[Logo of USAA MUTUAL FUND, INC.
USAA Eagle S&P 500 Index Fund
appears here]
SUPPLEMENT DATED JANUARY 2, 1997
TO THE PROSPECTUS DATED SEPTEMBER 16, 1996
Effective January 1, 1997, the $10 annual account maintenance fee is
waived for all accounts having a balance of $10,000 or more at the time the
maintenance fee is assessed. USAA Shareholder Account Services assesses this
fee in order to offset part of the costs of maintaining shareholder accounts.
The fee is deducted from the dividends paid to each shareholder account at a
rate of $2.50 per quarter. Additional information on the fee may be found
under "FEES AND EXPENSES", "PERFORMANCE INFORMATION" and "DIVIDENDS,
DISTRIBUTIONS AND TAXES" in the Prospectus.
29466-0197
