FIDELITY PHILLIPS STREET TRUST, N-30D, 1996-07-02

FIDELITY PHILLIPS STREET TRUST
N-30D, 1996-07-02

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FIDELITY

(registered trademark)
U.S. GOVERNMENT RESERVES

SEMIANNUAL REPORT
MAY 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 9 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 12 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 16 Notes to the financial statements.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
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 RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first five
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of its dividends (or income).
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1996 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS

Fidelity U.S. Government Reserves 2.55% 5.36% 22.42% 72.49%

Government Money Market Funds Average 2.39% 5.04% 21.36% 69.51%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or ten
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the government money market funds average, which reflects the
performance of 233 government money market funds with similar objectives
tracked by IBC Financial Data, Inc. over the past six months. (The periods
covered by IBC Financial Data, Inc. numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity U.S. Government Reserves 5.36% 4.13% 5.60%

Government Money Market Funds Average 5.04% 3.94% 5.41%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
5/30/95 8/29/95 11/28/95 2/27/96 5/28/96

Fidelity U.S. Government 5.58% 5.30% 5.45% 4.81% 4.92%
Reserves

Government Money 5.33% 5.07% 5.09% 4.59% 4.57%
Market Funds Average

5/31/95 8/30/95 11/29/95 2/28/96 5/29/96

2.89% 2.84% 2.86% 2.76% 2.66%
MMDA

Row: 1, Col: 1, Value: 5.58
Row: 1, Col: 2, Value: 5.33
Row: 1, Col: 3, Value: 2.89
Row: 2, Col: 1, Value: 5.3
Row: 2, Col: 2, Value: 5.07
Row: 2, Col: 3, Value: 2.84
Row: 3, Col: 1, Value: 5.45
Row: 3, Col: 2, Value: 5.09
Row: 3, Col: 3, Value: 2.86
Row: 4, Col: 1, Value: 4.81
Row: 4, Col: 2, Value: 4.59
Row: 4, Col: 3, Value: 2.76
Row: 5, Col: 1, Value: 4.92
Row: 5, Col: 2, Value: 4.57
Row: 5, Col: 3, Value: 2.66
6% -
5% -
4% -
3% -
2% -
1% -
0%
Fidelity
U.S. Government
Reserves
Government
Money Market
Funds Average
MMDA
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the government money market funds average and the
average bank money market deposit account (MMDA). Figures for the
government money market funds average are supplied by IBC's MONEY FUND
REPORT(registered trademark). The MMDA average is supplied by BANK RATE
MONITOR(Trademark).
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit account
(MMDA) and a money market
fund. First, the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money
market fund will maintain a $1
share price. Second, a money
market fund returns to its
shareholders income earned
by the fund's investments after
expenses. This is in contrast to
banks, which set their MMDA
rates periodically based on
current interest rates,
competitors' rates, and internal
criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Leland Barron, Portfolio Manager of Fidelity
U.S. Government Reserves
Q. LELAND, HOW HAS THE INVESTMENT CLIMATE CHANGED DURING THE PAST SIX
MONTHS?
A. Six months ago, with the economy growing slowly and inflationary
pressures under control, most market participants expected interest rates
would continue falling well into 1996. The Federal Reserve reinforced those
expectations by twice lowering the interest rate banks charge each other
for overnight loans - known as the federal funds rate - one-quarter
percentage point, first in December 1995 and again in January 1996. By
then, the level of optimism in the market was such that the interest rate
on the six-month Treasury bill was nearly half a percentage point below the
federal funds rate.
Q. HOW HAS THE MOOD CHANGED IN RECENT MONTHS?
A. A number of developments affected the investment climate, including a
stronger-than-expected employment report for February, the surprising
strength of the housing market, improved consumer confidence and a modest
increase in wages. Taken together, these developments led most market
participants to abandon hopes of further rate cuts and to begin preparing
instead for a rate increase, perhaps as early as July.
Q. HOW DID YOU MANAGE THE FUND'S AVERAGE MATURITY AS CONDITIONS CHANGED?
A. The fund began the period with an average maturity of 42 days and has
stayed in a range between the high 30s and mid 40s throughout the period.
Normally when interest rates are heading lower, as they were at the
beginning of the period, I would aim for a longer average maturity. In this
case, however, I felt that market expectations were running too far ahead
of the Fed's actions. Instead of buying longer-term securities whose yields
took into account the likelihood of further rate cuts, I stayed with
higher-yielding shorter-term securities, and the fund profited as a result.
Later in the period, as expectations shifted and rates began to rise, I
kept the same average maturity, but for a different reason - to preserve
flexibility and keep pace with rising rates. On the last day of May, the
fund's average maturity was 42.
Q. HOW DID THE FUND PERFORM?
A. Better than most of its competitors. On May 31, 1996, the fund's
seven-day yield was 4.93%, compared to 5.58% a year ago. The fund's total
return for the six month period was 2.55%. That beat the total return
during the same period of 2.39% for the government money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S THE OUTLOOK FOR THE NEXT SEVERAL MONTHS?
A. I expect the economy to continue getting stronger rather than weaker
over the next several months, perhaps expanding at a rate slightly above
the Fed's long-term target growth rate of about 2.5%. Prolonged periods of
above-trend growth concern the markets and the Fed because of the potential
for an increase in the rate of inflation. I do not expect the Fed to raise
short-term rates immediately in an effort to slow down the economy.
However, as long as the possibility of a rate increase exists, I'd be
unlikely to significantly extend the fund's average maturity. My goal going
forward will be to preserve flexibility without sacrificing yield. What
that means in terms of the fund's average maturity is probably staying
between 35 and 45 days.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: income and a stable
$1 share price by investing in
high quality short-term
money market securities
issued by the U.S.
government or government
agencies
START DATE: November 3,
1981
SIZE: as of May 31, 1996,
more than $1.1 billion
MANAGER: Leland Barron,
since 1991; manager,
Spartan U.S. Government
Money Market Fund and
Spartan U.S. Treasury
Money Market Fund, since
1991; joined Fidelity in 1981
(checkmark)

WORDS TO KNOW
AVERAGE MATURITY: The
average maturity of debt
securities in a fund, weighted
by dollar amount. When the
average maturity is short, the
fund manager believes
interest rates will rise. When
the average maturity is long,
the fund manager is expecting
rates to fall. When the
average maturity is neutral,
the fund manager wants to
have the flexibility to respond
to rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
DISCOUNT RATE: The interest
rate the Federal Reserve
charges member banks for
loans.
FEDERAL FUNDS RATE: The
interest rate banks charge
each other for overnight
loans.
FEDERAL RESERVE: The
system designed to regulate
the U.S. monetary and
banking system. If the Fed
tightens the money supply, it
decreases the amount of
money available to the
banking system, which
generally causes interest
rates to rise.
MATURITY: The amount of time
remaining until a debt security
is scheduled to be redeemed.
TREASURY OBLIGATION: Debt
security issued directly by the
U.S. government. Payment of
principal and interest is
guaranteed.
INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/96 11/30/95 5/31/95

