Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about the funds and their investments, you can obtain a copy
of each fund's most recent financial report and portfolio listing, or a
copy of the Statement of Additional Information (SAI) dated January 13,
1995. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of any of these documents, call Fidelity at
1-800-544-8888.
Investments in the funds are neither insured nor guaranteed by the U.S.
government, and there can be no assurance that a fund will maintain a
stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.
These money market funds seek high current income while maintaining a
stable $1.00 share price by investing in high-quality, short-term money
market securities. Cash Reserves invests in a broad range of money market
securities. U.S. Government Reserves invests only in U.S. government
securities or related instruments.
FIDELITY
CASH RESERVES
and
FIDELITY
U.S. GOVERNMENT
RESERVES
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
CAS-pro-195-0 2
PROSPECTUS
JANUARY 13, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
REVISED FEBRUARY 10, 1995
SUPPLEMENTED AUGUST 28, 1995
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
GOAL: Income while maintaining a stable $1.00 share price. As with any
mutual fund, there is no assurance that a fund will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. FMR Texas Inc. (FTX), a subsidiary
of FMR, chooses investments for the funds.
CASH RESERVES
STRATEGY: Invests in high-quality, short-term money market securities of
all types.
SIZE: As of November 30, 1994, the fund had over $14.5 billion in assets.
U.S. GOVERNMENT RESERVES
STRATEGY: Invests in high-quality, short-term money market securities
issued or guaranteed by the U.S. government or government agencies.
SIZE: As of November 30, 1994, the fund had over $1.1 billion in assets.
WHO MAY WANT TO INVEST
Either fund may be appropriate for investors who would like to earn income
at current money market rates while preserving the value of their
investment. Each fund is managed to keep its share price stable at $1.00.
U.S. Government Reserves offers an added measure of credit safety with its
focus on U.S. government securities. The rate of income will vary from day
to day, generally reflecting short-term interest rates.
By themselves, the funds do not constitute a balanced investment plan.
However, because they emphasize stability, they could be well-suited for a
portion of your savings. Both funds offer free checkwriting to give you
easy access to your money.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the MONEY MARKET
category.
(right arrow) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(solid bullet) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell, or
hold shares of a fund. See page 24 for more information about these fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Wire redemption fee $5.00
Annual account maintenance fee
(for accounts under $2,500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. Each fund also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, adjusted to
reflect current fees, and are calculated as a percentage of average net
assets.
CASH RESERVES
Management fee .19%
12b-1 fee None
Other expenses .33%
Total fund operating expenses .52%
U.S. GOVERNMENT RESERVES
Management fee .20%
12b-1 fee None
Other expenses .29%
Total fund operating expenses .49%
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
CASH RESERVES
After 1 year $ 5
After 3 years $ 17
After 5 years $ 29
After 10 years $ 65
U.S. GOVERNMENT RESERVES
After 1 year $ 5
After 3 years $ 16
After 5 years $ 27
After 10 years $ 62
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of
expenses for portfolio
management, shareholder
statements, tax reporting, and
other services. These costs
are paid from the fund's
assets; their effect is already
factored into any quoted
share price or return.
(checkmark)
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Report and have
been audited by Coopers & Lybrand L.L.P. (Cash Reserves) and Price
Waterhouse LLP (U. S. Government Reserves), independent accountants. Their
reports on the financial statements and financial highlights are included
in the Annual Reports. The financial statements and financial highlights
are incorporated by reference into (are legally a part of) the funds'
Statement of Additional Information.
FIDELITY CASH RESERVES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Selected Per-Share Data and
Ratios
2.Years Ended 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
November 30
3.Net asset value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
beginning 0 0 0 0 0 0 0 0 0 0
of period
4.Income from .077 .065 .061 .069 .086 .076 .061 .038 .029 .037
Investment
Operations
Net interest
income
5.Less (.077) (.065) (.061) (.069) (.086) (.076) (.061) (.038) (.029) (.037)
Distributions
From net interest
income
6.Net asset value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
end of period 0 0 0 0 0 0 0 0 0 0
7.Total return 8.00 6.70 6.28 7.16 8.94 7.87 6.23 3.90 2.97 3.74
% % % % % % % % % %
8.Net assets, end $ 4,08 $ 5,22 $ 9,28 $ 10,8 $ 10,8 $ 10,9 $ 10,5 $ 10,0 $ 10,3 $ 14,5
of period 6 0 0 85 97 21 19 40 14 29
(in millions)
9.Ratio of .82% .75% .70% .65% .74% .69% .58% .48% .48% .52%
expenses to
average net assets
10.Ratio of net 7.73 6.39 6.22 6.95 8.60 7.62 6.03 3.86 2.92 3.76
interest income % % % % % % % % % %
to average net
assets
</TABLE>
FIDELITY U.S. GOVERNMENT RESERVES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11.Selected Per-Share 12. 13. 14. 15. 16. 17. 18. 19. 20.
