497(d)
FT 242
Bank & Financial Services Growth Trust, Series 2
Supplement to the Prospectus dated March 24, 1998
Notwithstanding anything to the contrary in the Prospectus,
Unit holders who acquire Units which, as a result of a reduction in the
aggregate underlying value of the Equity Securities, are not subject to
an initial sales charge will be subject to the maximum remaining
deferred sales charge (initially $.35 per Unit). In such case the
maximum sales charge may exceed 4.5% of the Public Offering Price per
Unit but in no event will the maximum sales charge exceed 5.5% of the
Public Offering Price per Unit.
August 31, 1998
