There is the basic difference between mutual fund and annuity. The difference lies in the level of taxation at the time of declaring the retirement plan. It is when MF is held outside the proper retirement account. There are specific MF holders and they are well taxed for the dividends and these are subjected to the capital gains at the time of selling the position. The annuities are not like the mutual funds and they offer the form of tax deferral. Mutual fund is described as the pool of money and the cash is invested in various ways. It is different from the rest of instruments like bonds, stocks and the cash.
Features of Annuity
There is the concept of Annuities Vs. Mutual Funds. Annuity is the form of investment vehicle that will help the investor with several benefits. In this regard, you can talk about the variable annuities. It will offer the investor with the diversification by making use of the subaccount that helps in investing through the different financial vehicles. There is even the option of the fixed annuity and it guarantees a specific rate of interest based on the original principle. It will offer the fixed rate which has similarity to the certificate of deposit.
Connection between MF and Annuity
You can purchase both the annuity and the MF directly from the dealer or the broker. The purchase is made through the corresponding financial advisor. Here you can state the concept of Annuities Vs. Mutual Funds. Both MF and annuity can even be purchased straight from the issuing company. You have the most popular investing companies in the field these days. With the efforts of the investment company you can directly buy the annuities and mutual funds. Both are stupendous options in the field of investment and you can make use of them in order to save money for the future.