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Office: (281) 398-8600

Toll-Free: (866) 664-4040

Email: [email protected]

Choosing Between Municipal vs Corporate Bonds

It’s about aligning to your financial goals, tax situation, and risk tolerance

The choice to invest in municipal bonds versus corporate bonds reflects your financial goals, tax situation, and risk tolerance. Municipal bonds appeal to investors seeking tax advantages and lower risk. Corporate bonds appeal to investors who seek higher returns and are willing to accept potentially higher risk and taxable income.

Here is a quick comparison:

Tax Treatment
Risk Level
Yield
Purpose of Issuance
Liquidity
Credit Ratings
Investor Suitability
Municipal Bonds
Interest is generally tax-free at the federal level (and sometimes state/local, if issued in the investor's state).
Typically lower risk; backed by government entities or revenue streams.
Lower yields due to tax advantages.
Funds public projects like schools, roads, and utilities.
May be less liquid compared to corporate bonds.
Often high, but some may carry credit risk (for example, revenue bonds).
Ideal for high-income investors in high tax brackets.
Corporate Bonds
Interest is fully taxable as ordinary income.
Higher risk; tied to the creditworthiness of corporations.
Higher yields to compensate for higher risk and tax obligations.
Funds corporate expansion, debt refinancing, or operations.
May be more liquid due to a broader and active secondary market.
Vary widely; investment-grade to high-yield (junk bonds).
Suitable for investors seeking higher returns and willing to accept greater risk.

The DRL Group helps high-net-worth investors maximize tax-free returns by proactively maintaining their custom bond portfolios through all market conditions.

We trade both Municipal and Corporate Bonds

Approximately 80% of our transactions are in the tax-exempt sector with 80% falling under the insured category. The other 20% of our business comes from Corporate Bond transactions with 50% of these being in High Yield Corporates.

Talk to a member of our team about your portfolio goals.

(281) 398-8600
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