# What is the difference between simple annuity and general annuity?

**difference**is that

**in a simple annuity**the payment interval is the same as the interest period while

**in a general annuity**the payment interval is not the same as the interest period.

Subsequently, one may also ask, what is general annuity?

Definition: A **general annuity** is an **annuity** where the payment intervals are not the same as the interest intervals. Example 1: Monthly payments of $500 where interest is 6%/a, compounded monthly.

Furthermore, what is the example of simple annuity? The most common payment intervals are yearly (once a year), semi-annually (twice a year), quarterly (four times a year), and monthly (once a month). Some **examples** of **annuities**: Mortgages, Car payments, Rent, Pension fund payments, Insurance premiums.

Beside above, what is difference between ordinary annuity and annuity due?

**Ordinary annuity** refers to the sequence of steady cash flow, whose payment is to be made or received at the end of each period. **Annuity due** implies the stream of payments or receipts which fall **due** at the beginning of each period. As the payment made on **annuity due**, have a higher present value than the regular **annuity**.

Who should not buy an annuity?

Typically you **should** consider an **annuity** only after you have maxed out other tax-advantaged retirement investment vehicles, such as 401(k) plans and IRAs. If you have additional money to set aside for retirement, an **annuity's** tax-free growth may make sense - especially if you are in a high-income tax bracket today.