Capital Account

AAA

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
  1. Balance Of Payments (BOP)

    A record of all transactions made between one particular country ...
  2. Current Account

    The difference between a nation’s savings and its investment. ...
  3. Capital Asset

    A type of asset that is not easily sold in the regular course ...
  4. Capital Gains Tax

    A type of tax levied on capital gains incurred by individuals ...
  5. Foreign Direct Investment - FDI

    An investment made by a company or entity based in one country, ...
  6. Net Lending

    The amount of extra funds that a sector has available to provide ...
RELATED FAQS
  1. At what level is the current account deficit considered excessive, in terms of percent?

    The current account is one of the main components of the balance of payments, which records the monetary transactions between ... Read Full Answer >>
Related Articles
  1. Economics

    Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
  2. Economics

    What Is The Balance Of Payments?

    The balance of payments helps countries to track how much money is coming in and how much money is going out. Learn more about BOPs here.
  3. Bonds & Fixed Income

    Understanding Capital And Financial Accounts In The Balance Of Payments

    The current, capital and financial accounts compose a nation's balance of payments.
  4. Credit & Loans

    Treasury International Capital

    This important economic indicator can affect interest rates, dollar value and the bond markets.
  5. Budgeting

    Current Account Deficits: Government Investment Or Irresponsibility?

    Deficit can be a sign of trouble for some countries, and of health for others. Find out what it means when more funds are exiting than entering a nation.
  6. Investing

    How To Trade Foreign Stocks

    We weigh the major ways to trade foreign stocks for investors.
  7. Economics

    Vietnam -- New Asian Hot Spot For Tech Investment

    Vietnam now has a rapidly expanding tech sector that's attracting investors from around the globe due to low business costs and highly skilled workers.
  8. Economics

    Oil Investments Boost Egypt's Recovery Prospects

    Major foreign oil companies have provided a big boost to the Egyptian economy by agreeing to invest around US$17 billion in the country's energy sector.
  9. Economics

    Fast-Growing Israeli Startups Pulling Investors In

    Due to its government's policies, and an innovative defense sector that offers high-level training, Israel has become fertile ground for tech startups.
  10. Economics

    What’s Missing For A Turnaround In Brazil?

    Today, many investors have written off Brazil following several years of poor performance, decelerating growth and chronically high inflation.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center