Data and Ratios
21.Years Ended 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1994B
November 30 A A A A A A A A A A
22.Net asset $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.000
value, 00 00 00 00 00 00 00 00 00 00
beginning of
period
23.Income from .079 .067 .056 .065 .083 .076 .061 .039 .025 .033 .008
Investment
Operations
Net interest
income
24.Less (.079 (.067 (.056 (.065 (.083 (.076 (.061 (.039 (.025 (.033 (.008)
Distributions ) ) ) ) ) ) ) ) ) )
From net
interest income
25.Net asset $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 1.000
value, 00 00 00 00 00 00 00 00 00 00
end of period
26.Total return 8.18 6.93 5.79 6.73 8.66 7.86 6.29 3.95 2.57 3.32 .78%C
% % % % % % % % % %
27.Net assets, $ 421 $ 688 $ 909 $ 1,5 $ 1,5 $ 1,5 $ 1,4 $ 1,2 $ 1,0 $ 1,0 $ 1,130
end of 90 45 81 36 92 43 60
period (in
millions)
28.Ratio of .77% .80% .81% .75% .80% .74% .72% .73% .73% .51% .36%D
expenses to
average net
assets
29.Ratio of net 7.86 6.57 5.79 6.52 8.29 7.66 6.13 3.88 2.57 3.27 4.77%
interest % % % % % % % % % % E
income to
average net
assets
</TABLE>
A FOR THE FISCAL YEARS ENDED SEPTEMBER 30.
B ON MARCH 17, 1994, THE TRUSTEES APPROVED A CHANGE IN THE FISCAL YEAR END
OF THE FUND FROM SEPTEMBER 30 TO NOVEMBER 30; ACCORDINGLY, THE FINANCIAL
HIGHLIGHTS ARE PRESENTED FOR THE TWO-MONTH PERIOD ENDED NOVEMBER 30, 1994.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE
TOTAL RETURN WOULD HAVE BEEN LOWER HAD FMR NOT VOLUNTARILY REIMBURSED THE
FUND.
D ANNUALIZED; INCLUDES THE EFFECT OF ANNUALIZING A VOLUNTARY REIMBURSEMENT
OF FEES BY FMR; THE RATIO OF EXPENSES BEFORE THIS EXPENSE REDUCTION WOULD
HAVE BEEN .49% (ANNUALIZED).
E ANNUALIZED
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD. The
total returns and yields that follow are based on historical fund results
and do not reflect the effect of taxes.
Each fund's fiscal year runs from December 1 through November 30. The
tables below show each fund's performance over past fiscal years compared
to a measure of inflation. The charts on page help you compare the yields
of these funds to those of their competitors.
CASH RESERVES
Fiscal periods Pas Past Past
ended t 1 5 10
November 30, yea year year
1994 r s s
Average 3.74 4.92 6.16
annual % % %
total return
Cumulative 3.74 27.17 81.84
total return % % %
Consumer 2.81 19.06 42.36
Price % % %
Index
U.S. GOVERNMENT RESERVES
Fiscal periods Pas Past Past
ended t 1 5 10
November 30, yea year year
1994 r s s
Average 3.64 4.67 5.93
annual % % %
total return
Cumulative 3.64 25.63 77.88
total return % % %
Consumer 2.81 19.06 42.36
Price % % %
Index
UNDERSTANDING
PERFORMANCE
SEVEN-DAY YIELD illustrates
the income earned by a
money market fund over a
recent seven-day period. TOTAL
RETURN reflects both the
reinvestment of income and
the change in a fund's share
price. Since money market
funds maintain a stable $1.00
share price, current seven-day
yields are the most common
illustration of money market
fund performance.
(checkmark)
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGES are the IBC/Donoghue's MONEY FUND
AVERAGES(trademark), which assume reinvestment of distributions. Fidelity
Cash Reserves compares its performance to the All Taxable category, and
Fidelity U.S. Government Reserves compares to the Government category.