0 - 30 30 58 42

31 - 90 17 28 22

91 - 180 18 11 25

181 - 397 35 3 11

WEIGHTED AVERAGE MATURITY
5/31/96 11/30/95 5/31/95

Fidelity U.S. Government
Reserves 42 days 46 days 40 days

Government
Money Market Funds
Average* 49 days 47 days 41 days

ASSET ALLOCATION
AS OF MAY 31, 1996 AS OF NOVEMBER 30, 1995

Row: 1, Col: 1, Value: 66.0
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 26.0
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 1, Value: 60.0
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 32.0
Row: 1, Col: 4, Value: 1.0
Federal agency
issues 66%
U.S. Treasury
obligations 7%
Repurchase
agreements 26%
Other 1%
Federal agency
issues 60%
U.S. Treasury
obligations 7%
Repurchase
agreements 32%
Other 1%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS MAY 31, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investments

FEDERAL AGENCIES - 66.4%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - AGENCY COUPONS (A) - 2.9%
6/3/96 5.59% $ 33,000 $ 32,978
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 8.2%
6/3/96 5.40 29,000 28,997
6/3/96 5.78 15,000 14,993
6/20/96 5.33 50,000 49,985
93,975
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 9.3%
6/7/96 5.12 4,000 3,997
7/12/96 5.27 32,000 31,811
8/2/96 5.29 21,000 20,811
8/2/96 5.33 35,516 35,194
8/5/96 5.32 15,000 14,858
106,671
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 31.4%
6/3/96 5.32 (a) 49,000 48,959
6/3/96 5.34( a) 33,000 33,219
6/3/96 5.38 (a) 15,000 15,000
6/3/96 5.41 (a) 58,000 57,962
6/3/96 5.57 (a) 36,000 36,000
6/3/96 5.85 (a) 40,000 40,000
6/4/96 5.38 (a) 40,000 39,989
6/10/96 5.66 6,000 6,000
6/11/96 5.34 (a) 16,000 15,994
6/20/96 5.35 (a) 15,000 14,987
8/1/96 5.39 (a) 28,000 27,980
8/21/96 5.40 (a) 9,000 8,995
5/28/97 6.00 15,000 15,000
360,085
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 10.4%
6/7/96 5.10 44,000 43,963
8/7/96 5.32 15,000 14,853
9/5/96 5.03 30,000 29,608
10/16/96 5.37 31,000 30,384
118,808
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 4.2%
6/4/96 5.26 18,000 18,022
6/4/96 5.40 30,000 30,000
48,022
TOTAL FEDERAL AGENCIES 760,539
U.S. TREASURY OBLIGATIONS - 7.0%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILLS - 4.8%
4/3/97 5.54% $ 32,000 $ 30,571
4/3/97 5.55 26,000 24,837
55,408
U.S. TREASURY NOTES - 2.2%
8/15/96 5.00 25,000 24,965
TOTAL U.S. TREASURY OBLIGATIONS 80,373
MEDIUM-TERM NOTES (A) (B) - 0.5%
EXPORT-IMPORT BANK, U.S. (AS GUARANTOR FOR K.A. LEASING, LTD.)
6/15/96 5.44 5,473 5,473
REPURCHASE AGREEMENTS - 26.1%
MATURITY AMOUNT
(000S)
With First Boston Corporation:
At 5.32%, dated 5/14/96 due 6/17/96:
U.S. Government Obligations
(principal amount $45,340)
6.124% to 7.551%, 2/1/15 to 6/1/30 $ 43,216 43,000
With J.P. Morgan Securities, Inc.:
At 5.30%, dated 3/15/96 due 6/19/96:
U.S. Government Obligations
(principal amount $40,678)
8.50% to 9.50%, 8/15/16 to 11/15/22 38,537 38,000
At 5.32%, dated 4/19/96 due 7/18/96:
U.S. Government Obligations
(principal amount $20,172)
8.50% to 9.50%, 7/15/17 to 9/15/21 19,253 19,000
In a joint trading account
(U.S. Government Obligations)
dated 5/29/96 due 6/28/96:
At 5.32% 30,133 30,000
(U.S. Government Obligations)
dated 5/31/96 due 6/3/96:
At 5.39% 169,422 169,346
TOTAL REPURCHASE AGREEMENTS 299,346
TOTAL INVESTMENTS $ 1,145,731

LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION
ACQUISITION COST
SECURITY DATE (000S)
Export-Import Bank,
U.S. (as Guarantor for
K.A. Leasing, Ltd.) 7/29/94 $ 5,473
INCOME TAX INFORMATION
At November 30, 1995 the fund had a capital loss carryforward of
approximately $97,000 of which $31,000 and $66,000 will expire on November
30, 2001 and 2003, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) MAY 31, 1996 (UNAUDITED)

1.ASSETS 2. 3.

4.Investment in securities, at value (including 5. $ 1,145,731
repurchase agreements of $299,346) - See
accompanying
schedule

6.Cash 7. 257

8.Interest receivable 9. 5,595

10. 11.TOTAL ASSETS 12. 1,151,583

13.LIABILITIES 14. 15.

16.Distributions payable $ 16 17.

18.Accrued management fee 195 19.

20.Other payables and accrued expenses 493 21.

22. 23.TOTAL LIABILITIES 24. 704

25.26.NET ASSETS 27. $ 1,150,879

28.Net Assets consist of: 29. 30.

31.Paid in capital 32. $ 1,150,908

33.Accumulated net realized gain (loss) on investments 34. (29)

35.36.NET ASSETS, for 1,151,344 shares outstanding 37. $ 1,150,879

38.39.NET ASSET VALUE, offering price and redemption 40. $1.00
price per share ($1,150,879 (divided by) 1,151,344 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)

41.42.INTEREST INCOME 43. $ 32,182

44.EXPENSES 45. 46.

47.Management fee $ 1,218 48.

49.Transfer agent fees 1,553 50.

51.Accounting fees and expenses 68 52.

53.Non-interested trustees' compensation 4 54.

55.Custodian fees and expenses 11 56.

57.Registration fees 76 58.

59.Audit 14 60.

61.Legal 4 62.

63.Miscellaneous 8 64.

