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Question for the Money Doctors

Question submitted on Feb 3, 2019.


How and where can an individual find lists of of available municipal bonds?
Can an investor purchase individual municipal bonds on their own, or must they pay a broker to do this for them?
I'm aware of the availability of municipal bond funds, but I'm in interested in individual bonds.


Individual municipal bonds can be bought through bond dealers, banks, brokerage firms, and in a few cases directly from the municipality. Individual municipal bonds can either be bought on the primary market, which is for new issue bonds, or on the secondary market, which is a market for trading bonds after the bond has already been issued on the primary market.

If an investor wants to buy a new issue municipal bond, the process for doing so is called the retail order period. Understand that getting involved at this level can be difficult and is often reserved for high net worth individuals. The retail order period typically lasts a couple of days and levels the playing field between retail customers and large institutions. 

If you purchase a bond in the primary market, there are no fees or markups for the purchase. A bank or group of banks will bring the bond issue to the market and you would be required to have an account with one of the banks leading the new issue or with one of the banks that are syndicating the offering. 

Additionally, you would be delivered an offering document or prospectus. The bonds are typically offered on a schedule, which highlights the different maturities and yields. You put in a request with the investment representative you are dealing with for your choice of bond coupon, maturity date, and the number of bonds. Ordinarily, each bond has a value of $1,000. 

The secondary market allows investors to buy bonds, which have already been issued, from other investors, bond dealers, banks and brokerage firms. In order to purchase bonds, you would first need to open an account with a firm or bank that deals in bonds. 

You could go with an online do-it-yourself firm or a traditional bank or brokerage firm, and depending on which route you choose, you would either work with a representative or fly solo to find bonds that satisfy your specific needs. When purchasing bonds in the secondary market, the price of the bond will usually include a markup, which is the dealer's cost plus profit. 

An additional commission may also be charged if you are utilizing a representative or firm to find bonds for you or to execute the transaction. The price of a bond is quoted as if the bond was selling for $100, however, the face value is normally $1,000. 

So if you were quoted a price of 98 and you bought 10 bonds, the total cost would be $9,800 ($98 price of bond x $100 = $980 value per bond x 10 bonds = $9,800). Likewise, a bond could be quoted at 102 and if you bought 10 bonds, the total cost would be $10,200 ($102 price of bond x $100 = $1,020 value per bond x 10 bonds = $10, 200).

The Electronic Municipal Market Access (EMMA) system is operated by the Municipal Security Rulemaking Board and serves as the official source for municipal securities disclosures and related market data in the United States.  Go to their website at for more information.

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