These averages, which currently reflect the performance of over 250 and 95
mutual funds with similar objectives, respectively, are published in the
MONEY FUND REPORT(registered trademark) by IBC USA (Publications), Inc. The
calendar-year average for the government category was not calculated before
1986.
30.FIDELITY CASH RESERVES
7-day yields
Percentage (%)
Row: 1, Col: 1, Value: 4.79
Row: 1, Col: 2, Value: 4.07
Row: 2, Col: 1, Value: 4.35
Row: 2, Col: 2, Value: 3.85
Row: 3, Col: 1, Value: 4.109999999999999
Row: 3, Col: 2, Value: 3.78
Row: 4, Col: 1, Value: 4.03
Row: 4, Col: 2, Value: 3.66
Row: 5, Col: 1, Value: 3.76
Row: 5, Col: 2, Value: 3.53
Row: 6, Col: 1, Value: 3.72
Row: 6, Col: 2, Value: 3.5
Row: 7, Col: 1, Value: 3.53
Row: 7, Col: 2, Value: 3.19
Row: 8, Col: 1, Value: 3.35
Row: 8, Col: 2, Value: 3.07
Row: 9, Col: 1, Value: 3.23
Row: 9, Col: 2, Value: 2.91
Row: 10, Col: 1, Value: 3.17
Row: 10, Col: 2, Value: 2.78
Row: 11, Col: 1, Value: 3.18
Row: 11, Col: 2, Value: 2.78
Row: 12, Col: 1, Value: 3.32
Row: 12, Col: 2, Value: 2.9
Row: 13, Col: 1, Value: 3.22
Row: 13, Col: 2, Value: 2.81
Row: 14, Col: 1, Value: 3.1
Row: 14, Col: 2, Value: 2.73
Row: 15, Col: 1, Value: 2.99
Row: 15, Col: 2, Value: 2.7
Row: 16, Col: 1, Value: 2.93
Row: 16, Col: 2, Value: 2.65
Row: 17, Col: 1, Value: 2.88
Row: 17, Col: 2, Value: 2.63
Row: 18, Col: 1, Value: 2.88
Row: 18, Col: 2, Value: 2.67
Row: 19, Col: 1, Value: 2.88
Row: 19, Col: 2, Value: 2.68
Row: 20, Col: 1, Value: 2.85
Row: 20, Col: 2, Value: 2.68
Row: 21, Col: 1, Value: 2.83
Row: 21, Col: 2, Value: 2.68
Row: 22, Col: 1, Value: 2.84
Row: 22, Col: 2, Value: 2.67
Row: 23, Col: 1, Value: 2.91
Row: 23, Col: 2, Value: 2.73
Row: 24, Col: 1, Value: 2.93
Row: 24, Col: 2, Value: 2.7
Row: 25, Col: 1, Value: 2.91
Row: 25, Col: 2, Value: 2.65
Row: 26, Col: 1, Value: 2.89
Row: 26, Col: 2, Value: 2.71
Row: 27, Col: 1, Value: 3.16
Row: 27, Col: 2, Value: 2.89
Row: 28, Col: 1, Value: 3.37
Row: 28, Col: 2, Value: 3.11
Row: 29, Col: 1, Value: 3.56
Row: 29, Col: 2, Value: 3.52
Row: 30, Col: 1, Value: 3.82
Row: 30, Col: 2, Value: 3.67
Row: 31, Col: 1, Value: 4.06
Row: 31, Col: 2, Value: 3.84
Row: 32, Col: 1, Value: 4.39
Row: 32, Col: 2, Value: 4.09
Row: 33, Col: 1, Value: 4.609999999999999
Row: 33, Col: 2, Value: 4.23
Row: 34, Col: 1, Value: 4.74
Row: 34, Col: 2, Value: 4.41
Row: 35, Col: 1, Value: 5.19
Row: 35, Col: 2, Value: 4.88
Cash
Reserves
Competitive
funds average
1992
1993
1994
FIDELITY U.S. GOVERNMENT RESERVES
7-day yields
Percentage (%)
Row: 1, Col: 1, Value: 4.24
Row: 1, Col: 2, Value: 3.95
Row: 2, Col: 1, Value: 4.07
Row: 2, Col: 2, Value: 3.82
Row: 3, Col: 1, Value: 3.82
Row: 3, Col: 2, Value: 3.72
Row: 4, Col: 1, Value: 3.64
Row: 4, Col: 2, Value: 3.55
Row: 5, Col: 1, Value: 3.67
Row: 5, Col: 2, Value: 3.48
Row: 6, Col: 1, Value: 3.67
Row: 6, Col: 2, Value: 3.44
Row: 7, Col: 1, Value: 3.2
Row: 7, Col: 2, Value: 3.13
Row: 8, Col: 1, Value: 3.17
Row: 8, Col: 2, Value: 3.03
Row: 9, Col: 1, Value: 2.91
Row: 9, Col: 2, Value: 2.86
Row: 10, Col: 1, Value: 2.68
Row: 10, Col: 2, Value: 2.69
Row: 11, Col: 1, Value: 2.64
