FIDELITY PHILLIPS STREET TRUST, N-30D, 1997-01-08

FIDELITY PHILLIPS STREET TRUST
N-30D, 1997-01-08

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FIDELITY

(registered trademark)
CASH RESERVES

ANNUAL REPORT
NOVEMBER 30, 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 28 The auditor's opinion.
ACCOUNTANTS

To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.

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

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 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 NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Cash Reserves 5.18% 23.35% 75.37%

All Taxable Money Market Funds Average 4.97% 21.82% 72.08%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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
815 money market funds with similar objectives tracked by IBC Financial
Data, Inc. over the past 12 months.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Cash Reserves 5.18% 4.29% 5.78%

All Taxable Money Market Funds Average 4.97% 4.02% 5.57%

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
11/28/95 2/27/96 5/28/96 9/3/96 12/03/96

5.28% 5.04% 4.96% 4.96% 5.00%
Fidelity Cash Reserves

All Taxable Money 5.26% 4.78% 4.74% 4.83% 4.88%
Market Funds Average

11/29/95 2/28/96 5/29/96 8/28/96 12/4/96

2.86% 2.76% 2.66% 2.68% 2.63%
MMDA

Row: 1, Col: 1, Value: 5.28
Row: 1, Col: 2, Value: 5.26
Row: 1, Col: 3, Value: 2.86
Row: 2, Col: 1, Value: 5.04
Row: 2, Col: 2, Value: 4.78
Row: 2, Col: 3, Value: 2.76
Row: 3, Col: 1, Value: 4.96
Row: 3, Col: 2, Value: 4.74
Row: 3, Col: 3, Value: 2.66
Row: 4, Col: 1, Value: 4.96
Row: 4, Col: 2, Value: 4.83
Row: 4, Col: 3, Value: 2.68
Row: 5, Col: 1, Value: 5.0
Row: 5, Col: 2, Value: 4.88
Row: 5, Col: 3, Value: 2.63
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 (MMDA) average. Figures for the all
taxable money market funds average are from 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, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST YEAR?
A. It has gone through some interesting changes. At the beginning of the
period, the economy was growing slowly, inflationary pressures were mild
and it seemed a balanced budget agreement was in the offing. The Federal
Reserve Board reduced short-term rates in December and again in January,
and market participants were optimistic that additional rate cuts would
occur in the months ahead. But things changed dramatically, beginning with
Fed Chairman Alan Greenspan's Congressional testimony in February
suggesting that market expectations of further rate cuts were excessive.
February's employment report then came in well above most analysts'
predictions, depicting a much stronger labor market than previously
thought. Stronger economic signals caused participants to revise their
expectations regarding monetary policy, and short-term rates rose.
Ultimately, the economy grew at a 4.7% annual rate in the second quarter,
well above a non-inflationary pace. As a result, short-term interest rates
rose higher through the second quarter and into the summer.
Q. BUT THE FED DIDN'T RAISE RATES...
A. That's right, for two reasons. First, the key inflation indices were
well behaved. Rising wages didn't get translated into higher prices. And
second, the Fed anticipated a slowdown in economic activity in the second
half of the year. The Fed did adopt a tightening bias in July and
maintained that bias throughout the third quarter. Recently, the market
breathed a sigh of relief as the Fed's projections turned out to be
correct. Job growth has decelerated, third quarter gross domestic product
(GDP) slowed sharply and inflation numbers were reassuring. With the
economy slowing, what had been a potentially troubling environment
downshifted into one that is much more favorable, if not ideal.
Q. WHAT HAS YOUR STRATEGY BEEN THROUGH THIS FLUCTUATING MARKET?
A. At the start of the period, the fund's average maturity was 71 days
because I felt rates were on a downward trend and I wanted to lock in
higher yields. When the market sentiment shifted and rates rose in
anticipation of an increase in the federal funds rate, I shortened the
average maturity somewhat - to help me position the fund so I could
reinvest at ever-higher yields as the fund's existing holdings matured. In
the summer, I shortened the maturity further to the 50-day range because
the potential for Fed tightening was strong, and, again, I wanted to be
able to obtain higher yields going forward. From that point, I increased
the average maturity of the fund by purchasing some securities further out
on the yield curve that I felt were factoring in the worst case scenario
regarding potential Fed tightening. At the end of September, the fund's
average maturity was back out to 65 days, reflecting my opinion that Fed
policy would remain steady for the foreseeable future. Since that time,
I've kept the maturity in the 60-65 day range, looking for value in the
four- to six-month range of the yield curve.
Q. HOW DID THE FUND PERFORM?
A. On November 30, 1996, the fund's seven-day yield was 5.00%, compared to
5.28% 12 months ago. The fund's total return for the 12-month period was
5.18%. That beat the average total return during the same peroid of 4.97%
for the all taxable money market funds average, according to IBC Financial
Data, Inc.
Q. WHAT DO YOU SEE LOOKING OUT OVER THE NEXT SIX MONTHS?
A. The consumer retrenched a great deal in the third quarter after
contributing to strong GDP growth in the first half of the year. The debate
at this point is whether this slowdown is a "pause to refresh" or the
beginning of a new trend where consumers are too debt-strapped to keep on
spending. Retail activity during the holiday season and other fourth
quarter economic statistics should shed some light on the state of the
economy. I expect Fed monetary policy to be stable at least through the
first quarter of 1997. If the economy shows unusual strength and wage and
price pressures re-emerge, expectations of tightening should reappear. On
the other hand, I think it's unlikely the Fed will ease because of concern
about tight labor market conditions, rising wage pressures and the
potential for further inflating a stock market that the Fed seems to feel
is fully valued.
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 November 30,
1996, more than $21 billion
MANAGER: Robert Litterst,
since 1992; manager, Capital
Reserves Money Market,
Variable Insurance Products:
Money Market Portfolio, and
Fidelity Money Market Trust:
Retirement Money Market,
since 1992; joined Fidelity
in 1992
(checkmark)
INVESTMENT CHANGES