65. Total expenses before reductions 2,956 66.

67. Expense reductions (45) 2,911

68.69.NET INTEREST INCOME 70. 29,271

71.72.NET REALIZED GAIN (LOSS) ON INVESTMENTS 73. 8

74.75.NET INCREASE IN NET ASSETS RESULTING FROM 76. $ 29,279
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR
ENDED ENDED
MAY 31, 1996 NOVEMBER 30,
(UNAUDITED) 1995

77.INCREASE (DECREASE) IN NET ASSETS

78.Operations $ 29,271 $ 62,412
Net interest income

79. Net realized gain (loss) 8 (66)

80. 81.NET INCREASE (DECREASE) IN NET ASSETS 29,279 62,346
RESULTING FROM OPERATIONS

82.Distributions to shareholders from net interest (29,271) (62,412)
income

83.Share transactions at net asset value of $1.00 per 823,396 1,491,809
share
Proceeds from sales of shares

84. Reinvestment of distributions from net interest 27,664 59,448
income

85. Cost of shares redeemed (888,182) (1,492,867)

86.87. (37,122) 58,390
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS

88. 89.TOTAL INCREASE (DECREASE) IN NET ASSETS (37,114) 58,324

90.NET ASSETS 91. 92.

93. Beginning of period 1,187,993 1,129,669

94. End of period $ 1,150,879 $ 1,187,993

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEAR TWO MONTHS YEARS ENDED SEPTEMBER 30,
ENDED ENDED ENDED
MAY 31, 1996 NOVEMBER 30, NOVEMBER 30,

(UNAUDITED) 1995 1994 1994 1993 1992 1991

95.SELECTED PER-SHARE DATA

96.Net asset value,
beginning of
period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

97.Income from
Investment
Operations .025 .055 .008 .033 .025 .039 .061
Net interest income

98.Less
Distributions (.025) (.055) (.008) (.033) (.025) (.039) (.061)
From net interest income

99.Net asset
value, end of
period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

100.TOTAL
RETURN B 2.55% 5.60% 0.78% 3.32% 2.57% 3.95% 6.29%

101.RATIOS AND SUPPLEMENTAL DATA

102.Net assets,
end of period
(000 omitted) $ 1,151 $ 1,188 $ 1,130 $ 1,060 $ 1,043 $ 1,292 $ 1,436

103.Ratio of
expenses to
average net
assets .51%A .55% .36% .51% .73% .73% .72%
A

104.Ratio of
expenses to
average net
assets after .50%A .55% .36% .51% .73% .73% .72%
expense reductions ,C A

105.Ratio of net
interest income
to average 5.06%A 5.43% 4.77% 3.27% 2.57% 3.88% 6.13%
net assets A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).

FINANCIAL HIGHLIGHTS
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity U.S. Government Reserves (the fund) is a fund of Fidelity Phillips
Street Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Delaware business trust. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital. These
differences are primarily due to expiring capital loss carryforwards, and
resulted in a reclassification between paid in capital and accumulated
realized gain (loss) on investments.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
equal to the principal amount of the repurchase agreement (including
accrued interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
REVERSE REPURCHASE AGREEMENTS. At all times that a reverse repurchase
agreement is outstanding, the fund identifies cash and liquid securities as
segregated in its custodian records with a value at least equal to its
obligation under the agreement.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $5,473,000 or .5%
of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated by multiplying the sum of two components, a group
fee rate plus a fixed individual fund fee rate, applied to the average net
assets of the fund and adding an income-based fee. The group fee rate is
the weighted average of a series of rates and is based on the monthly
average net assets of all the mutual funds advised by FMR. The rates ranged
from .1100% to .3700% for the period. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same or a
lower management fee. The individual fund fee rate is .03%. The
income-based fee is added only when the fund's gross yield exceeds 5%. At
that time the income-based fee would equal 6% of that portion of the fund's
gross income that represents a gross yield of more than 5% per year. The
maximum income-based component is 0.24% (annualized)of average net assets.
For the period, the management fee was equivalent to an annualized rate of
0.21% of average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annualized rate of
0.27% of average net assets.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
4. EXPENSE REDUCTIONS.
The fund has entered into arrangements with its custodian and transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of the fund's expenses. During the period, the fund's
custodian and transfer agent fees were reduced by $500 and $44,000,
respectively, under these arrangements.

TO CALL FIDELITY

FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.

(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

TO WRITE FIDELITY

If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

Page 23 = BLANK
Do NOT strip-in this type

INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
(registered trademark)
INVESTMENT SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Leland Barron, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Bank of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan(registered trademark) Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

FIDELITY

(registered trademark)
CASH RESERVES

SEMIANNUAL REPORT
MAY 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 9 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 26 Notes to the financial statements.

REPORT OF INDEPENDENT
ACCOUNTANTS 28 The auditors' opinion.

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of
its dividends (or income). Yield measures the income paid by a fund. Since
a money market fund tries to maintain
a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1996 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS

Fidelity Cash Reserves 2.57% 5.41% 23.61% 76.13%

All Taxable Money Market Funds Average 2.48% 5.22% 22.10% 72.27%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or ten
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the all taxable money market funds average, which reflects
the performance of 796 money market funds with similar objectives tracked
by IBC Financial Data, Inc. over the past six months.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Cash Reserves 5.41% 4.33% 5.82%

All Taxable Money Market Funds Average 5.22% 4.07% 5.58%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
5/30/95 8/29/95 11/28/95 2/27/96 5/28/96

