What does Accumulation Unit mean?

Accumulation units are gathered during the period one makes investments towards the account. In order to save and collect more units, one has to constantly save in the annuity account. Certainly the higher the sum one furnishes towards the account and the more extended the period of time, the greater the number of these accumulation units will be.

Accumulation units are in close relation with unit trusts as well, and here parts of the trust’s profits go through a cyclic phase, meaning instead of being cashed in by the investor, this generated profit is aimed to be reinvested in the trust.

Accumulation Unit explained

Accumulation units work as a fair play tool which monitors the annuitant’s allocation of funds. Dividends play a very important role in accumulation units, as these are the basis by which accumulation units grow in number.

In the case of unit trusts it is obviously a much smarter option to reinvest generated profit back into the trust than just simply cashing in those profits.