Capital Account

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DEFINITION of 'Capital Account'

A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public and private international investments flowing in and out of a country.

May also refer to an account showing the net worth of a business at a specific point in time.

INVESTOPEDIA EXPLAINS 'Capital Account'

The capital account includes foreign direct investment (FDI), portfolio and other investments, plus changes in the reserve account. The capital account and the current account together constitute a nation's balance of payments.

Since large capital inflows or outflows can have destabilizing effects on a nation's economy, many countries have controls in place to regulate capital account flows.

RELATED TERMS
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  5. Foreign Direct Investment - FDI

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