5.62% 5.46% 5.28% 5.04% 4.96%
Fidelity Cash Reserves

All Taxable Money 5.51% 5.25% 5.26% 4.78% 4.74%
Market Funds Average

5/31/95 8/30/95 11/29/95 2/28/96 5/29/96

2.89% 2.84% 2.86% 2.76% 2.66%
MMDA

Row: 1, Col: 1, Value: 5.619999999999999
Row: 1, Col: 2, Value: 5.51
Row: 1, Col: 3, Value: 2.89
Row: 2, Col: 1, Value: 5.46
Row: 2, Col: 2, Value: 5.25
Row: 2, Col: 3, Value: 2.84
Row: 3, Col: 1, Value: 5.28
Row: 3, Col: 2, Value: 5.26
Row: 3, Col: 3, Value: 2.86
Row: 4, Col: 1, Value: 5.04
Row: 4, Col: 2, Value: 4.78
Row: 4, Col: 3, Value: 2.76
Row: 5, Col: 1, Value: 4.95
Row: 5, Col: 2, Value: 4.74
Row: 5, Col: 3, Value: 2.66
6% -
5% -
4% -
3% -
2% -
1% -
0%
Fidelity Cash
Reserves
All Taxable
Money Market
Funds Average
MMDA
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the all taxable money market funds average and the
bank money market deposit account average (MMDA). Figures for the all
taxable money market funds average are from the IBC Financial Data, Inc.
The MMDA average is supplied by BANK RATE MONITOR.(Trademark)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit account
(MMDA) and a money market
fund. First, the U.S.
Government neither insures
nor guarantees a money
market fund. In fact, there is
no assurance that a money
fund will maintain a $1 share
price. Second, a money
market fund returns to its
shareholders income earned
by the fund's investments
after expenses. This is in
contrast to banks, which set
their MMDA rates periodically
based on current interest
rates, competitors' rates, and
internal criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Bob Litterst, Portfolio Manager of Fidelity Cash Reserves
Q. BOB, HOW HAS THE INVESTMENT CLIMATE CHANGED DURING THE PAST SIX MONTHS?
A. It has changed dramatically. Six months ago, the economy was growing
slowly, inflationary pressures were mild and Congress and the White House
appeared headed toward a balanced budget agreement. In December 1995 and
again in January 1996, the Federal Reserve lowered the rate banks charge
each other for overnight loans - known as the federal funds rate -
one-quarter percentage point, to 5.25%. By then, market participants were
so optimistic about the prospect of further rate cuts that the money-market
yield curve was inverted; that is, rates fell rather than rose at longer
maturities.
Q. WHEN DID THE INVESTMENT CLIMATE SHIFT, AND WHY?
A. The first indication was Fed Chairman Alan Greenspan's February
testimony before Congress, which suggested that market expectations of
further rate cuts were excessive. Then the February employment report came
in well above most analysts' predictions. Because monthly numbers are
volatile and therefore not always reliable indicators, I often look to
three-month moving averages to identify trends. On that basis, the
labor-market was clearly tighter during the first quarter of 1996.
First-quarter growth in the gross domestic product, reported in early May,
came in stronger than expected, led by consumption and business investment.
Finally, increases in commodity prices and a modest uptick in wages led
some analysts to conclude that inflationary pressures were building. While
the Fed has remained on the sidelines so far, market sentiment has shifted
dramatically, pushing short-term interest rates well above earlier levels.
Q. HOW DID YOU RESPOND TO CHANGING CONDITIONS?
A. When the period began, the fund's average maturity was 71 days,
reflecting my belief at the time that rates were continuing on their way
down. As market sentiment has shifted, I've shortened the fund's average
maturity, though not as much as you might expect. Typically during periods
of volatility, the market overreacts, creating buying opportunities. That's
why in recent months I've occasionally added securities with maturities
between six and twelve months, rather than focus solely on very short
maturities. At the end of May, the fund's average maturity was 62 days.
Q. HOW DID THE FUND PERFORM?
A. On May 31, 1996, the fund's seven-day yield was 4.95%, compared to 5.28%
six months ago. The fund's total return for the six-month period was 2.57%.
That beat the average total return during the same period of 2.48% for the
all taxable money market funds average, according to IBC Financial Data,
Inc.
Q. WHAT'S THE OUTLOOK?
A. While nothing's ever crystal clear, the consensus as we head into the
summer months is that the economy is on solid footing. The question we're
all facing is whether the current pace of activity is sustainable. On the
positive side, labor market conditions are improving, consumer confidence
is high, interest-rate sensitive sectors of the economy are showing
impressive resilience and inventories are being cut to manageable levels.
All that suggests continued strong growth in the economy. On the other
hand, the eventual impact of higher long-term rates and the financial
health of the consumer pose definite risks. While there appears to be
almost no chance the Fed will lower rates again anytime soon, the timing of
the next Fed rate increase is less certain. For the time being, I'm content
to stay between 55 and 65 days. But if conditions point to aggressive Fed
action, I'd consider shortening the fund's average maturity by another 10
days.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: income and a stable $1
share price by investing in high
quality, short-term money
market securities of all types
START DATE: May 10, 1979
SIZE: as of May 31, 1996,
more than $18.7 billion
MANAGER: Robert Litterst,
since 1992; manager, Capital
Reserves Money Market,
Variable Insured Products:
Money Market Portfolio, and
Fidelity Money Market Trust:
Retirement Money Market,
since 1992; joined Fidelity in
1992
(checkmark)

WORDS TO KNOW
BANKERS' ACCEPTANCE (BA): A
short-term note whose
payment is guaranteed by a
bank.
CERTIFICATE OF DEPOSIT (CD): An
interest-bearing deposit with a
specific maturity. Large
denomination CDs, like those
the fund buys, have negotiable
interest rates and can be sold
in the secondary market.
COMMERCIAL PAPER: A
short-term note from a bank or
corporation.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity,
weighted by dollar amount, is
short, the fund manager is
expecting rates to rise. When
the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
When the average maturity is
long, the manager is
expecting interest rates to fall.
TIME DEPOSIT (TD): An
interest-bearing deposit with a
specific maturity. Large
denomination TDs, like those
the fund buys, differ from CDs
in that they can't be sold in the
secondary market.
INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/96 11/30/95 5/31/95

0 - 30 41 42 44

31 - 90 41 25 31

91 - 180 12 27 24

181 - 397 6 6 1

WEIGHTED AVERAGE MATURITY
5/31/96 11/30/95 5/31/95

Fidelity Cash Reserves 62 days 71 days 59 days

All Taxable Money
Market Funds Average* 52 days 54 days 49 days

ASSET ALLOCATION
AS OF MAY 31, 1996 AS OF NOVEMBER 30, 1995

Row: 1, Col: 1, Value: 49.0
Row: 1, Col: 2, Value: 34.0
Row: 1, Col: 3, Value: 17.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 1, Value: 45.0
Row: 1, Col: 2, Value: 45.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 6.0
Bank CDs, BAs,
TDs, and notes 49%
Commercial
paper 34%
Government
securities 17%
Other 0%
Bank CDs, BAs,
TDs, and notes 45%
Commercial
paper 45%
Government
securities 4%
Other 6%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS MAY 31, 1996