Row: 11, Col: 2, Value: 2.67
Row: 12, Col: 1, Value: 2.67
Row: 12, Col: 2, Value: 2.77
Row: 13, Col: 1, Value: 2.56
Row: 13, Col: 2, Value: 2.69
Row: 14, Col: 1, Value: 2.45
Row: 14, Col: 2, Value: 2.63
Row: 15, Col: 1, Value: 2.49
Row: 15, Col: 2, Value: 2.59
Row: 16, Col: 1, Value: 2.43
Row: 16, Col: 2, Value: 2.53
Row: 17, Col: 1, Value: 2.46
Row: 17, Col: 2, Value: 2.53
Row: 18, Col: 1, Value: 2.48
Row: 18, Col: 2, Value: 2.57
Row: 19, Col: 1, Value: 2.52
Row: 19, Col: 2, Value: 2.58
Row: 20, Col: 1, Value: 2.51
Row: 20, Col: 2, Value: 2.58
Row: 21, Col: 1, Value: 2.89
Row: 21, Col: 2, Value: 2.57
Row: 22, Col: 1, Value: 2.84
Row: 22, Col: 2, Value: 2.55
Row: 23, Col: 1, Value: 2.93
Row: 23, Col: 2, Value: 2.62
Row: 24, Col: 1, Value: 2.98
Row: 24, Col: 2, Value: 2.63
Row: 25, Col: 1, Value: 2.86
Row: 25, Col: 2, Value: 2.6
Row: 26, Col: 1, Value: 2.87
Row: 26, Col: 2, Value: 2.71
Row: 27, Col: 1, Value: 3.03
Row: 27, Col: 2, Value: 2.85
Row: 28, Col: 1, Value: 3.25
Row: 28, Col: 2, Value: 3.05
Row: 29, Col: 1, Value: 3.52
Row: 29, Col: 2, Value: 3.42
Row: 30, Col: 1, Value: 3.71
Row: 30, Col: 2, Value: 3.53
Row: 31, Col: 1, Value: 3.89
Row: 31, Col: 2, Value: 3.69
Row: 32, Col: 1, Value: 4.159999999999999
Row: 32, Col: 2, Value: 3.99
Row: 33, Col: 1, Value: 4.49
Row: 33, Col: 2, Value: 4.13
Row: 34, Col: 1, Value: 4.59
Row: 34, Col: 2, Value: 4.3
Row: 35, Col: 1, Value: 5.19
Row: 35, Col: 2, Value: 4.79
U.S.
Government
Reserves
Competitive
funds average
1992
1993
1994
THE CHARTS SHOW THE 7-DAY EFFECTIVE YIELDS FOR THE FUNDS AND THEIR
COMPETITIVE FUNDS AVERAGES AS OF THE LAST TUESDAY OF EACH MONTH FROM
JANUARY 1992 THROUGH NOVEMBER 1994.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, each fund is
currently a diversified fund of Fidelity Phillips Street Trust, an open-end
management investment company organized as a Delaware business trust on
September 17, 1992.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs. FTX has
primary responsibility for providing investment management services.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the parent company of FMR and FTX. Through ownership of voting
common stock, members of the Edward C. Johnson 3d family form a controlling
group with respect to FMR Corp. Changes may occur in the Johnson family
group, through death or disability, which would result in changes in each
individual family member's holding of stock. Such changes could result in
one or more family members becoming holders of over 25% of the stock. FMR
Corp. has received an opinion of counsel that changes in the composition of
the Johnson family group under these circumstances would not result in the
termination of the funds' management or distribution contracts and,
accordingly, would not require a shareholder vote to continue operation
under those contracts.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
Both CASH RESERVES and U.S. GOVERNMENT RESERVES seek to earn a high level
of current income while maintaining a stable $1.00 share price by investing
in high-quality, short-term money market securities.
