Are international government bonds still tax exempted and insured?
I know that if you purchase a bond/treasury in the USA, and you're a US citizen, your investment is always backed by the government, and also tax exempt. HOWEVER, say I am a US citizen and I want to invest in a Greece 3-Month bond. If this is the case, will this greece bond still be tax exempt and insured even though I am a US citizen? If not, can I expect risk, and to pay even MORE tax than usual since it's a foreign bond?
- Lost EquationLv 77 years agoFavorite Answer
The risk are real. There may be no warning when a foreign bank fails. There also may be no equivalent to Federal Deposit Insurance Corporation (FDIC) insurance in the United States, to bail out your investment. Finally you are still exposed to adverse movements of the currency in relation to the U.S. dollar.
Interest on foreign government bonds is not tax exempt.
- TomLv 57 years ago
You should expect risky. They are not insured. They are probably not tax exempt.