Showing Percentage of Total Value of Investments

CERTIFICATES OF DEPOSIT - 28.0%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
DOMESTIC CERTIFICATES OF DEPOSIT - 0.9%
Bank of New York
4/29/97 5.80% $ 59,000 $ 59,000
Chase Manhattan Bank (USA)
7/24/96 5.20 70,000 70,000
First Tennessee Bank, N.A. Memphis
6/20/96 5.35 50,000 50,000
179,000
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 1.6%
ABN-AMRO Bank
6/20/96 5.06 65,000 65,000
7/22/96 5.02 140,000 140,000
12/2/96 5.51 100,000 100,000
305,000
PORTLAND BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 1.1%
Bank of Nova Scotia
8/3/96 5.55 (a) 75,000 75,000
8/6/96 5.00 35,000 35,000
8/28/96 5.11 100,000 99,993
209,993
SAN FRANCISCO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.3%
Banque Nationale de Paris
8/28/96 5.12 25,000 24,999
8/30/96 5.11 35,000 34,995
59,994
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 15.9%
Australia & New Zealand Banking
7/26/96 5.20 50,000 50,004
7/29/96 5.20 25,000 25,000
Banque Nationale de Paris
6/5/96 5.19 25,000 25,000
6/10/96 5.40 80,000 80,000
7/10/96 5.36 50,000 50,000
8/29/96 5.11 28,000 28,000
Bayerische Landesbank Girozentrale
7/24/96 5.22 53,000 53,000
7/25/96 5.22 43,000 43,001
7/30/96 5.60 (a) 125,000 125,000
4/22/97 5.85 (a) 125,000 125,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Bayerische Vereinsbank A.G.
7/16/96 5.32% $ 40,000 $ 40,000
7/17/96 5.32 50,000 50,000
Canadian Imperial Bank of Commerce
6/4/96 5.19 40,000 40,000
Commerzbank, Germany
6/4/96 5.17 20,000 20,000
7/8/96 5.35 90,000 90,000
9/3/96 5.18 100,000 100,000
Credit Suisse
7/30/96 5.19 30,000 30,000
Deutsche Bank, Germany
8/1/96 5.19 320,000 320,000
10/9/96 5.45 100,000 100,000
12/23/96 5.52 40,000 40,000
Hong Kong Shanghai Banking Corp.
6/17/96 5.34 100,000 99,999
Landesbank Hessen - Thuringen
8/5/96 5.00 50,000 50,001
8/19/96 5.00 70,000 69,999
Lloyds Bank, PLC
7/29/96 5.20 50,000 49,999
National Westminster Bank, PLC
6/24/96 5.35 100,000 100,000
7/22/96 5.34 140,000 140,000
Royal Bank of Canada
8/23/96 5.11 15,000 14,998
Societe Generale
6/11/96 5.36 50,000 50,000
7/9/96 5.37 200,000 200,000
7/10/96 5.37 100,000 100,000
9/3/96 5.13 205,000 205,000
12/2/96 5.52 150,000 150,000
Swiss Bank Corp.
6/3/96 5.40 100,000 100,000
7/29/96 5.20 100,000 100,000
8/7/96 5.16 50,000 49,985
8/8/96 5.16 15,000 14,995
Westdeutsche Landesbank
7/24/96 5.23 45,000 45,000
8/26/96 5.08 90,000 90,000
3,063,981
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
LONDON BRANCH, EURODOLLAR DOLLAR, DOMESTIC BANKS - 1.4%
Bank of America National Trust & Savings Assoc.
6/20/96 5.05% $ 100,000 $ 100,000
7/16/96 5.02 88,000 88,000
Morgan Guaranty Trust Co.
7/15/96 5.33 75,000 75,002
263,002
LONDON BRANCH, EURODOLLAR DOLLAR, FOREIGN BANKS - 6.8%
Abbey National, Treasury Services
11/13/96 5.52 75,000 75,000
12/3/96 5.52 305,000 305,000
Banque Nationale de Paris
8/30/96 5.14 20,000 20,001
Bayerische Hypotheken-und Weschel
9/9/96 5.15 100,000 100,003
9/17/96 5.40 40,000 39,998
10/17/96 5.44 50,000 50,002
10/29/96 5.48 50,000 49,995
Bayerische Landesbank Girozentrale
7/25/96 5.23 50,000 50,001
7/29/96 5.18 25,000 25,000
Bayerische Vereinsbank A.G.
8/14/96 5.00 50,000 50,000
10/15/96 5.45 50,000 50,005
Commerzbank, Germany
6/4/96 5.16 50,000 50,000
6/27/96 5.25 50,000 50,000
8/23/96 5.05 50,000 50,008
8/26/96 5.05 100,000 100,000
Commonwealth Bank of Australia
8/30/96 5.19 20,000 19,997
Deutsche Bank, Germany
8/27/96 5.05 50,000 50,001
9/4/96 5.38 40,000 40,000
National Westminster Bank, PLC
6/3/96 5.15 35,000 35,000
7/10/96 5.18 25,000 25,000
Norddeutsche Landesbank
7/8/96 5.03 20,000 19,999
Rabobank Nederland, N.V.
12/4/96 5.53 25,000 25,001
Societe Generale
9/13/96 5.40 25,000 24,999
1,305,010
TOTAL CERTIFICATES OF DEPOSIT 5,385,980
COMMERCIAL PAPER - 34.1%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
ABN-AMRO North America Finance, Inc.
8/23/96 5.10% $ 84,500 $ 83,531
8/26/96 5.10 14,000 13,834
8/28/96 5.13 52,000 51,364
11/8/96 5.55 180,000 175,680
A.H. Robins Company, Incorporated
6/5/96 5.35 25,893 25,878
6/20/96 5.43 15,000 14,957
AT&T Capital Corp.
7/8/96 5.38 10,000 9,945
AVCO Financial Services, Inc.
8/5/96 5.39 13,000 12,875
Abbey National, North America
6/17/96 5.17 40,000 39,909
American Brands, Inc.
6/13/96 5.34 20,000 19,965
8/5/96 5.35 25,000 24,761
American Express Credit Corp.
6/27/96 5.21 25,000 24,908
7/1/96 5.31 50,000 49,780
7/22/96 5.23 24,000 23,827
8/2/96 5.17 40,000 39,651
8/12/96 5.00 15,000 14,854
8/23/96 5.10 35,000 34,599
American Home Food Products, Inc.
6/6/96 5.35 25,335 25,316
6/10/96 5.38 27,400 27,363
7/10/96 5.41 8,000 7,954
American Home Products
6/5/96 5.35 13,550 13,542
6/6/96 5.42 20,000 19,985
6/10/96 5.38 2,500 2,497
6/13/96 5.40 30,000 29,946
7/15/96 5.41 18,000 17,882
7/17/96 5.41 15,000 14,897
7/18/96 5.41 22,000 21,846
Asset Securitization Cooperative Corporation
6/26/96 5.34 53,000 52,805
7/18/96 5.35 50,000 49,654
7/22/96 5.35 20,000 19,850
Associates Corp. of North America
6/24/96 5.37 35,000 34,881
6/25/96 5.37 40,000 39,859
6/26/96 5.37 35,000 34,871
6/27/96 5.36 30,000 29,885
7/24/96 5.36 55,000 54,571
7/29/96 5.38 30,000 29,743
8/22/96 5.37 40,000 39,517
B.B.V. Finance (Delaware), Inc.
8/7/96 5.40 50,000 49,504
BHF Finance (Delaware), Inc.
7/2/96 5.37 50,000 49,771
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Barclays U.S. Funding Corp.
6/24/96 5.34% $ 100,000 $ 99,661
Bear Stearns Cos., Inc.
6/4/96 5.21 50,000 49,979
6/7/96 5.35 36,000 35,968
6/26/96 5.37 18,000 17,934
6/27/96 5.37 40,000 39,847
Beneficial Corp.
8/19/96 5.37 36,000 35,581
Bradford & Bingley Building Society
6/6/96 5.19 25,000 24,982
6/10/96 5.40 35,000 34,953
CIESCO, L.P.
7/19/96 5.35 20,000 19,859
CIT Group Holdings, Inc.
6/11/96 5.40 36,000 35,946
8/12/96 5.38 40,000 39,575
Caisse des Depots et Consignations
6/20/96 5.37 65,000 64,818
Cheltenham & Gloucester Building Society
9/9/96 5.45 25,000 24,628
Chrysler Financial Corporation
6/10/96 5.50 40,000 39,945
6/14/96 5.43 30,000 29,941
6/17/96 5.43 36,000 35,914
6/26/96 5.45 30,000 29,887
6/27/96 5.45 42,000 41,836
7/11/96 5.45 30,000 29,820
7/29/96 5.45 40,000 39,652
Citibank Credit Card Master Trust I (Dakota Certificate Program)
6/6/96 5.20 25,000 24,982
6/7/96 5.42 23,000 22,979
6/12/96 5.35 25,000 24,959
7/25/96 5.36 22,000 21,825
8/2/96 5.40 10,000 9,908
8/12/96 5.40 15,000 14,840
Commerzbank U.S. Finance, Inc.
7/22/96 5.35 60,000 59,549
Compagnie Bancaire
6/3/96 5.19 50,000 49,986
CoreStates Capital Corp. (a)
6/3/96 5.42 25,000 25,000
6/7/96 5.41 15,000 15,000
Eiger Capital Corp.
6/6/96 5.39 25,000 24,981
6/20/96 5.34 25,000 24,930
Electronic Data Systems Corp.
6/7/96 5.20 50,000 49,957
Enterprise Funding Corp.
6/10/96 5.36 20,000 19,973
6/13/96 5.36 10,000 9,982
6/18/96 5.35 10,000 9,975
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Enterprise Funding Corp. - continued
6/20/96 5.37% $ 15,000 $ 14,958
7/10/96 5.40 10,708 10,646
7/18/96 5.34 14,040 13,943
7/22/96 5.37 10,000 9,925
8/7/96 5.42 10,000 9,901
8/15/96 5.40 5,000 4,945
8/26/96 5.38 39,444 38,945
Ford Motor Credit Corp.
6/3/96 5.27 50,000 49,986
6/3/96 5.28 50,000 49,986
6/5/96 5.33 70,000 69,959
6/17/96 5.32 23,000 22,946
7/8/96 5.35 211,000 209,851
7/23/96 5.34 100,000 99,234
GTE Corp.
6/14/96 5.41 15,000 14,971
6/14/96 5.44 10,000 9,980
General Electric Capital Corp.
8/13/96 5.39 50,000 49,463
8/14/96 5.39 164,000 162,213
9/24/96 5.12 100,000 98,409
9/30/96 5.40 100,000 98,222
10/21/96 5.44 180,000 176,230
General Motors Acceptance Corp.
6/3/96 5.25 100,000 99,971
6/5/96 5.25 100,000 99,942
6/12/96 5.15 70,000 69,892
6/19/96 5.40 113,000 112,698
7/22/96 5.42 85,000 84,353
8/19/96 5.43 73,000 72,141
Generale Bank
6/26/96 5.49 50,000 49,815
6/28/96 5.48 25,000 24,900
Goldman Sachs Group, L.P. (The)
8/19/96 5.40 100,000 98,837
8/22/96 5.40 90,000 88,914
Government of Canada
9/5/96 5.15 100,000 98,661
9/6/96 5.15 125,000 123,309
Household Finance Corp.
6/6/96 5.40 22,000 21,984
8/9/96 5.37 20,000 19,797
IBM Corp.
6/13/96 5.34 10,100 10,082
IBM Credit Corp.
6/25/96 5.33 15,000 14,947
Merrill Lynch & Co., Inc.
6/27/96 5.33 50,000 49,810
7/12/96 5.40 50,000 49,696
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Morgan Stanley Group, Inc.
6/3/96 5.38% $ 20,000 $ 19,994
6/6/96 5.20 75,000 74,947
6/26/96 5.38 37,000 36,864
7/15/96 5.35 75,000 74,514
7/17/96 5.35 85,000 84,424
8/26/96 5.37 20,000 19,747
National Australia Funding, Inc.
9/3/96 5.13 75,000 74,021
Nationwide Building Society
6/5/96 5.18 25,000 24,986
6/6/96 5.19 25,000 24,982
6/12/96 5.39 22,000 21,964
6/20/96 5.32 25,000 24,930
7/12/96 5.42 44,000 43,732
8/7/96 5.40 30,000 29,702
8/13/96 5.38 20,000 19,785
New Center Asset Trust
6/7/96 5.40 95,000 94,915
6/21/96 5.38 26,000 25,923
7/23/96 5.37 59,000 58,548
7/29/96 5.37 32,000 31,727
8/5/96 5.40 39,000 38,625
8/12/96 5.43 9,000 8,904
9/27/96 5.43 83,000 81,561
9/30/96 5.43 14,000 13,751
Norfolk Southern Corp.
7/9/96 5.38 27,000 26,849
PHH Corp. (a)
6/21/96 5.38 47,000 46,996
Preferred Receivables Funding Corp.
6/12/96 5.40 20,000 19,967
REXAM PLC
6/6/96 5.38 15,000 14,989
Sears Roebuck Acceptance Corp.
6/3/96 5.40 21,000 20,994
6/7/96 5.36 25,000 24,978
6/24/96 5.43 18,000 17,938
6/25/96 5.36 15,000 14,947
6/26/96 5.37 25,000 24,907
6/26/96 5.43 18,000 17,933
7/30/96 5.35 50,000 49,566
Sherwood Medical Company
6/6/96 5.36 21,000 20,984
6/7/96 5.35 15,000 14,987
6/18/96 5.40 25,300 25,236
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Societe Generale North America, Inc.
7/24/96 5.22% $ 23,000 $ 22,828
Textron, Inc.
6/3/96 5.51 6,000 5,998
6/10/96 5.50 5,000 4,993
6/11/96 5.49 10,000 9,985
6/13/96 5.51 12,000 11,978
Toronto Dominion Holdings USA, Inc.
10/10/96 5.46 95,500 93,655
U.S.L. Capital, Inc.
6/13/96 5.35 13,000 12,977
6/14/96 5.34 20,000 19,962
6/18/96 5.35 21,000 20,947
7/2/96 5.33 15,000 14,932
Westpac Capital Corp.
10/7/96 5.53 50,000 49,044
11/4/96 5.45 25,000 24,426
Woolwich Equitable Building Society
6/7/96 5.20 50,000 49,957
7/12/96 5.42 25,000 24,848
TOTAL COMMERCIAL PAPER 6,546,818
FEDERAL AGENCIES - 15.7%

FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 1.8%
6/13/96 5.26 100,000 99,966
6/20/96 5.32 100,000 99,965
6/20/96 5.33 25,000 24,992
7/2/96 5.35 120,000 119,964
344,887
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 0.2%
8/7/96 5.32 43,000 42,580
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 1.1%
8/7/96 5.32 50,000 49,511
8/12/96 5.32 96,500 95,487
8/12/96 5.33 65,000 64,316
209,314
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 10.4%
6/3/96 5.34% (a) $ 125,000 $ 125,830
6/3/96 5.38 (a) 250,000 249,790
6/3/96 5.57 (a) 160,000 160,000
6/15/96 5.44 (a) 250,000 249,767
6/16/96 5.34 (a) 25,000 24,997
6/20/96 5.32 (a) 300,000 299,872
6/20/96 5.35 (a) 60,000 59,949
6/29/96 5.37 (a) 125,000 124,862
7/5/96 5.57 (a) 100,000 99,972
7/17/96 5.46 (a) 149,000 148,927
8/1/96 5.39 (a) 210,000 209,847
5/28/97 6.00 240,000 240,000
1,993,813
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 1.7%
8/6/96 5.32 50,000 49,519
8/8/96 5.32 100,000 99,008
8/9/96 5.32 185,000 183,138
331,665
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 0.5%
7/16/96 5.50 100,000 100,000
TOTAL FEDERAL AGENCIES 3,022,259
U.S. TREASURY OBLIGATIONS - 1.0%
U.S. TREASURY BILLS
5/29/97 5.72 200,000 189,130
BANK NOTES - 9.0%

