What does "sinking fund" mean in your own words?

Thank you for your question I agree with the answer Nikita Bhavsar

A sinking fund is a fund established by a government agency or business for the purpose of reducing debt by repaying or purchasing outstanding loans and securities held against the entity. It helps keep the borrower liquid so it can repay the bondholder.

 Sinking fund is created to meet a known liability at a definite future date and invested in outside securities.A sinking fund is created by means of a definte sum set aside periodically out of profit every year.

A sinking fund is a fund established by a government agency or business for the purpose of reducing debt by repaying or purchasing outstanding loans and securities held against the entity.
It helps keep the borrower liquid so it can repay the bondholder.

A bond sinking fund is a restricted asset of a corporation that was required to set aside money for redeeming or buying back some of its bonds payable. The bond sinking fund begins when the corporation deposits money with an independent trustee. The trustee then invests the money in order for the balance in the sinking fund to increase. The balance in the sinking fund will also grow from additional required deposits made by the corporation. The bond sinking fund decreases when the trustee purchases or redeems the corporation’s bonds.

Not all corporations with bonds payable are required to have a bond sinking fund. However, bonds with sinking funds are likely to be viewed as less risky.

Sinking funds are used by goverments to work against the risk of liquidity.
These funds enable reduction in debts by purchasing or repaying loans and securities.
This strategy is used against the risk of liquidity issues.

Sinking Fund is a fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.

A sinking fund is a financial term related to companies who borrow money in the form of bond issues and the repayment process is characterized by periodic payments at maturity where in order to decrease the risk of high interest rates on its bonds the borrowing company sells a part of its borrowed bonds at a relatively fixed par value or at market value whichever is less to another company. 
In this manner, the company is trying lessen its losses in the marketplace and add safety to interest rates risk, and to replace a part of its debt with bonds of low revenues in order to stay on the safe side and maintain a win-win position in the market.

 a sinking fund is a like in which an organization sets aside money over time to clear of its debts.
 it  can also be used to set aside money for purposes of replacing capital equipment as it becomes obsolete

http://en.wikipedia.org/wiki/Sinking_fund