The funds invest in money market securities of different types. Cash
Reserves buys U.S. dollar-denominated securities of domestic and foreign
issuers, including banks and other financial institutions, governments and
their agencies or instrumentalities, and corporations. U.S. Government
Reserves invests only in obligations issued or guaranteed as to principal
and interest by the United States government or by any of its agencies or
instrumentalities; in repurchase agreements secured by these obligations;
and in reverse repurchase agreements.
Cash Reserves has the flexibility to invest more broadly in pursuit of a
high level of current income, while U.S. Government Reserves offers the
added credit safety of investments in U.S. government and agency
securities.
EACH FUND earns income at current money market rates. They stress income,
preservation of capital, and liquidity, and do not seek the higher yields
or capital appreciation that more aggressive investments may provide. Each
fund's yield will vary from day to day and generally reflects current
short-term interest rates and other market conditions. It is important to
note that neither U.S. Government Reserves nor its yield are guaranteed by
the U.S. government.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that either fund will
maintain a stable $1.00 share price. The funds follow industry-standard
guidelines on the quality and maturity of their investments, which are
designed to help maintain a stable $1.00 share price. The funds will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities they buy.
In general, securities with longer maturities are more vulnerable to price
changes, although they may provide higher yields. It is possible that a
major change in interest rates or a default on the funds' investments could
cause their share prices (and the value of your investment) to change.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the funds may invest, and strategies FMR may employ in
pursuit of the funds' investment objectives. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of each fund's policies
and limitations and more detailed information about the funds' investments
is contained in the funds' SAI. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. Current holdings and recent investment
strategies are described in the funds' financial reports which are sent to
shareholders twice a year. For a free SAI or financial report, call
1-800-544-8888.
MONEY MARKET SECURITIES are high-quality, short-term investments issued by
the U.S. government, corporations, financial institutions, and other
entitites. These investments may carry fixed, variable, or floating
interest rates. A security's credit may be enhanced by a bank, insurance
company, or other entity.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
FOREIGN OBLIGATIONS, including obligations of foreign banks, U.S. branches
and agencies of foreign banks, and foreign branches of U.S. banks, may
involve different risks than domestic obligations, including risks relating
to the political and economic conditions of the foreign country involved,
which could affect the payment of principal or interest.
RESTRICTIONS: U.S. Government Reserves may not invest in foreign
obligations. Cash Reserves may not invest in foreign obligations unless
they are denominated in U.S. dollars.
ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables, or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt instrument. These involve risks that are similar to those of other
debt securities, although they may be more volatile and certain stripped
securities move in the same direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in a fund's
yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, time deposits, and short-term corporate
obligations.
RESTRICTIONS: U.S. Government Reserves may not invest in non-government
obligations.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities, including illiquid securities, may be subject
to legal restrictions. Difficulty in selling securities may result in a
loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: Neither fund may invest more than 5% of its total assets in
the securities of any one issuer, except that Cash Reserves may invest up
to 10% of its assets in the highest-quality securities of a single issuer
for up to three days. A fund may not invest more than 25% of its total
assets in any one industry (other than the financial services industry for
Cash Reserves; see below). These limitations do not apply to U.S.
government securities.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: Cash Reserves will invest more than 25% of its total assets
in the financial services industry.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
or engage in reverse repurchase agreements, but not in an amount exceeding
33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering a fund's securities. Cash
Reserves may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
CASH RESERVES seeks as high a level of current income as is consistent with
preservation of capital and liquidity by investing in money market
instruments. The fund will not purchase a security if, as a result, more
than 25% of its total assets would be invested in a particular industry;
except that the fund will invest more than 25% of its total assets in the
financial services industry.
U.S. GOVERNMENT RESERVES seeks as high a level of current income as is
consistent with the security of principal and liquidity. The fund may
engage in repurchase agreements secured by obligations issued or guaranteed
as to principal and interest by the United States government or by any of
its agencies or instrumentalities. The fund will not purchase a security
if, as a result, more than 5% of its total assets would be invested in the
securities of a single issuer other than the U.S. government or its
agencies and instrumentalities. The fund will not purchase a security if,
as a result, more than 25% of its total assets would be invested in a
particular industry.
