Investment Captial

A capital investment is the acquisition of a fixed asset that is anticipated to have a long period of use before it has to be repaired or replaced. Two of the most easily recognisable examples of capital investments are property or land. A capital investment can be made any time that a company acquires goods that will be benefit the operation of the business, but will not be used to cover any operational costs of the business.

A capital investment doesn’t have to be an asset that is equipment or land, investment capital can be something as simple as an amount of money that is kept separate in an interest bearing account or something similar. As this resource is not being used to cover current business expenses capital assets of this type are available to be used to generate additional revenue by accruing interest. This is why it would be proper to consider an initial sum of money used to open a standard savings account as a capital asset, as a rate of interest will be generated from the principal amount each year turning the asset into a capital investment.