Tax free bond funds?

What do you think of tax free bond funds? With rising interest rates will they produce lower yields? Is the money in them pretty liquid? Can I take out cash at any point?

http://www.kiplinger.com/personalfinance...
The top finds seem to yield about 8-9 %. Tax free. Is this a very safe investment?

yea, my kiplinger link does not work. I was looking at:
Oppenheimer Rochester Municipals Y RMUYX Total return 1 year 9.20%
Oppenheimer AMT NY Municipal A OPNYX Total return 1 year 8.73%

you can take out any dividends the fund earns with no problem. to get cash out other than that you can SELL some or all of your shares, or if you have a margin account the brokerage house may LOAN you money against the shares you have. ALL mutual funds are subject to market risk, i.e. price fluctuations.

The safety is a matter of how the bonds in the fund are rated, some governments do issue what is called junk bonds, not all that secure. Especially if the bonds are 'revenue bonds'.

You probably want to take a look at your tax bracket and figure out if the rate of return is enough compared to the taxable version. In general, bond funds aren't going to do as well if interest rates keep rising, yes. No one really knows exactly when the Fed is going to stop raising rates, but they seem to be leveling off.

8-9% seems kind of high for munis, so I kind of doubt that this is going to be a safe investment, but I haven't done any in-depth research on any of those funds.

Bond Funds held during Rising Interest rates can lose a lot of money. Bond traders will sacrifice Principal Investment in order to make their "yield" look good. At least if you own the actual Tax-Free Bonds themselves, you can hold on to maturity and get all of your money back.

A couple of things you should consider first. Make sure the bonds in the fund are actually tax free, not all municipal bonds are. Generally munis are best for people in high tax brackets without a lot of write offs. The rising interests rate will affect muni bonds the same way all bonds are affected. There is an inverse relationship between interest rates and prices so as rates go up you may see the value of the shares go down. Mutual funds are very liquid, you can sell the shares any day the market is open. There may be a fee for selling depending on what kind of shares you buy. Also, what you have listed here are the one year total returns. The total return is the income earned on the portfolio plus any capital gains. While the interest on munis is tax free, you will have to pay taxes on any capital gains.