The bond market has been a scary place to invest lately, with soaring rates causing losses in 2013. But in 2014, municipal bonds are starting to look appealing, especially to investors who can benefit from their unique tax advantages.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, discusses municipal bonds. He notes that muni bonds are in the unusual situation of yielding more than comparable Treasuries, even though Treasury bonds are taxable while munis are free of federal income tax. Despite the perceived risk from high-profile bankruptcies like Detroit, many muni bonds are backed by insurance companies, with Assured Guaranty (NYSE:AGO) and Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) among companies insuring munis right now. Dan concludes by looking at some ways to get exposure to munis, including the iShares AMT-Free National Muni ETF (NYSEMKT:MUB) and similar state-specific investments.