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

0 - 30 44 41 42

31 - 90 27 41 25

91 - 180 25 12 27

181 - 397 4 6 6

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

Fidelity Cash Reserves 62 days 62 days 71 days

All Taxable Money
Market Funds Average* 53 days 52 days 54 days

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996

Row: 1, Col: 1, Value: 48.0
Row: 1, Col: 2, Value: 32.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 5.0
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
Bank CDs, BAs,
TDs, and notes 48%
Commercial
paper 32%
Government
securities 15%
Other 5%
Bank CDs, BAs,
TDs, and notes 49%
Commercial
paper 34%
Government
securities 17%
Other 0%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1996

Showing Percentage of Total Value of Investments

BANKERS' ACCEPTANCES - 0.0%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
DOMESTIC BANKERS' ACCEPTANCES - 0.0%
Chase Manhattan Bank
5/12/97 5.50% $ 7,188 $ 7,014
CERTIFICATES OF DEPOSIT - 31.0%
DOMESTIC CERTIFICATES OF DEPOSIT - 2.0%
Bank of New York, NY
1/29/97 5.31 (a) 59,000 59,000
Chase Manhattan Bank
1/8/97 5.85 180,000 180,000
Chase Manhattan Bank (USA)
3/10/97 5.77 50,000 50,000
Mellon Bank, N.A.
2/18/97 5.56 25,000 25,000
3/4/97 5.82 20,000 20,000
Morgan Guaranty Trust, NY
8/12/97 5.80 100,000 99,951
433,951
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 1.2%
ABN-AMRO Bank
12/2/96 5.51 100,000 100,000
2/3/97 5.55 50,000 50,000
2/4/97 5.55 100,000 100,000
250,000
PORTLAND BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.1%
Bank of Nova Scotia
6/10/97 6.02 12,000 11,987
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 20.6%
ABN-AMRO Bank
9/10/97 6.10 50,000 49,993
Australia & New Zealand Banking
2/20/97 5.42 25,000 25,009
Bank of Tokyo - Mitsubishi Ltd.
1/6/97 5.60 40,000 40,000
1/16/97 5.48 25,000 25,000
2/5/97 5.47 50,000 50,000
2/24/97 5.45 50,000 50,000
3/3/97 5.50 150,000 150,000
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
Banque Nationale de Paris
12/2/96 5.30% $ 100,200 $ 100,200
12/2/96 5.37 178,000 178,000
3/3/97 5.38 125,000 125,000
Bayerische Landesbank Girozentrale
1/22/97 5.53 (a) 125,000 125,000
Bayerische Vereinsbank A.G.
2/3/97 5.57 125,000 125,000
Caisse Nationale de Credit Agricole
2/6/97 5.54 100,000 100,000
2/18/97 5.41 70,000 70,000
3/24/97 5.62 100,000 100,000
Canadian Imperial Bank of Commerce
12/5/96 5.63 40,000 40,000
1/27/97 5.40 160,000 160,000
Credit Suisse
5/19/97 5.40 100,000 100,000
Deutsche Bank, Germany
12/11/96 5.30 200,000 200,000
12/19/96 5.30 300,000 300,000
12/23/96 5.52 40,000 40,000
9/10/97 6.10 15,000 14,999
Dresdner Bank, A.G,. Germany
5/15/97 5.41 50,000 49,997
Landesbank Hessen - Thuringen
7/18/97 5.50 50,000 50,122
9/5/97 6.20 150,000 150,011
National Bank of Canada
2/24/97 5.40 72,000 72,000
National Westminster Bank, PLC
2/18/97 5.42 90,000 90,000
2/24/97 5.42 40,000 40,000
5/1/97 5.42 55,000 55,004
Royal Bank of Canada
8/13/97 5.80 50,000 49,976
8/18/97 5.80 130,000 129,964
Sanwa Bank, Ltd.
12/4/96 5.35 40,000 40,000
12/9/96 5.35 33,000 33,000
12/23/96 5.37 42,000 42,000
1/13/97 5.50 80,000 80,000
1/17/97 5.52 32,000 32,000
2/28/97 5.50 48,000 48,000
Societe Generale, France
12/2/96 5.52 150,000 150,000
12/20/96 5.45 225,000 225,000
2/6/97 5.40 50,000 50,000
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
Societe Generale, France - continued
4/8/97 5.50% $ 25,000 $ 24,999
Sumitomo Bank, Ltd.
1/13/97 5.55 70,000 70,000
1/17/97 5.53 39,000 39,000
1/21/97 5.54 60,000 60,000
2/18/97 5.49 20,000 20,000
2/18/97 5.50 71,000 71,000
2/24/97 5.49 21,000 21,000
Swiss Bank Corp.
3/4/97 5.75 50,000 49,999
3/11/97 5.76 200,000 200,000
3/19/97 5.45 23,000 23,015
4/21/97 5.50 25,000 25,000
Westdeutsche Landesbank
3/10/97 5.40 40,000 40,000
4/7/97 5.50 100,000 100,000
4/9/97 5.45 63,000 63,000
4/21/97 5.50 43,000 43,000
Westpac Banking Corp.
3/3/97 5.80 26,000 26,000
4,431,288
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 7.1%
ABN-AMRO Bank
4/9/97 5.50 20,000 20,001
Abbey National, Treasury Services
12/3/96 5.52 305,000 305,000
2/18/97 5.42 65,000 65,000
