Z-Bond

A Z-bond is a type of municipal bond that is exempt from federal income tax. This means that the interest income from a Z-bond is not subject to federal income tax. However, Z-bonds are still subject to state and local income taxes.

Z-bonds are issued by state and local governments to finance public projects. The interest rate on a Z-bond is typically lower than the interest rate on a taxable bond of similar maturity. This is because the federal government provides a tax exemption for Z-bonds, which makes them more attractive to investors.

Z-bonds are a good investment for investors who are looking for a safe and tax-efficient way to earn interest income. However, it is important to note that Z-bonds are not as liquid as taxable bonds. This means that it may be difficult to sell a Z-bond if you need to do so before maturity.

Here are some additional details about Z-bonds:

* Z-bonds are issued by state and local governments to finance public projects.
* The interest rate on a Z-bond is typically lower than the interest rate on a taxable bond of similar maturity.
* Z-bonds are exempt from federal income tax, but they are still subject to state and local income taxes.
* Z-bonds are a good investment for investors who are looking for a safe and tax-efficient way to earn interest income.
* Z-bonds are not as liquid as taxable bonds. This means that it may be difficult to sell a Z-bond if you need to do so before maturity.