Earn 4.5% With No Taxes? How to Invest in Municipal Bonds

Want to get a tax-free return on your money? Put sewers and subway systems in your portfolio.

The municipal bonds that state and local governments sell to pay for unsexy-sounding infrastructure projects are offering their highest yields in more than a decade. New bond investors snapped up Treasurys after interest rates surged this year, but the special tax advantages of muni bonds make them also worth a look, financial advisers say.