The interest rate is high because of perceived risk. Just be aware that states have defaulted: http://www.publicbonds.org/public_fin/default.htm http://www.pub

The interest rate is high because of perceived risk. Just be aware that states have defaulted: http://www.publicbonds.org/public_fin/default.htm http://www.publicbonds.org/public_fin/default.htm The largest default in the history of the municipal bond market was the Washington Public Power Supply System's (WPPSS) default on $2.25 billion in bonds. WPPSS launched a risky program to build five nuclear power plants in the 1970s to supply electricity to the Pacific Northwest. Only one of the five planned nuclear plants was ever completed. The WPPSS fiasco gave a lot more credibility to concerns that tax-exempt bonds were not a completely safe bet.