<PAGE>   1
                            PRIVATE INVESTMENT CLASS
                                     of the
                             CASH RESERVE PORTFOLIO
                                       of
                            TAX-FREE INVESTMENTS CO.

                        Supplement dated June 18, 1998,
                   to the Statement of Additional Information
                              dated July 29, 1997,
                        as supplemented January 30, 1998



         On May 12, 1998, the Board of Directors (the "Board") of Tax-Free
Investments Co. approved, subject to shareholder approval, the elimination of
or changes to certain fundamental investment policies of the Cash Reserve
Portfolio (the "Portfolio").  Shareholders of the Portfolio will be asked to
approve these changes at a special meeting to be held on July 17, 1998.  If
approved, these changes will become effective as of July 24, 1998.

         Reference is made to Investment Restrictions (1) and (9) of the
Portfolio, set forth on pages 25 and 26.  The Board has unanimously approved
the elimination of these investment restrictions and in the event shareholders
approve the proposed changes, Investment Restrictions (1) and (9) will be
eliminated in their entirety.

         Reference is made to Investment Restrictions (4) and (10) of the
Portfolio, set forth on pages 25 and 26.  The Board has unanimously approved
the revision of these investment restrictions  and in the event shareholders
approve the proposed changes, Investment Restrictions (4) and (10) will be
revised in their entirety and will read in full as follows:

         "(4) purchase or sell puts, calls, straddles, spreads or combinations
thereof[.]"

                                      and

         "(10) purchase or sell commodities or commodity futures contracts."



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