Theoretically we keep depreciation for writing off an asset value and it will be a fund for purchasing a new asset. How to keep it as a fund practically?

Depreciation means allocate the cost of the asset to the period in which asset used.
Its normally the amount of an asset that is used/charged during a particular period.
It will not be a fund to purchase new asset for the organization.I could not find such type of fund/funds in my professional career.
To purchase new assets or to improve the current assets normally CAPEX management and budget took place in big organizations.

Theoretically, depreciation is charged on assets to come at the economic value of an asset.
In other words, to recognize the used or exhausted part of the asset.
And most importantly, it neither involves any fund outflow nor accumulation of any fund to purchase any new asset.
It is purely an accounting transaction which creates a fictitious liability i.e., Accumulated Depreciation.
It is created to comply with the Historical Cost Principle of accounting which requires an asset to be recorded and reported at its cost price.
So, accumulated depreciation is created to record the usage of the asset according to matching and periodicity principle.
Depreciation involves no cash out flow, that is why it is added back while preparing the Cash Flow statement.

Depreciation written off  is not going out of business. It

 remains in the business as a reserve. So that is fund.

We can keep it invested in a separate fund periodically  to that extent

for the asset replacement.Investment can be to the extent of the depreciation written off or proportionate replacement value of the asset.

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The question is partially correct.
Depreciation is a non cash expense and it reduces the profit available for distribution to shareholders or withdrawal by proprietor, thus indirectly reserving money for asset purchase in future.