Accumulating capital (v. gr. thesauros, treasure house) means in the economic surrounding field the fact that the yield of a fund obtained in the accounting period is not paid in cash to the shareholders of the fund but for the increase of the fund assets (accumulated capital) becomes used. The individual portions have thus a higher eigenvalue.

To separate is accumulating capital of the reinvestment. Here the yields are paid, put on then however (possibly in an automated procedure) in further papers of the same security again. Thus the fund management passes the appreciation of assets on by the dispatching of additional fund portions to the shareholders.

Apart from fiscal aspects accumulating capital and reinvestment do not differ in the net yield achievement.

In the theory the value of the individual fund portion rises exactly around the accumulated capital amount by accumulating capital and/or by the reinvestment. In many cases however accumulating capital provides in relation to the payment, like the compound interest with investments of funds, for a superproportional increase of the fund assets. For the shareholders accumulating capital has besides the "“advantage"” that the Kapitalzuwachs hereby connected is connected with a smaller burden of taxation usually, whereby these referred to the sales due to the fund assets increased accordingly is the higher than the cash distribution of the yield.

The term accumulating capital is used besides, if a finance company does not pay the obtained profit to the partners, but adjusts in reserves. In certain body expensive systems the not paid (accumulated capital) profit with another control item is taxed than the paid profit.

Comparisons: Thesaurus

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• capital accumulation: Information From Answers.com
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