A variable annuity differs from a fixed annuity in that inside a variable annuity are investments similar to mutual funds. These investments are called subaccounts, and the value varies based on the performance of the investments.
For more information, read our recent article: Difference Between Fixed and Variable Annuities.
Learn more about the tax advantages of EFTs by reading our recent article Is an EFT Better than a Mutual Fund?
Learn more about how certain mutual fund distributions are taxed by reading our recent article How are Mutual Funds Taxed?