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What’s the difference between an accumulation and income fund?
What’s the difference between an accumulation and income fund?
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Written by Sadie Cash
Updated over a week ago

The difference boils down to how income is paid from the fund.

Income: Sometimes called distribution funds, these funds pay any interest or dividends to your Dodl cash balance. The Cash market fund is an ‘income’ class fund.

Accumulation: These funds pay the income back into the fund, increasing the amount of the fund you own.

❗ If you hold the fund in a pension, ISA or Lifetime ISA, this income won’t be taxed. But if you hold the fund in a general investment account, it will be taxable. It’s important to know that this includes income from accumulation funds – even though you’re not paid it directly.

If you have a general investment account, dividends for both income and accumulation funds will be included on your annual tax statement.

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