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How to Make a Sinking Fund. Thatâs when we learned how to make a sinking fund. A sinking fund is not a complicated financial concept. In fact, itâs one of the simplest financial concepts to understand. Basically, a sinking fund is the act of saving a little money every month for a large future expense.
Sinking Fund Provision. A provision in some bond indentures requiring the issuer to put money aside to repay bondholders at maturity. In bonds with such a provision, a fund or account is set up into which a issuer deposits money on a regular basis to repay the bond when it matures. See also: Sinking Fund Bond. 1  Facebook.