5/20/97 5.42 50,000 50,000
Bank of Nova Scotia
3/6/97 5.40 180,000 180,000
Bank of Scotland Treasury Services
2/20/97 5.55 20,000 20,000
3/17/97 5.75 40,000 40,000
Bank of Tokyo - Mitsubishi Ltd.
1/28/97 5.50 18,000 18,001
2/18/97 5.46 50,000 50,000
2/25/97 5.46 41,000 41,000
3/3/97 5.48 56,000 56,001
Banque Nationale de Paris
2/7/97 5.56 20,500 20,501
Bayerische Hypotheken-und Weschel
12/6/96 5.44 36,000 36,001
3/10/97 5.80 47,000 47,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - CONTINUED
Bayerische Vereinsbank A.G.
3/10/97 5.80% $ 15,000 $ 15,000
Lloyds Bank, PLC
2/24/97 5.42 37,000 37,006
4/23/97 5.40 25,000 25,005
National Westminster Bank, PLC
5/1/97 5.42 25,000 25,003
Rabobank Nederland, N.V.
12/4/96 5.53 25,000 25,000
Sanwa Bank, Ltd.
1/24/97 5.49 20,000 20,001
1/24/97 5.52 25,000 25,000
1/27/97 5.51 15,000 15,000
1/29/97 5.51 40,000 40,001
1/31/97 5.49 55,000 55,002
1/31/97 5.51 40,000 40,001
Societe Generale, France
12/18/96 5.63 50,000 50,001
Sumitomo Bank, Ltd.
1/6/97 5.50 50,000 50,001
1/6/97 5.55 10,000 10,001
2/21/97 5.49 40,000 40,001
Toronto-Dominion Bank
4/30/97 5.49 100,000 100,000
1,520,528
TOTAL CERTIFICATES OF DEPOSIT 6,647,754
COMMERCIAL PAPER - 31.9%
ABN-AMRO North America Finance, Inc.
3/10/97 5.57 50,000 49,258
AC Aquistion Holding Company
12/3/96 5.31 20,000 19,994
American Express Credit Corp.
12/4/96 5.30 75,000 74,967
American Home Products
2/7/97 5.39 20,000 19,799
Asset Securitization Coop. Corp.
12/12/96 5.32 20,000 19,968
12/17/96 5.32 26,000 25,939
Associates Corp. of North America
12/30/96 5.45 50,000 49,784
2/18/97 5.42 50,000 49,415
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Associates Corp. of North America - continued
2/19/97 5.38% $ 50,000 $ 49,411
2/20/97 5.38 40,000 39,523
2/24/97 5.42 100,000 98,744
Bank of Scotland Treasury Services
3/13/97 5.67 50,000 49,219
Bayerische Vereinsbank A.G.
12/30/96 5.65 50,000 49,779
2/18/97 5.42 80,000 79,066
Bear Stearns Cos., Inc.
12/20/96 5.30 28,000 27,922
2/24/97 5.38 50,000 49,373
2/26/97 5.38 23,000 22,705
Bradford & Bingley Building Society
5/12/97 5.46 50,000 48,805
CIT Group Holdings, Inc.
12/2/96 5.40 50,000 49,993
12/4/96 5.40 35,000 34,984
Caisse d'Amortissement de la Dette Sociale
12/23/96 5.64 75,000 74,749
12/27/96 5.66 50,000 49,801
12/27/96 5.67 50,000 49,801
3/10/97 5.82 50,000 49,223
6/3/97 6.01 255,000 247,506
Caisse des Depots et Consignations
2/19/97 5.41 40,000 39,527
2/24/97 5.42 50,000 49,372
Cheltenham & Gloucester PLC
2/28/97 5.41 50,000 49,342
Chrysler Financial Corporation
12/2/96 5.45 18,000 17,997
12/3/96 5.38 20,000 19,994
12/4/96 5.39 40,000 39,982
12/12/96 5.39 20,000 19,967
1/23/97 5.50 40,000 39,679
1/24/97 5.50 40,000 39,673
1/27/97 5.51 40,000 39,655
Citibank Credit Card Master Trust I (Dakota Certificate Program)
1/23/97 5.43 20,000 19,842
2/6/97 5.41 25,000 24,752
2/19/97 5.41 10,000 9,881
2/20/97 5.42 34,000 33,591
2/21/97 5.40 17,000 16,794
Commonwealth Bank of Australia
2/3/97 5.74 50,000 49,504
CoreStates Capital Corp. (a)
12/2/96 5.38 15,000 15,000
12/4/96 5.36 15,000 15,000
12/6/96 5.40 15,000 15,000
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
CoreStates Capital Corp. (a) - continued
12/9/96 5.38% $ 15,000 $ 15,000
Dresdner U.S. Finance Inc.
12/9/96 5.30 100,000 99,883
Dupont (E.I) de Nemours & Co.
12/19/96 5.62 50,000 49,864
Eiger Capital Corp.
12/5/96 5.31 50,000 49,971
12/16/96 5.33 15,000 14,967
12/18/96 5.33 10,000 9,975
12/20/96 5.33 50,000 49,860
Electricite de France
3/7/97 5.76 25,000 24,627
Enterprise Funding Corp.
12/4/96 5.31 20,000 19,991
12/5/96 5.30 25,000 24,985
12/10/96 5.31 19,014 18,989
12/10/96 5.33 15,000 14,980
12/12/96 5.31 5,000 4,992
12/13/96 5.32 30,905 30,850
12/17/96 5.34 22,000 21,948
12/18/96 5.33 55,000 54,862
Ford Motor Credit Corp.
12/9/96 5.30 180,000 179,790
3/17/97 5.66 100,000 98,381
GTE Corp.
12/2/96 6.10 33,000 32,994
12/3/96 5.35 10,000 9,997
12/18/96 5.37 40,000 39,899
Generale Bank
2/5/97 5.57 100,000 99,006
4/25/97 5.50 50,000 48,923
General Electric Capital Corp.
12/2/96 5.93 70,000 69,988
1/29/97 5.76 100,000 99,083
