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Short-term municipal bond ETFs offer safer, tax-efficient income compared to CDs with better liquidity.

Market News
23 May 2026
24/7 Wall Street
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Bullish
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Certificates of deposit (CDs) offer principal safety but lack liquidity and have tax disadvantages. Short-term municipal bond ETFs like iShares Short-Term National Muni Bond ETF (SUB) provide a flexible alternative with strong credit quality and lower interest rate sensitivity. SUB's 2.62% tax-free yield translates to a 4.42% tax-equivalent yield, making it competitive with CDs while allowing easier access to funds without penalties. This makes SUB a compelling option for investors seeking capital preservation, income, and liquidity with tax efficiency.

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