10-year Treasury note
Debt obligation of the U.S. Treasury that has a maturity of 10 years. The 10-year Treasury note replaced the 30-year Treasury bond as the benchmark bond in determining interest rate trends. As a group, Treasurys are regarded as the safest bond investments, because they are backed by "full faith and credit" of the U.S. government. See "Types of Bonds."
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12b-1 fees
These are fees the fund charges for marketing and distribution expenses. They are included in the expense ratio, but often are talked about separately. These fees are charged in addition to a front- or back-end load, and you'll find that many no-load funds charge them, too. If a 12b-1 fee puts a fund's expense ratio above the average for that class of fund, think twice before buying. See "Cost Control."
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30-Year Treasury bond
Debt obligation of the U.S. Treasury that has a maturity of 30 years. Before being replaced as a bellwether by the 10-year Treasury note, the 30-year Treasury bond was considered the benchmark bond in determining interest rate trends. (Also known as the long bond.) It typically has a higher interest rate than other Treasurys, but more inflation and credit risk. But as a group, Treasurys are regarded as the safest bond investments, because they are backed by "full faith and credit" of the U.S. government. Treasury bonds pay interest semiannually and can be purchased in minimum denominations of $1,000 or multiples thereof. See "Types of Bonds."
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401(k) plan
An employer-sponsored retirement-savings plan funded by employees with contributions that are deducted from pretax pay. Employers frequently add matching contributions up to a set limit. Employees are responsible for managing the money themselves, allocating the funds among a selection of stock, bond and cash investment funds. Investment gains aren't taxed until the money is withdrawn. See "401(k) Section."
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403(b) plan
A retirement-savings plan for employees of colleges, hospitals, school districts and nonprofit organizations. The plan, which is similar to the 401(k) plan offered to many corporate employees, is funded by employees with contributions that are deducted from pretax pay. Employees manage the money themselves, selecting from fixed and variable annuities, and mutual funds. Investment gains aren't taxed until the money is withdrawn. See 401(k).
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