2/18/97 5.42 50,000 49,416
2/19/97 5.42 70,000 69,172
3/5/97 5.76 75,000 73,903
3/12/97 5.76 115,000 113,193
3/17/97 5.38 200,000 196,885
3/18/97 5.39 50,000 49,214
3/25/97 5.61 150,000 147,407
4/28/97 5.49 100,000 97,805
General Electric Capital Services Inc.
2/18/97 5.42 50,000 49,416
General Electric Co.
12/30/96 5.49 52,000 51,773
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
General Motors Acceptance Corp.
12/4/96 5.70% $ 55,000 $ 54,975
12/6/96 5.36 30,000 29,978
12/23/96 5.33 50,000 49,838
2/20/97 5.70 40,000 39,501
2/24/97 5.71 40,000 39,476
2/25/97 5.71 80,000 78,939
3/3/97 5.45 180,000 177,530
3/31/97 5.70 95,000 93,246
4/14/97 5.63 80,000 78,370
4/15/97 5.63 40,000 39,179
5/7/97 5.51 100,000 97,662
Goldman Sachs Group, L.P. (The)
4/29/97 5.50 100,000 97,786
5/12/97 5.45 135,000 131,780
Government of Canada
12/20/96 5.43 28,750 28,669
IBM Credit Corp.
3/3/97 5.39 24,000 23,675
3/10/97 5.38 40,000 39,417
Matterhorn Capital Corp.
12/18/96 5.33 50,000 49,875
Merrill Lynch & Co., Inc.
2/4/97 5.43 71,000 70,315
3/11/97 5.76 55,000 54,144
3/12/97 5.68 25,000 24,612
Morgan Stanley Group, Inc.
2/3/97 5.77 95,000 94,054
2/4/97 5.40 50,000 49,520
2/10/97 5.40 131,000 129,626
National Australia Funding, Inc.
3/13/97 5.60 90,000 88,618
National Bank of Canada
2/27/97 5.44 10,000 9,869
Nationwide Building Society
2/10/97 5.43 15,000 14,842
2/24/97 5.45 23,000 22,709
2/25/97 5.45 20,000 19,744
New Center Asset Trust
12/2/96 5.63 25,000 24,996
2/11/97 5.40 100,000 98,936
2/19/97 5.63 21,000 20,744
2/20/97 5.63 22,000 21,729
3/11/97 5.79 20,000 19,688
3/17/97 5.39 55,000 54,142
Norddeutsche Landesbank
3/14/97 5.60 80,000 78,750
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
PHH Corp.
1/31/97 5.43% $ 10,000 $ 9,909
2/6/97 5.43 15,000 14,850
2/7/97 5.43 21,000 20,787
2/12/97 5.44 7,000 6,924
Preferred Receivables Funding Corp.
1/16/97 5.39 40,000 39,727
1/24/97 5.40 20,000 19,840
1/27/97 5.40 18,000 17,848
Royal Bank of Canada
12/31/96 5.63 35,000 34,841
SBC Finance (DE), Inc.
3/11/97 5.76 150,000 147,667
Sears Roebuck Acceptance Corp.
12/17/96 5.35 40,000 39,905
2/13/97 5.40 15,000 14,836
Sherwood Medical Company
12/9/96 5.30 32,207 32,169
Smith Barney, Inc.
12/13/96 5.31 38,000 37,933
Swiss Bank Corp.
12/27/96 5.65 82,900 82,571
Textron, Inc.
12/3/96 5.40 3,000 2,999
12/5/96 5.41 5,000 4,997
12/9/96 5.40 7,000 6,992
12/11/96 5.40 5,000 4,993
12/11/96 5.43 10,000 9,985
12/12/96 5.41 5,000 4,992
12/20/96 5.45 10,000 9,971
Toronto Dominion Holdings USA, Inc.
2/3/97 5.75 100,000 99,008
3/5/97 5.80 30,000 29,558
Unifunding, Inc.
12/6/96 5.33 25,000 24,982
1/21/97 5.41 25,000 24,811
2/11/97 5.40 40,000 39,574
TOTAL COMMERCIAL PAPER 6,845,872
FEDERAL AGENCIES - 15.1%
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A)- 1.3%
12/13/96 5.51 100,000 99,998
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A)- CONTINUED
12/20/96 5.51% $ 100,000 $ 99,997
3/4/97 5.31 85,000 84,926
284,921
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 0.5%
3/3/97 5.31 65,000 64,133
3/5/97 5.31 30,855 30,434
94,567
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 10.0%
12/2/96 5.32 250,000 249,893
12/2/96 5.34 125,000 125,626
12/2/96 5.42 360,000 359,757
12/2/96 5.48 240,000 240,000
12/3/96 5.52 82,000 81,938
12/15/96 5.32 250,000 249,901
12/20/96 5.51 300,000 299,988
12/20/96 5.54 60,000 59,981
12/29/96 5.31 125,000 124,948
1/17/97 5.42 149,000 148,985
2/1/97 5.40 210,000 209,911
2,150,928
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 3.3%
3/17/97 5.65 48,360 47,577
3/18/97 5.65 130,295 128,165
4/7/97 5.40 95,000 93,239
4/30/97 5.34 62,285 60,933
4/30/97 5.40 40,000 39,123
5/2/97 5.34 150,000 146,705
5/5/97 5.35 69,675 68,112
5/7/97 5.35 34,950 34,156
5/9/97 5.34 96,175 93,962
711,972
TOTAL FEDERAL AGENCIES 3,242,388
BANK NOTES - 4.0%
Bank of America NW, NA
12/4/96 5.37 35,000 35,000
Boatmen's First National Bank of Kansas City
12/3/96 5.56 (a) 25,000 24,998
BANK NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Fifth Third Bank - Cincinnati
2/24/97 5.80% $ 42,000 $ 41,973
First Bank NA - Minnesota