Bank of America National Trust & Savings Assoc. (a)
6/3/96 5.40 105,000 104,984
Bank of New York
8/27/96 5.08 50,000 50,000
9/3/96 5.16 35,000 35,000
9/4/96 5.16 50,000 50,000
Bank of New York - Delaware (a)
7/30/96 5.64 65,000 65,000
Bank One, Milwaukee (a)
6/3/96 5.49 125,000 124,920
BANK NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Boatmen's First National Bank of Kansas City (a)
6/12/96 5.44% $ 25,000 $ 25,000
Boatmen's National Bank of St. Louis (a)
6/12/96 5.44 25,000 25,000
Comerica Bank-Detroit (a)
6/1/96 5.22 120,000 119,977
7/27/96 5.54 74,000 73,985
Comerica Bank-Illinois (a)
7/2/96 5.47 25,000 24,992
First Union National Bank of North Carolina, N.A.
6/27/96 5.39 (a) 100,000 99,972
8/20/96 5.37 90,000 90,000
Household Bank FSB
7/19/96 5.39 30,000 30,000
8/14/96 5.39 10,000 10,000
Huntington National Bank (a)
7/30/96 5.59 50,000 50,000
Morgan Bank (Delaware)
8/7/96 5.94 50,000 49,983
NationsBank of Texas
6/3/96 5.18 36,000 36,000
10/17/96 5.78 150,000 149,957
NBD Bank, N.A. (Michigan)
6/24/96 5.25 67,000 67,000
PNC Bank, N.A. (a)
6/10/96 5.44 105,000 104,923
6/20/96 5.43 108,000 107,971
Seattle First National Bank (a)
6/4/96 5.43 35,000 34,979
Society National Bank, Cleveland (a)
6/3/96 5.50 90,000 89,909
Wachovia Bank of North Carolina, N.A. (a)
6/26/96 5.39 115,000 114,973
TOTAL BANK NOTES 1,734,525
MASTER NOTES (A) - 2.2%

Goldman Sachs Group, L.P. (The)
8/14/96 5.43 100,000 100,000
J.P. Morgan Securities
6/17/96 5.42 13,000 13,000
6/20/96 5.43 172,000 172,000
Norwest Corp.
6/3/96 5.41 131,000 131,000
TOTAL MASTER NOTES 416,000
MEDIUM-TERM NOTES - 6.1%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Abbey National, Treasury Services (a)(c)
6/9/96 5.44% $ 226,000 $ 226,000
Associates Corp. of North America
10/15/96 5.10 23,150 23,330
Beneficial Corp. (a)
6/5/96 5.29 40,000 39,985
6/27/96 5.41 40,000 39,994
7/19/96 5.47 27,000 26,993
8/3/96 5.46 33,000 32,990
Bank of Scotland Treasury Services (a)
8/7/96 5.48 250,000 250,000
CIT Group Holdings, Inc. (a)
6/3/96 5.40 65,000 64,982
Commonwealth Life Insurance Co. (a)
6/3/96 5.61 50,000 50,000
General Electric Capital Corp.
7/24/96 5.01 20,000 20,067
General Motors Acceptance Corp. (a)
7/5/96 5.34 38,000 38,010
7/28/96 5.55 45,000 45,087
8/1/96 5.48 100,000 100,000
Norwest Corp. (a)
6/10/96 5.40 114,000 114,000
PHH Corp. (a)
6/3/96 5.39 25,000 24,998
Transamerica Life Insurance and Annuity Co. (a)
6/3/96 (b) 5.47 20,000 20,000
6/15/96 5.45 65,000 65,000
TOTAL MEDIUM-TERM NOTES 1,181,436
SHORT-TERM NOTES (A) - 3.9%

CSA Funding - A
6/7/96 5.42 22,000 22,000
CSA Funding - B
6/7/96 5.42 22,000 22,000
CSA Funding - C
6/7/96 5.42 6,000 6,000
Capital One Funding Corp. (1996-D)
6/7/96 5.37 25,914 25,914
Liquid Asset Backed Securities Trust (1996-1) (c)
6/15/96 5.46 91,000 91,000
SMM Trust (1995-B) (c)
6/3/96 5.49 34,000 34,000
SHORT-TERM NOTES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
SMM Trust (1995-D) (c)
7/27/96 5.54% $ 61,800 $ 61,800
SMM Trust (1996-I) (c)
6/28/96 5.48 102,000 102,000
SMM Trust (1995-N) (c)
8/8/96 5.53 40,000 40,000
SMM Trust (1995-P) (c)
6/15/96 5.43 89,250 89,250
SMM Trust (1996-V) (c)
6/26/96 5.49 255,000 255,000
TOTAL SHORT-TERM NOTES 748,964
REPURCHASE AGREEMENTS - 0.0%
MATURITY AMOUNT
(000S)
In a joint trading account
(U.S. Government Obligations)
dated 5/31/96 due 6/3/96:
At 5.39% $ 2,306 2,305
TOTAL INVESTMENTS - 100% $ 19,227,417
Total Cost for Income Tax Purposes $ 19,227,417

LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION
ACQUISITION COST
SECURITY DATE (000S)
Transamerica Life
Insurance and
Annuity Co. 5/8/96 $ 20,000

(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $899,050,000 or 4.79% of net
assets.
INCOME TAX INFORMATION
At November 30, 1995 the fund had a capital loss carryforward of
approximately $2,144,000 of which $510,000 and $1,634,000 will expire on
November 30, 2001 and 2002, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) MAY 31, 1996

5.ASSETS 6. 7.

