Income vs accumulation: How do I decide which 'share class' to buy? Instead investors should now only buy "clean" funds, which are commission-free (fund shops now make their money by charging you directly). To full understand this, click here for our guide. When it comes to "income" or "accumulation," this is what you need to know. Both will have the same charge but they work in slightly different ways. The accumulation ("acc") share class reinvests the income generated by the fund manager back into the fund, while the income ("inc") share class pays the income to you in cash. The latter option should be used by someone who is relying on the income to supplement their lifestyle. For someone in your position who is young and is investing for the long term the accumulation share class is the better option as over time the effect of "compounding" will significantly boost your investment pot. FE Trutsnet, the analyst, worked out how much better off an investor who invested a lump sum of £10,000 twenty years ago would be today if they bought an accumulation share class in one of the four funds that are in the table below. The income share class in the table takes into account both the capital growth and income that would have been handed back to investors over the period. Fund name Accumulation share class Income share class Invesco Perpetual High Income Jupiter Merlin Income M&G Corporate Bond Seperately this chart below shows the amount of income these funds generated over the past twenty years. A - Invesco Perpetual High Income (£18,600) B - Rathbone Income (£17,500) C - Jupiter Merlin Income (£11,000) D - M&G Corporate Bond (10,800) Rob Gleeson, head of research at FE Trustnet, said the figures show investors should only choose the income share class if they are supplementing their pensions or relying on the frequent payments for living expenses. The compounding effect of income is profound when looking at 20-year performance. Over the long-term income often has more of an influence on total return than capital growth, and so not taking the opportunity to invest it could cost you many thousands of pounds. If you are relying on income from your investments on a quarter-by-quarter or year-by-year basis, then investing in an income share class is very worthwhile. However, if you you're investing for the future you should be reinvesting your income. It may be a welcomed relief to see money come into your account every quarter, but it's doesn't justify the differences in returns over the long term. Put a question to our experts: moneyexpert@telegraph.co.uk