Earmarking

What is 'Earmarking'

Earmaking consists of funds (or capital) that are set aside to pay for a specific project or event. In some cases, the term is also synonymous with the word "flagged", or "marked", especially when used in certain congressional settings.

BREAKING DOWN 'Earmarking'

Major financial institutions, as well as state or federal governments, will often earmark funds received from bond issuances to pay for certain projects. For example, a state may issue municipal bonds, and then earmark the funds received from the bonds' sales to pay for a project such as a new road or bridge.

When used in a congressional setting, the term is often used to refer to specific legislation. For example, a bill might be earmarked for a vote. It may also be earmarked for a presidential veto.

RELATED TERMS
  1. General Provisions

    A balance sheet item representing funds set aside by a company ...
  2. Speculative Capital

    The funds earmarked by an investor for the sole purpose of speculation. ...
  3. Fund

    A source of money that will be allocated to a specific purpose. ...
  4. Claims Reserve

    The claims reserve is money that is earmarked for the eventual ...
  5. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  6. Capital Investment

    Funds invested in a firm or enterprise for the purposes of furthering ...
Related Articles
  1. Personal Finance

    6 Outrageous Political Earmarks

    Congress recently failed to adopt a ban on all earmarks. Find out why this type of funding is so controversial, and where it has gone wrong in the past.
  2. Economics

    What is Restricted Cash?

    Restricted cash is cash that’s not available for a company to use immediately. It’s earmarked for some specific purpose.
  3. Mutual Funds & ETFs

    Why Muni Bonds and Bond Funds are Perfect Together

    Municipal bonds and bond funds differ in several ways, which is partly why they complement each other well.
  4. Bonds & Fixed Income

    The Top 5 Municipal Bond Funds for 2016

    Understand how the addition of municipal bond mutual funds can enhance a portfolio, and learn the top-rated municipal bond funds to consider for 2016.
  5. Mutual Funds & ETFs

    Bond Funds Boost Income, Reduce Risk

    These funds can provide stable returns for those who depend on their investment income.
  6. Bonds & Fixed Income

    Basics Of Federal Bond Issues

    Treasuries are considered the safest investments, but they should still be analyzed when issued.
  7. Investing

    Investing in High-Yield Corporate Bond Funds

    High-yield corporate bond funds provide an interesting investment option, particularly for private investors chasing returns and a broad diversification.
  8. Bonds & Fixed Income

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

    Discover five reasons why investing in municipal bonds after the Fed hikes interest rates, and not before, can be a great way to boost investment income.
  9. Mutual Funds & ETFs

    Why You Should Invest In Municipal Bond ETFs

    These versatile instruments have become popular with investors in higher tax brackets and fill a specific niche in the wide selection of fixed-income offerings.
  10. Bonds & Fixed Income

    Explaining Government Bonds

    A government bond is a debt security a government issues.
RELATED FAQS
  1. What do cities do with the funds generated from municipal bonds?

    Learn more about municipal bonds, including the various types of bonds issued and the purposes of municipal bond funds, such ... Read Answer >>
  2. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ... Read Answer >>
  3. Who or what is backing municipal bonds?

    Learn about the basics of municipal bonds, including the various revenue sources that are utilized to back or secure municipal ... Read Answer >>
  4. Why are simple-interest loans preferred by payday loan companies and pawn shops?

    Learn how you can invest in the corporate bond market without investing a large amount of capital through bond funds and ... Read Answer >>
  5. Can mutual funds only hold stocks?

    Learn about which types of mutual funds consist of only stocks, which may include stocks in addition to other assets and ... Read Answer >>
  6. What is a triple tax-free municipal bond?

    At its core, a triple tax-free municipal bond is just like any corporate bond: it is a debt instrument, a loan given to a ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center