Just like a traditional 401k plan (i.e., a full-time employer 401k), a self-directed solo 401k is a retirement trust but for the self-employed–that is, business owners with no full-time W-2 employees in any business that they own/control.
As a result, the solo 401k liquid funds have to be held in a separate bank /brokerage account or bank/ brokerage accounts if the plan has multiple business owners and sources (e.g., Roth, pretax and voluntary after-tax) of funds in the solo 401k plan and in the name of the solo 401k using the plan’s EIN. I.R.C. 401(a); Treas. Reg. 1.401-1(a)(3)(i). Therefore, you cannot hold the solo 401k funds in your personal or business bank account as that would result in a distribution.
With respect to the self-directed alternative investments such as real estate, promissory notes and private placement investments, those are required to be held by the trustee of the solo 401k, which may be the business owner, but the investments must be tilted in the name of the self-directed solo 401k using the plan employer identification number (EIN).
