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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteYou can buy an individual municipal bond for your own account through a brokerage firm or municipal securities dealer. For a new issue, place an order through a dealer participating in the offering; for an already-issued bond, ask a dealer about bonds available in the secondary market. Use the MSRB’s free EMMA service to research the issuer, disclosures, new issues and trading information before you decide.
What “buying directly” means
Buying municipal bonds directly means owning a particular bond rather than shares in a pooled bond fund. It does not usually mean buying straight from a city or other issuer without an intermediary: customer municipal bond transactions ordinarily take place with the assistance of a dealer. FINRA explains how investors access bonds through brokerage firms in its Bonds overview.
A direct holding has its own issuer or borrower, repayment pledge, payment terms and maturity. A bond fund holds a portfolio, and its shares do not generally mature on your personal schedule like an individual bond.
Choose between a new issue and an existing bond
| Route | How you buy | What to check |
|---|---|---|
| New issue (primary market) | Place an order through a dealer participating in the offering during its initial distribution. | Read the issue’s official statement and confirm the order period, terms, price, allocation and settlement with the dealer. |
| Existing bond (secondary market) | Ask a brokerage firm or dealer about bonds currently available. A dealer may sell from its inventory or acquire a bond for resale to you. | Confirm the specific bond is available, its quoted price and yield, accrued interest, call terms, fees or markup, and settlement details. |
The MSRB’s primary-market guidance says the issuer’s official statement is intended for new-issue customers and is the primary source of information about the issuer and securities in a primary-market transaction. EMMA identifies securities in their new-issue period and offers a calendar of upcoming and recently sold issues.
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New-issue access and order priority depend on the offering’s distribution arrangements; placing an order does not guarantee an allocation. In the secondary market, availability changes, and a bond you want may not be for sale at a particular time. Many municipal bonds trade infrequently, so recent transaction information does not guarantee a future quote or an active market. The MSRB describes the secondary-market process.
Research the bond before contacting a dealer
Start with EMMA, the MSRB’s free public resource for official statements, issuer disclosures, issue information and municipal trade data. The SEC also explains municipal bond disclosures and key terms in its municipal bonds overview.
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- Set your criteria. Decide whether you are looking for a particular state or issuer, a general credit profile, a maturity range or a specific income and tax outcome. Treat these as screening criteria, not substitutes for reviewing a bond’s terms.
- Find the issue and issuer on EMMA. Check the issue description, new-issue status and available trade history. Review price and yield information as market context, not as a promise that you can transact at the same terms.
- Read the official statement. For a new issue, use the issue-specific document to understand the issuer or borrower, repayment source, maturity schedule, call provisions and other terms. For an existing bond, check the statement and relevant continuing disclosures available for that issue.
- Review continuing disclosures. Look for later financial or operating information and notices that may affect the issuer or security. Note the dates and scope of documents; a disclosure record is not a guarantee of payment.
- Ask a dealer for a current, specific quote. Confirm the security identifier and ask about availability, minimum order size, clean price, accrued interest, yield and its assumptions, call date, fees or markup, and settlement date. There is no universal minimum order size or standard commission schedule established here, so verify the terms for the specific transaction.
- Check the order before submitting it. Make sure the bond, quantity, price or pricing basis, yield assumptions and settlement details match what you intend to buy.
- Keep your records. Save the trade confirmation and issue documents, and monitor later continuing disclosures while you hold the bond.
Compare the terms that determine what you own
Repayment source and credit
A general obligation bond is backed by the issuer’s taxing power, while a revenue bond depends on specified revenues, such as fees from a project. Read the particular security pledge and identify the party responsible for payment. In a conduit borrowing, a government may issue bonds for another borrower; the governmental issuer generally is not required to pay bondholders if that borrower fails to pay. The SEC’s Municipal Bonds Investor Bulletin discusses these structures and related risks.
Maturity and call provisions
Maturity is the date principal is scheduled to be repaid. A callable bond may be repaid earlier under the conditions stated in its documents. An early call can change how long you receive interest and the return you realize, so do not assume the stated maturity is your actual holding period.
Price, coupon and yield
The coupon is the bond’s stated interest rate; it is not the same as the yield you receive at your purchase price. Buying above or below par affects yield. Compare candidate bonds using the price and yield on the same basis, including the relevant call date when applicable. A quoted yield depends on assumptions and is not a guaranteed total return.
Tax treatment
Municipal bond interest is generally exempt from federal income tax and may also be exempt from state and local tax for residents of the issuing state. Taxable municipal bonds and other exceptions exist, and an investor’s result depends on the specific security and personal tax circumstances. Verify the issue’s tax status and consult a qualified tax professional about your situation; tax exemption alone does not establish that a bond is suitable.
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Liquidity, interest rates and inflation
Some municipal bonds trade rarely. Trade history can help you understand prior transactions, but it does not ensure that you can sell promptly or at a particular price. Fixed-rate bond prices can fall when market interest rates rise; inflation can also reduce the purchasing power of fixed payments. If you sell before maturity, you may receive more or less than you paid.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What retail-trading statistics can—and cannot—tell you
An MSRB report published May 24, 2023, found that individual-sized trades of $100,000 or less accounted for 1.2% of primary-market par amount and 13.4% of secondary-market par amount traded over 2018–2022. These are historical shares of par amount, not current participation rates or the odds of getting a particular bond. They also do not establish a universal minimum purchase size. Ask the dealer about the specific issue and order you have in mind. See the MSRB report announcement.
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Risks to weigh before placing an order
- Credit risk: The issuer or other responsible borrower may be unable to make scheduled payments.
- Interest-rate risk: Market-value changes can leave you with a loss if you sell before maturity.
- Call risk: Early repayment under the bond’s terms can shorten the investment and change its yield.
- Liquidity risk: Limited trading may make it difficult to find a buyer or a reliable current price.
- Inflation risk: Fixed payments may buy less over time.
- Tax risk: Tax treatment varies by issue and investor; do not assume every municipal bond’s interest is tax-exempt for you.
A municipal issuer or tax-exempt interest does not make a bond risk-free. The SEC’s Investor Bulletin, dated April 28, 2021, provides further background on municipal bond features and risks.
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