12/18/96 5.35 (a) 30,000 30,000
First National Bank of Boston
2/3/97 5.41 75,000 75,000
First Union National Bank of North Carolina, NA
12/27/96 5.56 (a) 100,000 99,997
Key Bank of New York
12/2/96 5.44 (a) 104,000 103,953
KeyBank National Association
12/2/96 5.43 (a) 50,000 49,980
12/2/96 5.58 (a) 90,000 89,957
LaSalle National Bank
3/24/97 5.61 30,000 30,000
9/8/97 6.12 25,000 25,000
9/10/97 6.15 25,000 25,000
PNC Bank
12/9/96 5.38 (a) 105,000 104,964
12/20/96 5.38 (a) 108,000 107,997
SouthTrust Bank of Alabama
12/9/96 5.36 (a) 25,000 25,000
TOTAL BANK NOTES 868,819
MASTER NOTES (A) - 2.5%
Goldman Sachs Group, L.P. (The) (c)
2/8/97 5.50 100,000 100,000
J.P. Morgan Securities
12/6/96 5.38 303,000 303,000
Norwest Corp.
12/2/96 5.43 126,000 126,000
TOTAL MASTER NOTES 529,000
MEDIUM-TERM NOTES (A) - 5.4%
Bank of Scotland Treasury Services
2/7/97 5.48 250,000 250,000
Beneficial Corp.
12/2/96 5.35 33,000 33,000
12/5/96 5.57 50,000 50,022
12/5/96 5.64 40,000 39,995
1/19/97 5.50 27,000 26,998
MEDIUM-TERM NOTES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
CIT Group Holdings, Inc.
12/2/96 5.46% $ 50,000 $ 49,980
Commonwealth Life Insurance Co. (c)
12/2/96 5.58 50,000 50,000
General Motors Acceptance Corp.
2/1/97 5.50 100,000 100,000
2/13/97 5.53 40,000 39,998
Merrill Lynch & Co., Inc.
12/18/96 5.38 83,000 82,988
Morgan Stanley Group, Inc.
12/2/96 5.46 95,000 95,000
Norwest Corp.
4/22/97 5.55 118,000 118,000
PHH Corp.
12/13/96 5.38 95,000 94,999
Pacific Mutual Life Insurance Co. (c)
12/9/96 5.72 44,000 44,000
Transamerica Life Insurance and Annuity Co. (c)
12/2/96 5.41 20,000 20,000
12/15/96 5.59 65,000 65,000
TOTAL MEDIUM-TERM NOTES 1,159,980
SHORT-TERM NOTES (A) - 4.0%
CSA Funding - B
12/6/96 5.46 22,000 22,000
CSA Funding - C
12/6/96 5.46 6,000 6,000
Capital One Funding Corp. (1996-D)
12/6/96 5.41 25,318 25,318
Capital One Funding Corp. (1996-F)
12/6/96 5.41 43,664 43,664
Capital One Funding Corp. (1996-G)
12/6/96 5.41 10,000 10,000
Capital One Funding Corp. (1996-H)
12/6/96 5.41 20,000 20,000
Liquid Asset Backed Securities Trust (1996-1) (b)
12/15/96 5.40 91,000 91,000
Liquid Asset Backed Securities Trust (1996-2) (b)
12/2/96 5.41 134,000 134,000
SMM Trust (1995-P) (b)
12/15/96 5.68 89,250 89,250
SHORT-TERM NOTES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
SMM Trust (1996-B) (b)
12/4/96 5.43% $ 63,000 $ 63,000
SMM Trust (1996-I) (b)
12/30/96 5.43 102,000 102,000
SMM Trust (1996-V) (b)
12/26/96 5.71 255,000 255,000
TOTAL SHORT-TERM NOTES 861,232
TIME DEPOSITS - 1.2%
Bank of Tokyo - Mitsubishi Ltd.
12/2/96 5.38 120,000 120,000
12/4/96 5.38 25,000 25,000
12/12/96 5.36 60,000 60,000
Berliner Handels U Frankfurter
12/3/96 5.75 40,000 40,000
TOTAL TIME DEPOSITS 245,000
MUNICIPAL SECURITIES - 0.1%
New York Gen. Oblig.
12/17/96 5.48 21,970 21,970
University of California Regents Series B
12/10/96 5.35 11,000 10,985
TOTAL MUNICIPAL SECURITIES 32,955
REPURCHASE AGREEMENTS - 4.8%
MATURITY AMOUNT
(000S)
In a joint trading account
(U.S. Government Obligations):
dated 11/19/96 due 12/2/96
At 5.32% $ 250,480 250,000
dated 11/29/96 due 12/2/96
At 5.78% 410,440 410,242
dated 10/2/96 due 12/3/96 (d)
At 5.40% 100,930 100,000
REPURCHASE AGREEMENTS - CONTINUED
MATURITY AMOUNT VALUE (NOTE 1)
(000S) (000S)
In a joint trading account
(U.S. Government Obligations): - continued
dated 11/5/96 due 12/4/96
At 5.31% $ 175,749 $ 175,000
dated 11/5/96 due 12/4/96
At 5.34% 100,430 100,000
TOTAL REPURCHASE AGREEMENTS 1,035,242
TOTAL INVESTMENTS - 100% $ 21,475,256
Total Cost for Income Tax Purposes $ 21,475,256
LEGEND
(1.) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(2.) 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 $734,250,000 or 3.5% of net
assets.
(3.) Restricted security; subject to resale restrictions.
(4.) Payable on seven-day demand.
INCOME TAX INFORMATION
At November 30, 1996, the fund had a capital loss carryforward of
approximately $2,304,000 of which $510,000, $1,634,000 and $160,000 will
expire on November 30, 2001, 2002 and 2004 , respectively.
A total of 2.57% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1996

