free income funds to increase their income while reducing their tax payments.
To understand the concept of tax-free income funds better, we can divide the terms. An income fund is either a mutual fund or an exchange-traded fund that offers the dividends to the shareholders. This is used by the investors to build an income stream from investments for themselves. When it comes to a tax-free fund, it indicates an investment where the dividends are not taxed. These types of tax-free income funds are known as municipal bond funds. It would be a clever investment choice to take a tax-free income fund that contains a tax-free municipal bond from the state if you belong to a higher tax bracket.
However, it is important for one to understand and analyze what kind of benefits would come out of investing in tax-free income funds, or if there would be any benefits in the first place. To do that, one can consider a marginal tax rate and then compare the rate of return on comparable tax-free and taxable income funds. Once you get to know of the investment that will give you a higher return after taxing, you will have your answer.
In a year, the American High-Income Municipal Bond Fund showed a performance of 4.33% with an expense ratio of 0.68%; the MFS Municipal high income fund showed a performance of 5.18% and an expense ratio of 0.69%; Columbia high yield municipal fund showed a performance of 5.20% and an expense ratio of 0.87%; the Principal California municipal fund showed a performance of 3.93%, while it was seen that this company’s expense ratio was 0.77%.
Not just one of the oldest or the most popular, real estate investment planning is also an assured w...Read more
You cannot always decide how your money gets spent. What if the month just entered the second week a...Read more
Each and every health insurance plan that you may think of subscribing to consists of some essential...Read more
Every business has risks in its regular functions and the best way to protect the assets of a busine...Read more
Subscribe to our newsletter to receive latest updates in the world of finance!