sinking fund
Gradual repayment pool
A sinking fund is money set aside regularly to pay off a debt or replace an asset.
Companies establish sinking funds to retire bonds at maturity; individuals might create one for a future car purchase or home repair.
The fund "sinks" the debt by accumulating resources to eliminate it: The HOA maintains a sinking fund for roof replacement.
Gradual debt reduction schedule
- redemptionRecovery or moral restoration
- periodic paymentsRecurring scheduled transfers
- installmentPeriodic partial payment
- debt servicePrincipal and interest payments
bond indenture · trustee · defeasance · par value · face value · payment schedule
Conditional third-party deposit
- provisionPreparatory supply or clause
- accrualIncremental addition over time
- allocationDistribution of shares
- set-asideReserved for future use
earmarking · appropriation · balance sheet · trust account · book entry
Decreasing money owed
- risk mitigationReducing exposure to threats
- creditworthinessAbility to repay debts
- financial stabilitySound economic standing
- credit ratingAssigned measure of borrower reliability
investor confidence · fiscal responsibility · debt management · capital preservation · financial prudence
amortization
Gradual debt reduction schedule
- redemptionRecovery or moral restoration
- periodic paymentsRecurring scheduled transfers
- installmentPeriodic partial payment
debt service · bond indenture · trustee · defeasance · par value · face value · payment schedule
escrow
Conditional third-party deposit
- provisionPreparatory supply or clause
- accrualIncremental addition over time
- allocationDistribution of shares
set-aside · earmarking · appropriation · balance sheet · trust account · book entry
debt reduction
Decreasing money owed
- risk mitigationReducing exposure to threats
- creditworthinessAbility to repay debts
- financial stabilitySound economic standing
credit rating · investor confidence · fiscal responsibility · debt management · capital preservation · financial prudence
- fundsendowment, ETF, seed money
- reservesreserve, reserves, bank reserves, cash reserves, fuel reserve
- savingssavings account, piggy bank, online savings, savings bonds, savings plan
- budgeting termsexpense tracker, savings goal, bill reminder, monthly budget, weekly budget
- money tipsbudgeting, investing, debt repayment, expense tracking, cost-cutting
- public financepublic debt, budget deficit, tax revenue, budgets, expenditure
sinking fundemergency fund
Reserve for unexpected expenses
rainy day fund · contingency fund · slush fund · petty cash · general fund
sinking fundballoon payment
Large final loan installment
lump-sum payment · balloon loan · interest-only loan · deferred payment · revolving credit
sinking fundrevolving credit
Reusable loan with limit
line of credit · balloon payment · leveraging · borrowing · deficit financing
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