ASSETS

Investment in securities, at value (including repurchase $ 21,475,256
agreements of $1,035,242) - See accompanying
schedule

Interest receivable 119,054

TOTAL ASSETS 21,594,310

LIABILITIES

Payable for investments purchased $ 330,927

Share transactions in process 11,775

Accrued management fee 3,580

Other payables and accrued expenses 7,430

TOTAL LIABILITIES 353,712

NET ASSETS $ 21,240,598

Net Assets consist of:

Paid in capital $ 21,241,673

Accumulated net realized gain (loss) on investments (1,075)

NET ASSETS, for 21,241,673 shares outstanding $ 21,240,598

NET ASSET VALUE, offering price and redemption price per $1.00
share ($21,240,598 (divided by) 21,241,673 shares)

</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996

INTEREST INCOME $ 1,073,243

EXPENSES

Management fee $ 40,411

Transfer agent fees 54,104

Accounting fees and expenses 804

Non-interested trustees' compensation 105

Custodian fees and expenses 312

Registration fees 1,847

Audit 211

Legal 109

Miscellaneous 157

Total expenses before reductions 98,060

Expense reductions (354) 97,706

NET INTEREST INCOME 975,537

NET REALIZED GAIN (LOSS) ON INVESTMENTS (160)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 975,377

STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,

1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 975,537 $ 916,152
Net interest income

Net realized gain (loss) (160) 686

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 975,377 916,838
FROM OPERATIONS

Distributions to shareholders from net interest income (975,537) (916,152)

Share transactions at net asset value of $1.00 per share 36,638,550 31,772,441
Proceeds from sales of shares

Reinvestment of distributions from net interest income 948,155 891,871

Cost of shares redeemed (34,777,730) (28,761,771)

NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 2,808,975 3,902,541
RESULTING FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 2,808,815 3,903,227

NET ASSETS

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

End of period $ 21,240,598 $ 18,431,783

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30,

1996 1995 1994 1993 1992

SELECTED PER-SHARE DATA

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

Income from Investment .051 .055 .037 .029 .038
Operations
Net interest income

Less Distributions

From net interest (.051) (.055) (.037) (.029) (.038)
income

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

TOTAL RETURN 5.18% 5.67% 3.74% 2.97% 3.90%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 21,241 $ 18,432 $ 14,529 $ 10,314 $ 10,040

(in millions)

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

Ratio of net interest 5.06% 5.50% 3.76% 2.92% 3.86%
income to average
net assets

</TABLE>

NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 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 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 for 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.
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.
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 annual rate of .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 annual rate of .28%
of 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 $16,000 and $338,000,
respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and the Shareholders
of Fidelity Cash Reserves:
We have audited the accompanying statement of assets and liabilities of
Fidelity Cash Reserves, including the schedule of portfolio investments, as
of November 30, 1996, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of
the five years in the period then ended. 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 November 30, 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 Cash Reserves as of November 30, 1996, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
December 23, 1996
MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* 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
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, 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
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, 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

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
Sarah H. Zenoble, 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
Exchanges/Redemption 1-800-544-7777
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)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE

FIDELITY

(registered trademark)
U.S. GOVERNMENT RESERVES

ANNUAL REPORT
NOVEMBER 30, 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.

REPORT OF INDEPENDENT 20 The auditor's opinion.
ACCOUNTANTS

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 NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity U.S. Government Reserves 5.12% 22.25% 71.78%

Government Money Market Funds Average 4.79% 21.05% 69.46%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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
228 money market funds with similar objectives tracked by IBC Financial
Data, Inc. over the past 12 months.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity U.S. Government Reserves 5.12% 4.10% 5.56%

Government Money Market Funds Average 4.79% 3.89% 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
11/28/95 2/27/96 5/28/96 9/3/96 12/3/96

Fidelity U.S. Government 5.45% 4.81% 4.92% 4.97% 4.98%
Reserves

Government Money 5.09% 4.59% 4.57% 4.66% 4.73%
Market Funds Average

11/29/95 2/28/96 5/29/96 8/28/96 12/4/96

2.86% 2.76% 2.66% 2.68% 2.63%
MMDA

Row: 1, Col: 1, Value: 5.45
Row: 1, Col: 2, Value: 5.09
Row: 1, Col: 3, Value: 2.86
Row: 2, Col: 1, Value: 4.81
Row: 2, Col: 2, Value: 4.59
Row: 2, Col: 3, Value: 2.76
Row: 3, Col: 1, Value: 4.92
Row: 3, Col: 2, Value: 4.57
Row: 3, Col: 3, Value: 2.66
Row: 4, Col: 1, Value: 4.970000000000001
Row: 4, Col: 2, Value: 4.659999999999999
Row: 4, Col: 3, Value: 2.68
Row: 5, Col: 1, Value: 4.98
Row: 5, Col: 2, Value: 4.73
Row: 5, Col: 3, Value: 2.63
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
bank money market deposit account (MMDA) average . Figures for the
government money market funds average are from 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
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, CAN YOU GIVE US AN IDEA OF WHAT THE INVESTMENT ENVIRONMENT WAS
LIKE OVER THE PAST YEAR?
A. At the beginning of the period, most market participants were expecting
interest rates to fall well into 1996 because the economy was growing
slowly and inflationary pressures were under control. That sentiment was
reinforced by the Federal Reserve Board, which twice lowered the interest
rate banks charge each other for overnight loans - known as the federal
funds rate - in late 1995 and early 1996. However, signs soon emerged
indicating that the economy was growing rapidly, as evidenced by a healthy
increase in the gross domestic product (GDP). This backdrop led much of the
market to anticipate that the Fed would increase the federal funds rate in
order to slow the economy and prevent inflationary pressures from building.
For several months, the market traded within a narrow range, selling off
when strong employment numbers were reported, then bouncing back when other
statistics such as retail sales showed some weakness. Over the past few
months, the market broke out of this range as further data reinforced the
belief that the economy was indeed slowing from the robust pace of the
second quarter of 1996. Given this slowdown and continued modest inflation,
expectations of a Fed tightening have been almost completely removed from
the current level of short-term rates.
Q. WHAT STRATEGY DID YOU PURSUE IN THIS ENVIRONMENT?
A. Early in the period, I kept the average maturity a bit lower - in the
high 30-day and mid 40-day range - than I ordinarily would in a declining
interest rate climate, because I felt the market's expectations were
running too far ahead of the Fed's actions. When expectations shifted, I
maintained the maturity at the same level to keep the fund flexible and to
keep pace with rising rates. In July, I let the fund's average maturity
decline into the 30-day range because I felt the chances were good that the
Fed would raise short-term rates. When the Fed's August meeting passed and
it appeared there would be no action on interest rates, I increased the
fund's average maturity to the mid-40s, and it stood at 40 days at the end
of the period.
Q. HOW HAS THE FUND PERFORMED?
A. Better than most of its competitors. On November 30, 1996, the fund's
seven-day yield was 4.93%, compared to 5.44% a year ago. The fund's total
return for the 12 months was 5.12%. That beat the average total return
during the same period of 4.79% for the government money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I think it's likely we'll see no change in Fed policy over the next few
months. One of the reasons is that the increase in GDP for the third
quarter was to a large degree due to a higher level of inventory
accumulation. The key from here is whether the economy rekindles due to a
pick-up in retail sales, helping to work off those inventories. I believe
the economy will continue along at a good pace - not at one so strong that
the Fed feels it has to increase short-term rates, but also not one weak
enough to create concerns about a recession. This backdrop should create a
stable fed funds rate environment, and a trading range within the short end
of the market similar to what we saw in April, May and June. As a result,
I'll probably keep the fund flexible, with an average maturity in the
mid-40s.
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 November 30,
1996, more than $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
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
11/30/96 5/31/96 11/30/95

