An option offered by some 401(k) plans that allows participants to invest in funds and individual stocks and bonds outside the regular investment menu. Also referred to as a self-directed account.
Letter: B
Bond
A type of investment that is an IOU or debt. When you buy a bond, you are lending money to the issuer for a period of time. The issuer pays you regular interest payments and agrees to repay your investment (called the “principal”) at a certain date (the “maturity date”). Issuers of bonds include the U.S. government, local governments, and companies. The main types of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds.
Beneficiary
The person or institution named by a plan participant to receive the benefits of the account if the participant dies.