August 1, 1996
Dear Scudder Investor,
Until April 30, 1997, Scudder, Stevens & Clark, Inc. has agreed to limit
Scudder Tax Free Money Fund's total operating expenses to 0.65% of average daily
net assets. In essence, Scudder will pay any of the Fund's operating expenses
exceeding this amount. This change effectively lowers the cost of owning shares
of Scudder Tax Free Money Fund, and as a result, the Fund's yield will generally
be higher than if expenses were not maintained.
The reverse side of this document is a replacement page for your Scudder
Tax Free Money Fund prospectus. It outlines shareholder transaction expenses,
the new annual fund operating expenses, and an example of what it would cost to
own Scudder Tax Free Money Fund assuming certain variables.
If you have any questions about this change, please call us at
1-800-225-2470, between 8 a.m. and 8 p.m., eastern time, Monday through Friday.
Scudder Investor Relations representatives are standing by to help.
Sincerely,
/s/David S. Lee
David S. Lee
President, Scudder Investor Services, Inc.
This letter is for explanatory purposes and is not part of the prospectus
supplement on the reverse side.
(over please)
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Scudder Tax Free Money Fund Supplement to Prospectus Dated May 1, 1996
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How to compare a Scudder pure no-load(TM) fund
This information is designed to help you understand the various costs and expenses of investing in Scudder Tax Free
Money Fund and Scudder Medium Term Tax Free Fund. By reviewing this table and those in other mutual funds'
prospectuses, you can compare each Fund's fees and expenses with those of other funds. With Scudder's pure
no-load(TM) funds, you pay no commissions to purchase or redeem shares, or to exchange from one fund to another. As
a result, all of your investment goes to work for you.
1) Shareholder transaction expenses: Expenses charged directly to your individual account in either Fund for
various transactions.
Scudder Tax Free Money Scudder Medium
Fund Term Tax Free Fund
---- ------------------
<S> <C> <C>
Sales commissions to purchase shares (sales load) NONE NONE
Commissions to reinvest dividends NONE NONE
Redemption fees NONE* NONE*
Fees to exchange shares NONE NONE
2) Annual Fund operating expenses: Expenses paid by either Fund before it distributes its net investment income,
expressed as a percentage of its average daily net assets for the year ended December 31, 1995.
Investment management fees 0.40%*** 0.57%**
12b-1 fees NONE NONE
Other expenses 0.25% 0.15%
---- ----
Total Fund operating expenses 0.65%*** 0.72%**
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Example
Based on the levels of total Fund operating expenses listed above, the total expenses relating to a $1,000
investment, assuming a 5% annual return and redemption at the end of each period, are listed below. Investors do not
pay these expenses directly; they are paid by each Fund before it distributes its net investment income to
shareholders. (As noted above, the Funds have no redemption fees of any kind.)
One year $ 7 $ 7
Three years 21 23
Five years 36 40
Ten years 81 90
See "Fund organization--Investment adviser" for further information about the investment management fees. This
example assumes reinvestment of all dividends and distributions and that the percentage amounts listed under "Annual
Fund operating expenses" remain the same each year. This example should not be considered a representation of past
or future expenses or return. Actual Fund expenses and return vary from year to year and may be higher or lower than
those shown.
* You may redeem by writing or calling the Funds or by Write-A-Check. If you wish to receive redemption proceeds via
wire, there is a $5 wire service fee. For additional information, please refer to "Transaction
information--Redeeming shares."
** The Adviser waived a portion of its fee so that the Fund's total operating expenses did not exceed 0.70% from
January 1, 1995 to October 31, 1995. The above table shows what the fees and expenses would have been if the
Adviser had not agreed to waive a portion of its fee. Actual expenses charged for the year ended December 31, 1995,
after waiver, equaled 0.70% of average daily net assets.
*** April 30, 1997, the Adviser has agreed to waive a portion of its fee to the extent necessary so that the total
annualized expenses of the Fund do not exceed 0.65% of average daily net assets. The above table shows what the
fees and expenses would have been if the Adviser had agreed to waive a portion of its fee for the fiscal year ended
December 31, 1995. Actual expenses charged for the fiscal year ended December 31, 1995 were: investment management
fee 0.50%, other expenses 0.25% and total operating expenses 0.75%. To the extent that expenses fall below 0.65%
during the fiscal year, the Adviser reserves the right to recoup, during the fiscal year incurred, amounts waived
during the period, but only to the extent that the Fund's expenses do not exceed 0.65%.
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August 1, 1996