0 - 30 65 30 58

31 - 90 20 17 28

91 - 180 10 18 11

181 - 397 5 35 3

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

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

Government
Money Market Funds
Average * 48 days 49 days 47 days

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996

Row: 1, Col: 1, Value: 60.0
Row: 1, Col: 2, Value: 9.0
Row: 1, Col: 3, Value: 31.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 1, Value: 64.0
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 26.0
Row: 1, Col: 4, Value: 3.0
Federal agency
issues 60%
U.S. Treasury
obligations 9%
Repurchase
agreements 31%
Other 0%
Federal agency
issues 66%
U.S. Treasury
obligations 7%
Repurchase
agreements 26%
Other 1%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1996

Showing Percentage of Total Value of Investments

FEDERAL AGENCIES - 59.6%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - AGENCY COUPONS (A) - 2.7%
12/2/96 5.59% $ 33,000 $ 32,992
FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 6.5%
12/28/96 5.30 24,000 23,986
12/2/96 5.78 15,000 14,998
12/4/96 5.29 42,000 41,973
80,957
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 2.0%
1/29/97 5.64 25,000 24,775
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 8.7%
1/3/97 5.30 11,000 10,947
1/3/97 5.31 39,000 38,813
2/5/97 5.30 11,000 10,895
2/13/97 5.30 14,554 14,398
2/14/97 5.30 9,000 8,902
2/18/97 5.30 14,000 13,839
3/7/97 5.31 11,000 10,847
108,641
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 27.0%
12/2/96 5.34 33,000 33,165
12/2/96 5.35 58,000 57,985
12/2/96 5.36 49,000 48,990
12/2/96 5.42 45,000 44,970
12/2/96 5.48 15,000 15,000
12/2/96 5.85 40,000 40,000
12/3/96 5.52 15,000 14,989
12/4/96 5.29 28,000 27,977
12/20/96 5.54 15,000 14,995
2/1/97 5.40 28,000 27,988
2/21/97 5.40 9,000 8,998
335,057
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 8.8%
12/27/96 5.48 10,000 9,961
1/22/97 5.30 26,000 25,804
2/4/97 5.45 38,000 37,636
4/21/97 5.40 9,000 8,815
4/28/97 5.69 6,000 5,865
4/30/97 5.40 22,000 21,518
109,599
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 3.9%
12/3/96 5.26% $ 18,000 $ 18,007
12/3/96 5.40 30,000 30,000
48,007
TOTAL FEDERAL AGENCIES 740,028
U.S. TREASURY OBLIGATIONS - 9.5%
U.S. TREASURY BILLS
4/3/97 5.54 32,000 31,425
4/3/97 5.55 26,000 25,533
8/21/97 5.63 6,500 6,247
8/21/97 5.66 6,500 6,246
8/21/97 5.67 24,000 23,060
9/18/97 5.68 9,000 8,609
9/18/97 5.70 5,000 4,782
9/18/97 5.71 12,000 11,476
TOTAL U.S. TREASURY OBLIGATIONS 117,378
MEDIUM-TERM NOTES (A)(B) - 0.3%
EXPORT-IMPORT BANK, U.S. (AS GUARANTOR FOR K.A. LEASING, LTD.)
12/15/96 5.44 4,135 4,135
REPURCHASE AGREEMENTS - 30.6%
MATURITY AMOUNT
(000S)
In a joint trading account (Notes 2 and 3)
(U.S. Government Obligations):
dated 9/16/96 due 12/2/96 (c)
At 5.40% $ 30,347 30,000
dated 11/25/96 due 12/2/96
At 5.37% 52,054 52,000
dated 11/29/96 due 12/2/96
At 5.78% 229,595 229,484
REPURCHASE AGREEMENTS - CONTINUED
MATURITY AMOUNT VALUE (NOTE 1)
(000S) (000S)
In a joint trading account (Notes 2 and 3)
(U.S. Government Obligations): - continued
dated 11/5/96 due 12/4/96
At 5.34% $ 31,133 $ 31,000
dated 11/21/96 due 1/21/97 (c)
At 5.37% 37,337 37,000
TOTAL REPURCHASE AGREEMENTS 379,484
TOTAL INVESTMENTS - 100% $ 1,241,025
Total cost for Income Tax Purposes $ 1,241,025
LEGEND
(1.) 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.
(2.) 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
SECURITY DATE COST (000)
Export-Import Bank
U.S. (as Guarantor for
K.A. Leasing, Ltd.) 7/29/94 $ 4,135
(3.) Payable on seven-day demand.
INCOME TAX INFORMATION
At November 30, 1996, the fund had a capital loss carryforward of
approximately $85,000 of which $19,000 and $66,000 will expire on November
30, 2001 and 2003, respectively.
A total of 25.52% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1996