EACH FUND may borrow money only for temporary or emergency purposes or
engage in reverse repurchase agreements, but not in an amount exceeding 33%
of its total assets. Loans, in the aggregate, may not exceed 33% of a
fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
EACH FUND'S management fee is calculated by multiplying the sum of two
components by the fund's average net assets and adding an income-based fee.
One component, the group fee rate, is based on the average net assets of
all the mutual funds advised by FMR. It cannot rise above .37%, and it
drops as total assets under management increase. The other component, the
individual fund fee rate, is .03%. The income-based fee is 6% of the fund's
gross income in excess of a 5% yield and cannot rise above .24% of the
fund's average net assets.
For November 1994, the group fee rate was .1560%. For Cash Reserves, the
total management fee for fiscal 1994 was .19%. For U.S. Government
Reserves, the total annualized management fee for fiscal 1994 was .20%.
FMR HAS SUB-ADVISORY AGREEMENTS with FTX, which has primary responsibility
for providing investment management for the funds, while FMR retains
responsibility for providing other management services. FMR pays FTX 50% of
its management fee (before expense reimbursements) for these services. FMR
paid FTX .10% of Fidelity Cash Reserves' and .10% (annualized) of Fidelity
U.S. Government Reserves' average net assets for fiscal 1994.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In fiscal
1994, Fidelity Cash Reserves and Fidelity U.S. Government Reserves paid FSC
fees equal to .32% and .13% (annualized), respectively, of average net
assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce the fund's custodian or transfer agent
fees.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
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YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 75 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage accoun t.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 220
(solid bullet) Assets in Fidelity mutual
funds: over $250 billion
(solid bullet) Number of shareholder
accounts: over 21 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
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WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. The funds are managed to keep share prices stable at $1.00.
Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for a Fidelity College Savings Plan account or a
Fidelity Payroll Deduction Program account in Cash Reserves. Refer to the
program materials for details.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
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In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
TO SELL SHARES OF FIDELITY CASH RESERVES THROUGH YOUR FIDELITY ULTRA
SERVICE OR FIDELITYPLUS ACCOUNT, call 1-800-544-6262 to receive a handbook
with instructions.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
except retirement $100,000.
(small solid bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.
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Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
(small solid bullet) There is a $5.00 fee for each
wire redemption, which will
be deducted from the
redemption amount.
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Check (check_graphic) All account types (small solid bullet) Minimum check: $500.
except retirement (small solid bullet) All account owners must sign
a signature card to receive a
checkbook.
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Exchanges may have tax consequences for you. For details on policies and
restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
Fidelity offers services that let you transfer money into your fund
account, or between fund accounts, automatically. Certain restrictions
apply for retirement accounts. Call 1-800-544-6666 for more information.
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM $100
FREQUENCY Monthly or quarterly
SETTING UP Complete the
appropriate section on
the fund application.
For existing accounts,
call 1-800-544-6666
for an application.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUND
MINIMUM $100
FREQUENCY Every pay period
SETTING UP Check the
appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM $100
FREQUENCY Monthly, bimonthly,
quarterly, or annually
SETTING UP To establish, call
1-800-544-6666 after
both accounts are
opened.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers three
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
3. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the record date of the distribution. The mailing of distribution checks
will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. A
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS. Money
market funds usually don't
make capital gain
distributions.
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TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account, be
aware of these tax implications.
Distributions are subject to federal income tax, and may also be subject to
state or local taxes. If you live outside the United States, your
distributions could also be taxed by the country in which you reside. Your
distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains. Every January, Fidelity will
send you and the IRS a statement showing the taxable distributions paid to
you in the previous year.
Mutual fund dividends from U.S. government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
During the year ended September 30, 1994, and the period ended November 30,
1994, 52% and 59%, respectively, of U.S. Government Reserves' income
distributions were from U.S. government securities.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Like most money market funds, each fund values the securities it owns on
the basis of amortized cost. This method minimizes the effect of changes in
a security's market value and helps each fund to maintain a stable $1.00
share price.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts, accounts using regular investment plans,
core accounts for a Fidelity Ultra Service Account or a FidelityPlus
brokerage account, or if total assets in Fidelity funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity
mutual fund accounts maintained by FSC or FBSI which are registered under
the same social security number or which list the same social security
number for the custodian of a Uniform Gifts/Transfers to Minors Act
account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincide
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
This prospectus is printed on recycled paper using soy-based inks.
