Sinking fund. A fund to which are contributed amounts of money at specified times for the
redemption of a debt. For instance, when a sinking fund is established for the redemption of an
issue of bonds a certain amount of money is added to the fund each year (or at other stated
intervals) until finally the fund amounts to enough to redeem (pay off) the bonds.  Sometimes the
money paid into a sinking fund is invested in other bonds (or other securities) the interest
payments (or dividends) received from which help to swell the sinking fund. It is not infrequently
the case that a sinking fund is established to redeem drawn bonds ; see Drawn bond.