ASSETS

Investment in securities, at value (including $ 1,241,025
repurchase agreements of $379,484) -
See accompanying schedule

Interest receivable 4,152

TOTAL ASSETS 1,245,177

LIABILITIES

Share transactions in process $ 1,763

Distributions payable 159

Accrued management fee 207

Other payables and accrued expenses 341

TOTAL LIABILITIES 2,470

NET ASSETS $ 1,242,707

Net Assets consist of:

Paid in capital $ 1,242,732

Accumulated net realized gain (loss) on investments (25)

NET ASSETS, for 1,243,168 shares outstanding $ 1,242,707

NET ASSET VALUE, offering price and redemption price per $1.00
share ($1,242,707 (divided by) 1,243,168 shares)

</TABLE>

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996

INTEREST INCOME $ 65,705

EXPENSES

Management fee $ 2,461

Transfer agent fees 3,201

Accounting fees and expenses 140

Non-interested trustees' compensation 8

Custodian fees and expenses 17

Registration fees 187

Audit 36

Legal 7

Miscellaneous 8

Total expenses before reductions 6,065

Expense reductions (82) 5,983

NET INTEREST INCOME 59,722

NET REALIZED GAIN (LOSS) ON INVESTMENTS 12

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 59,734

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,

1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 59,722 $ 62,412
Net interest income

Net realized gain (loss) 12 (66)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 59,734 62,346
FROM OPERATIONS

Distributions to shareholders from net interest income (59,722) (62,412)

Share transactions at net asset value of $1.00 per share 1,718,909 1,491,809
Proceeds from sales of shares

Reinvestment of distributions from net interest income 56,628 59,448

Cost of shares redeemed (1,720,835) (1,492,867)

NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 54,702 58,390
RESULTING FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 54,714 58,324

NET ASSETS

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

End of period $ 1,242,707 $ 1,187,993

</TABLE>

FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED TWO MONTHS YEARS ENDED SEPTEMBER 30,
NOVEMBER 30, ENDED
NOVEMBER
30,

1996 1995 1994 1994 1993 1992

SELECTED PER-SHARE DATA

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

Income from .050 .055 .008 .033 .025 .039
Investment
Operations
Net interest income

Less Distributions

From net interest (.050) (.055) (.008) (.033) (.025) (.039)
income

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

TOTAL RETURN B 5.12% 5.60% .78% 3.32% 2.57% 3.95%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 1,243 $ 1,188 $ 1,130 $ 1,060 $ 1,043 $ 1,292
period (in millions)

Ratio of expenses to .51% .55% .36% A .51% .73% .73%
average net assets , C

Ratio of expenses to .50% .55% .36% A .51% .73% .73%
average net assets D
after expense
reductions

Ratio of net interest 5.02% 5.43% 4.77% A 3.27% 2.57% 3.88%
income to average
net assets

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D 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 5 OF
NOTES TO THE FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996

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.
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 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 for 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
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 $4,135,000 or 0.3% of net assets
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were $30,347,000 at 5.40%, $52,054,000 at 5.37%, $229,595,000
at 5.78%, $31,133,000 at 5.34% and $37,337,000 at 5.37%. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING
Dated September 16, 1996, due December 2, 1996 5.40%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $202,310,000
Aggregate market value of transferred assets $206,740,821
Coupon rates of transferred assets 9.00% to 9.50%
Maturity dates of transferred assets 4/15/16 to 11/15/22
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
Dated November 25, 1996, due December 2, 1996 5.37%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $200,208,833
Aggregate market value of transferred assets $207,016,853
Coupon rates of transferred assets 6.00% to 10.00%
Maturity dates of transferred assets 9/1/00 to 10/1/26
Dated November 29, 1996, due December 2, 1996 5.78%
Number of dealers or banks 6
Maximum amount with one dealer or bank 27.8%
Aggregate principal amount of agreements $2,520,000,000
Aggregate maturity amount of agreements $2,521,214,283
Aggregate market value of transferred assets $2,600,029,527
Coupon rates of transferred assets 4.50% to 12.50%
Maturity dates of transferred assets 6/1/98 to 12/15/43
Dated November 5, 1996, due December 4, 1996 5.34%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $475,000,000
Aggregate maturity amount of agreements $477,043,292
Aggregate market value of transferred assets $490,992,834
Coupon rates of transferred assets 6.00% to 10.00%
Maturity dates of transferred assets 4/15/07 to 11/15/26
Dated November 21, 1996, due January 21, 1997 5.37%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $252,274,792
Aggregate market value of transferred assets $257,500,000
Coupon rates of transferred assets 5.25% to 9.00%
Maturity dates of transferred assets 2/1/11 to 5/1/34
4. 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 annual rate of .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 annual rate of .27%
of 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.
5. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its 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 transfer agent fees were
reduced by $82,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Phillips Street Trust and the Shareholders of
Fidelity U.S. Government Reserves:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity U. S. Government Reserves at November 30, 1996, the results of its
operations for the year then ended, the changes in its net assets for the
two years then ended, and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities owned
at November 30, 1996 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
December 30, 1996
MANAGING YOUR INVESTMENTS

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
Sarah H. Zenoble, 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
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE