SUPPLEMENT TO THE FIDELITY CASH RESERVES AND FIDELITY U.S. GOVERNMENT
RESERVES JANUARY 20, 1998 PROSPECTUS
The following information replaces similar information found under
the heading "Investment Principles and Risks" beginning on page 9.
The funds comply with industry-standard requirements on the
quality, maturity, and diversification of their investments, which are
designed to help maintain a stable $1.00 share price. Of course, there
is no guarantee that the funds will maintain a stable $1.00 share
price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. While the funds will be charged
premiums by a mutual insurance company for coverage of specified types
of losses related to default or bankruptcy on certain securities, a
fund may incur losses regardless of the insurance. In general,
securities with longer maturities are more vulnerable to price
changes, although they may provide higher yields. It is possible that
a major change in interest rates or a default on the funds'
investments could cause their share prices (and the value of your
investment) to change.
The following information replaces similar information found in the
"How to Buy Shares" section on page 18.
These minimums may vary for investments through a Fidelity Payroll
Deduction Program account in Cash Reserves. There is no minimum
account balance or initial or subsequent investment minimum for
certain retirement accounts funded through salary deduction, or
accounts opened with the proceeds of distributions from Fidelity
retirement accounts. Refer to the appropriate program materials for
details.
SUPPLEMENT TO THE FIDELITY CASH RESERVES
AND FIDELITY U.S. GOVERNMENT RESERVES
JANUARY 20, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING FUNDAMENTAL LIMITATION REPLACES LIMITATION (2) FOUND
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION OF FIDELITY CASH
RESERVES ON PAGE 2.
(2) issue senior securities, except in connection with the
insurance program established by the fund pursuant to an exemptive
order issued by the Securities and Exchange Commission or as otherwise
permitted under the Investment Company Act of 1940;
THE FOLLOWING FUNDAMENTAL LIMITATION REPLACES LIMITATION (2) FOUND
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION OF FIDELITY U.S.
GOVERNMENT RESERVES ON PAGE 3.
(2) issue senior securities, except in connection with the
insurance program established by the fund pursuant to an exemptive
order issued by the Securities and Exchange Commission or as otherwise
permitted under the Investment Company Act of 1940;
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
MONEY MARKET INSURANCE. Each fund participates in a mutual
insurance company solely with other funds advised by FMR or its
affiliates. This company provides insurance coverage for losses on
certain money market instruments held by a participating fund
(eligible instruments), including losses from nonpayment of principal
or interest or a bankruptcy or insolvency of the issuer or credit
support provider, if any. The insurance does not cover losses
resulting from changes in interest rates or other market developments.
Each fund is charged an annual premium for the insurance coverage and
may be subject to a special assessment of up to approximately two and
one-half times the fund's annual gross premium if covered losses
exceed certain levels. A participating fund may recover no more than
$100 million annually, including all other claims of insured funds,
and may only recover if the amount of the loss exceeds 0.30% of its
eligible instruments. Each fund may incur losses regardless of the
insurance.
THE FOLLOWING NON-FUNDAMENTAL LIMITATION REPLACES LIMITATION (I) FOUND
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION OF FIDELITY CASH
RESERVES BEGINNING ON PAGE 2.
(i) The fund does not currently intend to purchase a security (other
than obligations issued or guaranteed as to principal and interest by
the United States government, its agencies or instrumentalities) if,
as a result, more than 5% of its total assets would be invested in
securities of a single issuer; provided the fund may invest up to 10%
of its total assets in the first tier securities of a single issuer
for up to three business days and in the securities of money market
funds.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INVESTMENT LIMITATIONS OF
FIDELITY CASH RESERVES BEGINNING ON PAGE 2.
For purposes of limitations (1) and (i), certain securities subject to
guarantees (including insurance, letters of credit and demand
features) are not considered securities of their issuer, but are
subject to separate diversification requirements, in accordance with
industry standard requirements for money market funds.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INVESTMENT LIMITATIONS OF
FIDELITY U.S. GOVERNMENT RESERVES BEGINNING ON PAGE 3.
For purposes of limitation (1), certain securities subject to
guarantees (including insurance, letters of credit and demand
features) are not considered securities of their issuer, but are
subject to separate diversification requirements, in accordance with
industry standard requirements for money market funds.
