Sinking fund

Sinking fund,

Definition of Sinking fund:

  1. A sinking fund helps companies that have floated debt in the form bonds gradually save money and avoid a large lump-sum payment at maturity. Some bonds are issued with the attachment of a sinking fund feature. The prospectus for a bond of this type will identify the dates that the issuer has the option to redeem the bond early using the sinking fund. While the sinking fund helps companies ensure they have enough funds set aside to pay off their debt, in some cases, they may also use the funds to repurchase preferred shares or outstanding bonds.

  2. A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue. A sinking fund is established so the company can contribute to the fund in the years leading up to the bond's maturity.

  3. Reserved created by periodically setting aside certain sums in a custodial account (as cash or investment in marketable securities) for future replacement of an asset or repayment of a liability.

How to use Sinking fund in a sentence?

  1. My dad told me that he was setting aside funds for a sinking fund that we would need at some point.
  2. Paying off debt early via a sinking fund saves a company interest expense and prevents the company from being put in financial difficulties in the future.
  3. Callable bonds with sinking funds may be called back early removing future interest payments from the investor.
  4. A sinking fund is an account containing money set aside to pay off a debt or bond.
  5. Sinking funds may help pay off the debt at maturity or assist in buying back bonds on the open market.
  6. The sinking fund was increasing at an unexpectedly high rate which concerned the management about determining the optimal use of our funds.
  7. You may want to set up a sinking fund to save you just incase everything goes bad at the same time.

Meaning of Sinking fund & Sinking fund Definition

Sinking Fund,

Sinking Fund Definition:

  • A sinking fund is a fund that holds or saves money to pay off debts or obligations. The issuing company will have to repay the loan in the future, and the settlement fund will help reduce the heavy tax burden. A settlement fund will be created to allow the company to contribute to the fund in the years prior to the maturity of the bond.

    • A sinking fund is an account that contains money to pay off debts or obligations.
    • Redemption funds can be helpful in repaying loans as they mature or redeem bonds in the open market.
    • Prepaid bonds with falling funds can be withdrawn quickly, eliminating interest payments to future investors.
    • Repaying a loan through a sinking fund saves the company from interest expenses and saves the company from financial difficulties in the future.

  • Sinking Fund means, The amount that is regularly allocated by the company to pay off debts, taxes, etc.

  • Amounts that are permanently deposited in separate debit accounts to relieve the problems of bonds or large shares.

Literal Meanings of Sinking Fund


Meanings of Sinking:
  1. Soak anything, especially submerged liquids.

  2. Put yourself down from a high position, keep yourself down.

  3. Gradually reduce or decrease the value, quantity, quality or intensity.

  4. Insert below the surface.

  5. Eat fast (alcoholic beverages)

  6. Fix the sink with water inlet and drain pipe.

  7. A pond or swamp where river water is lost through steam or drains.

  8. Summary for Abyssinia

  9. Crime or corruption site

Sentences of Sinking
  1. Watching the coffin sink beneath the waves

  2. You can relax on the terrace at sunset.

  3. Its production fell to one-third of its pre-war value.

  4. The rails are bent under the wooden surface

  5. I'm standing on the kitchen sink

  6. The vice is drowning in pride and unnatural luxury

Synonyms of Sinking

become lower, embed, become quieter, get lower, be engulfed, come downwards, become submerged, insert, quaff, get softer, drink, get quieter, go down, come down, go downwards, drop, descend, go lower, become softer, gulp down, fall


Meanings of Fund:
  1. Paying for a specific purpose.

  2. The amount of savings or money available for a specific purpose.

Sentences of Fund
  1. The World Bank refused to finance the project

  2. Created Economic Investment Coordination Fund

Synonyms of Fund

be a patron of, provide capital for, subsidize, purse, finance, reserve, support, underwrite, kitty, put up the money for, pay for, back, sponsor, maintain, provide finance for, endow, pool, capitalize, float, collection