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What Are Revenue Bonds?

By Sam Swenson, CFA, CPAUpdated Jun 4, 2025 at 12:51 PM

Key Points

  • Revenue bonds finance specific projects like airports, yielding principal and interest from the project's income.
  • These bonds often yield higher returns than general obligation bonds but carry a greater risk of default.
  • Investing in revenue bonds offers federal and sometimes state tax exemptions, supporting vital local infrastructure.

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