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Government bond fund

A government bond fund is a mutual fund that invests in government bonds. A wide variety of government bonds are sold including Treasury bonds, municipal bonds, and various bonds issued by goverment agencies. Check the prospectus for details of income taxes as some of these bond are free of federal income taxes, and others may be free of state and/or local income taxes.

Expanded Definition

The term usually applies to municipal bonds and tax free bond funds.

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