8.Investment in securities, at value (including 9. $ 19,227,417
repurchase agreements of $2,305) - See
accompanying
schedule

10.Interest receivable 11. 113,854

12. 13.TOTAL ASSETS 14. 19,341,271

15.LIABILITIES 16. 17.

18.Payable for investments purchased $ 560,001 19.

20.Share transactions in process 2,604 21.

22.Accrued management fee 3,167 23.

24.Other payables and accrued expenses 6,162 25.

26. 27.TOTAL LIABILITIES 28. 571,934

29.30.NET ASSETS 31. $ 18,769,337

32.Net Assets consist of: 33. 34.

35.Paid in capital 36. $ 18,770,464

37.Accumulated net realized gain (loss) on investments 38. (1,127)

39.40.NET ASSETS, for 18,770,464 shares outstanding 41. $ 18,769,337

42.43.NET ASSET VALUE, offering price and redemption 44. $1.00
price per share ($18,769,337 (divided by) 18,770,464 shares)

</TABLE>

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1996

45.46.INTEREST INCOME 47. $ 514,982

48.EXPENSES 49. 50.

51.Management fee $ 19,541 52.

53.Transfer agent fees 25,365 54.

55.Accounting fees and expenses 400 56.

57.Non-interested trustees' compensation 46 58.

59.Custodian fees and expenses 159 60.

61.Registration fees 844 62.

63.Audit 102 64.

65.Legal 57 66.

67.Reports to shareholders 3 68.

69.Miscellaneous 104 70.

71. Total expenses before reductions 46,621 72.

73. Expense reductions (248) 46,373

74.75.NET INTEREST INCOME 76. 468,609

77.78.NET REALIZED GAIN (LOSS) ON INVESTMENTS 79. (212)

80.81.NET INCREASE IN NET ASSETS RESULTING FROM 82. $ 468,397
OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR
ENDED ENDED
MAY 31, 1996 NOVEMBER 30, 1995

83.INCREASE (DECREASE) IN NET ASSETS

84.Operations $ 468,609 $ 916,152
Net interest income

85. Net realized gain (loss) (212) 686

86. 87.NET INCREASE (DECREASE) IN NET ASSETS 468,397 916,838
RESULTING FROM OPERATIONS

88.Distributions to shareholders from net interest (468,609) (916,152)
income

89.Share transactions at net asset value of $1.00 per 17,046,685 31,772,441
share
Proceeds from sales of shares

90. Reinvestment of distributions from net interest 454,092 891,871
income

91. Cost of shares redeemed (17,163,011) (28,761,771)

92.93. 337,766 3,902,541
NET INCREASE (DECREASE) IN NET ASSETS AND
SHARES RESULTING FROM SHARE TRANSACTIONS

94. 95.TOTAL INCREASE (DECREASE) IN NET ASSETS 337,554 3,903,227

96.NET ASSETS 97. 98.

99. Beginning of period 18,431,783 14,528,556

100. End of period $ 18,769,337 $ 18,431,783

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31,

1996 1995 1994 1993 1992 1991

101.SELECTED PER-SHARE
DATA

102.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period

103.Income .025 .055 .037 .029 .038 .061
from
Investment
Operations
Net interest
income

104.Less (.025) (.055) (.037) (.029) (.038) (.061)
Distributions
From net
interest
income

105.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, end of
period

106.TOTAL 2.57% 5.67 3.74 2.97 3.90 6.23
RETURN B % % % % %

107.RATIOS AND
SUPPLEMENTAL DATA

108.Net assets, $ 18,769 $ 18,432 $ 14,529 $ 10,314 $ 10,040 $ 10,519
end of period
(in millions)

109.Ratio of .51%A .55 .52 .48 .48 .58
expenses to % % % % %
average net
assets

110.Ratio of .50%A .55 .52 .48 .48 .58
expenses to ,C % % % % %
average net
assets after
expense
reductions

111.Ratio of net 5.09%A 5.50 3.76 2.92 3.86 6.03
interest % % % % %
income to
average net
assets

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Cash Reserves (the fund) is a fund of Fidelity Phillips Street
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Delaware business trust. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
2. OPERATING POLICIES -
CONTINUED
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $20,000,000 or
.1% of the fund's net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated by multiplying the sum of two components, a group
fee rate plus a fixed individual fund fee rate applied to the average net
assets of the fund and adding an income-based fee. The group fee rate is
the weighted average of a series of rates and is based on the monthly
average net assets of all the mutual funds advised by FMR. The rates ranged
from .1100% to .3700% for the period. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same or a
lower management fee. The annual individual fund fee rate is 0.03%. The
income based fee is only added when the fund's gross yield exceeds 5%. At
that time the income-based fee would equal 6% of that portion of the fund's
gross income that represents a gross yield of more than 5% per year. The
maximum income-based component is .24% (annualized) of average net assets.
For the period, the management fee was equivalent to an annualized rate of
0.21% of the fund's average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annualized rate of
.28% of the fund's average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
4. EXPENSE REDUCTIONS.
The fund has entered into arrangements with its custodian and transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of the fund's expenses. During the period, the fund's
custodian and transfer agent fees were reduced by $8,000 and $240,000,
respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Phillips Street Trust and the Shareholders of
Fidelity Cash Reserves:
We have audited the accompanying statement of assets and liabilities of
Fidelity Phillips Street Trust: Fidelity Cash Reserves, including the
schedule of portfolio investments, as of May 31, 1996, and the related
statement of operations for the six months then ended, the statements of
changes in net assets for the six months then ended and for the year ended
November 30, 1995, and the financial highlights for the six months ended
May 31, 1996 and for each of the five years in the period ended November
30, 1995. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Phillips Street Trust: Fidelity Cash Reserves as of May 31,
1996, the results of its operations for the six months then ended, the
changes in its net assets for the six months then ended and for the year
ended November 30, 1995, and the financial highlights for the six months
ended May 31, 1996 and for each of the five years in the period ended
November 30, 1995, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
June 25, 1996
TO CALL FIDELITY

INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Robert Litterst, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan(registered trademark) Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE