<PAGE>
PAGE 1
FINANCIAL PLANNING
IDS Tax-Free Money Fund
1993 annual report
(prospectus enclosed)
(Icon of) Piggy Bank
The goal of IDS Tax-Free Money Fund, Inc. is to provide as a high a
level of current income exempt from federal income tax as is
consistent with liquidity and stability of principal. The fund
invests primarily in short-term bonds and notes issued by or on
behalf of state or local governmental units.
IDS
An American Express company
AMERICAN
EXPRESS
Distributed by IDS Financial Services Inc.<PAGE>
PAGE 2
(Icon of) Piggy Bank
Stability without taxes
Everyone needs to have a cash reserve to cover unexpected expenses.
But where to keep it? It's easy to find an investment that
provides stability and ready access to your money, but there's
usually a drawback: You have to pay taxes on the interest the
money earns. But there is an alternative -- Tax-Free Money Fund.
The interest it pays is generally free from federal taxes. The
result: A cash reserve that can let you keep tax-exempt income it
earns.<PAGE>
PAGE 3
Contents
(Icon of) One book inside of another, both opened together.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus which is bound into the middle of this annual
report, describes the fund in detail.
1993 annual report
From the president 4
From the portfolio manager 4
Making the most of your fund 6
Independent auditors' report 8
Financial statements 9
Notes to financial statements 12
Investments in securities 15
IDS mutual funds 19
Federal income tax information 22
1993 prospectus
The fund in brief
Goal 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 5p
Key terms 6p
How to buy, exchange or sell shares
How to buy shares 7p
How to exchange shares 10p
How to sell shares 11p
Special shareholder services
Services 16p
Quick telephone reference 16p
Distributions and taxes
Dividend and capital gain distributions 17p
Reinvestments 17p
Taxes 19p<PAGE>
PAGE 4
Investment policies
Facts about investments and their risks 22p
Valuing assets 24p
How the fund is organized
Shares 25p
Voting rights 25p
Shareholder meetings 25p
Directors and officers 25p
Investment manager and transfer agent 27p
Distributor 28p
About IDS
General information 29p
Appendix
Description of corporate bond ratings 30p<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the Fund
(Photo of) Terry Fettig, Portfolio Manager
From the president
As you read this report, you'll find it very different from those
you've received from us in the past. We've made substantial
changes in the design and organization to make the information
easier to find and understand.
The annual report and prospectus are combined into a single
document, and each provides information important to you. The
annual report gives you the fund's performance information and a
snapshot of its investments. A good place to begin is with the
portfolio manager's letter, which describes the events and
investment strategies that most influenced the fund's performance
during the year. The prospectus includes essential data such as
the fund's investment policies and service information.
In redesigning our reports, we asked IDS financial planners and
some of you for suggestions and recommendations. We believe you'll
find the results of our work worthwhile.
William R. Pearce
From the portfolio manager
IDS Tax-Free Money Fund's yield closely tracked the short-term
interest rate trend of the past year -- declining during the first
several months, then moving slightly higher toward the end of the
year. Net asset value was unchanged for the year, providing
shareholders with continued stability of principal in addition to a
tax-free return.
(Investors should keep in mind that an investment in the fund is
not insured or guaranteed by the U.S. government. Although the
fund seeks to maintain a stable $1 share price, there is no
assurance that it will be able to do so.)
For the seven-day period ended Dec. 31, 1993, the fund provided an
annualized simple yield of 2.48% and an annualized compound yield
of 2.51%. These are equal to 3.44% simple and 3.49% compound
taxable yields for someone in the 28-percent federal income-tax
bracket.
Emphasis remains on protecting principal
In recent months, we have tried to diversify our holdings in
variable-rate demand notes, commercial paper and longer-term notes.
Overall, however, the philosophy behind this fund remains
unchanged. We are still concentrating on high-quality securities,
that are easy to sell on the open market. This strategy is
designed to meet the fund's chief goal of protecting investors'
principal.<PAGE>
PAGE 6
Investors should also know that, under federal law, some notes
issued on the tax-free market are subject to the alternative
minimum tax (AMT). To eliminate any federal income-tax liabilities
for investors who may be subject to AMT requirements, we will
continue to refrain from purchasing these issues.
Improving credit quality
We are looking forward to a stronger economy in 1994, which should
improve the credit quality for many of the issuers of tax-free
securities.
In addition, we expect short-term rates to rise as the year
progresses. In light of that, we have made substantial investments
in short-term vehicles, giving us greater flexibility to take
advantage of the higher rates as they emerge. If these rates de
move upward, the fund's yield would also rise somewhat, and,
assuming inflation remains under control, shareholders could
benefit from a higher real (inflation-adjusted) return. As always,
we will continue to position the fund to maintain a stable net
asset value.
Terry Fettig
<PAGE>
PAGE 7
Average annual total return
(as of Dec. 31, 1993)
1 year 5 years 10 years
+1.60% +3.68% +4.12%
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
Do you have a lump sum of money to invest, but want to limit the
volatility that can be experienced in the stock and bond markets?
Consider making your initial lump sum investment into this fund and
combine it with a time tested technique called dollar-cost
averaging. Simply move a regular amount of money each month from
this fund into an investment with the potential for higher return.
Dollar-cost averaging is a strategy that can make market
fluctuations work for you. And for many investors, it's one of the
best ways to invest in mutual funds. Dollar-cost averaging is
simply investing a fixed amount of money regularly. Combining this
strategy with your investment in this fund gives you a double
advantage:
You'll earn attractive current yields on the dollars invested in
this fund.
You can set up a simple, systematic investment plan to invest in
stock and bond mutual funds to help you meet your financial goals.
<PAGE>
PAGE 8
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
By investing an equal number of dollars each month...
(arrow pointing to April) you automatically buy more shares when
the per share market price is low
(arrow pointing to August) and fewer shares when the per share
market price is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
You have paid an average price of only $10.81 per share over the 10
months, while the average market price actually was $13.10.
Three ways to benefit from a mutual fund:
your shares increase in value when the fund's investments do well
you receive capital gains when the gains on investments sold by the
fund exceed losses
you receive income when the fund's stock dividends, interest and
short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.<PAGE>
PAGE 9
Independent auditors' report
___________________________________________________________________
The Board of directors and shareholders
IDS Tax-Free Money Fund, Inc.:
We have audited the accompanying statement
of assets and liabilities, including the
schedule of investments in securities, of
IDS Tax-Free Money Fund, Inc. as of
December 31, 1993, and the related
statement of operations for the year then
ended and the statements of changes in net
assets for each of the years in the two-
year period ended December 31, 1993, and
the financial highlights for each of the
years in the ten-year period ended
December 31, 1993. These financial
statements and the financial highlights are
the responsibility of Fund management. Our
responsibility is to express an opinion on
these financial statements and the
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 the 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.
Investment securities held in custody are
confirmed to us by the custodian. 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
referred to above present fairly, in all
material respects, the financial position
of IDS Tax-Free Money Fund, Inc. at
December 31, 1993, and the results of its
operations for the year then ended and the
changes in its net assets for each of the
years in the two-year period ended
December 31, 1993, and the financial<PAGE>
PAGE 10
highlights for the periods stated in the
first paragraph above, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick
Minneapolis, Minnesota
February 4, 1994<PAGE>
PAGE 11
Financial statements
<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Tax-Free Money Fund, Inc.
Dec. 31, 1993
__________________________________________________________________________________________________________
Assets
__________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $114,459,386) $114,459,386
Cash in bank on demand deposit 687,413
Accrued interest receivable 586,907
__________________________________________________________________________________________________________
Total assets 115,733,706
__________________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________________
Dividends payable to shareholders 25,569
Accrued investment management and services fee 33,589
Accrued distribution fee 4,633
Accrued transfer agency fee 17,336
Other accrued expenses 60,015
__________________________________________________________________________________________________________
Total liabilities 141,142
__________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $115,592,564
__________________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 115,613,175 shares $ 1,156,132
Additional paid-in capital 114,457,873
Undistributed net investment income 45
Accumulated net realized loss on investments (21,486)
__________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $115,592,564
__________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 1.00
__________________________________________________________________________________________________________
See accompanying notes to financial statements.</TABLE>
<PAGE>
PAGE 12
Financial statements
<TABLE>
<CAPTION>
Statement of operations
IDS Tax-Free Money Fund, Inc.
Year ended Dec. 31, 1993
__________________________________________________________________________________________________________
Investment income
__________________________________________________________________________________________________________
<S> <C>
Income:
Interest $2,894,702
__________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 425,170
Distribution fee 55,052
Transfer agency fee 213,262
Compensation of directors 17,320
Compensation of officers 1,455
Custodian fees 3,634
Postage 35,316
Registration fees 60,052
Reports to shareholders 12,597
Audit fees 18,000
Administrative 4,420
Other 9,708
__________________________________________________________________________________________________________
Total expenses 855,986
__________________________________________________________________________________________________________
Investment income -- net 2,038,716
__________________________________________________________________________________________________________
Realized loss on investments -- net
__________________________________________________________________________________________________________
Net realized loss on investments (Note 3) (16,772)
__________________________________________________________________________________________________________
Net increase in net assets resulting from operations $2,021,944
__________________________________________________________________________________________________________
See accompanying notes to financial statements.</TABLE>
<PAGE>
PAGE 13
Financial statements
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Tax-Free Money Fund, Inc.
Year ended Dec. 31,
__________________________________________________________________________________________________________
Operations and distributions 1993 1992
__________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 2,038,716 $ 3,344,811
Net realized gain (loss) on investments (16,772) 1,769
__________________________________________________________________________________________________________
Net increase in net assets resulting from operations 2,021,944 3,346,580
__________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (2,038,709) (3,344,870)
__________________________________________________________________________________________________________
Capital share transactions at constant $1.00 net asset value
__________________________________________________________________________________________________________
Proceeds from sales of shares 210,478,473 287,766,796
Net asset value of shares
issued in reinvestment of distributions 1,959,174 3,071,989
Payments for redemptions of shares (233,790,673) (297,705,423)
__________________________________________________________________________________________________________
Decrease in net assets from capital share transactions (21,353,026) (6,866,638)
__________________________________________________________________________________________________________
Total decrease in net assets (21,369,791) (6,864,928)
Net assets at beginning of year 136,962,355 143,827,283
__________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$45 and $38) $115,592,564 $136,962,355
__________________________________________________________________________________________________________
See accompanying notes to financial statements./TABLE
<PAGE>
PAGE 14
Notes to financial statements
IDS Tax-Free Money Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. Significant accounting policies
followed by the fund are summarized below:
Valuation of securities
Pursuant to Rule 2a-7 of the 1940 Act, all
securities are valued daily at amortized cost,
which approximates market value, in order to
maintain a constant net asset value of $1 per
share.
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable
to regulated investment companies and to
distribute all of its taxable income to
shareholders, no provision for income or excise
taxes is required.
Dividends to shareholders
Dividends from net investment income, declared
daily and payable monthly, are reinvested in
additional shares of the fund at net asset value
or payable in cash.
Other
Security transactions are accounted for on the
date securities are purchased or sold. Interest
income including level-yield amortization of
premium and discount, is accrued daily.
<PAGE>
PAGE 15
Notes to financial statements
IDS Tax-Free Money Fund, Inc.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991,
the fund pays IDS Financial Corporation (IDS) a
fee for managing its investments, recordkeeping
and other specified services. The fee is a
percentage of the fund's average daily net assets
consisting of an annual asset charge in reducing
percentages from 0.34% to 0.26% annually.
The fund also pays IDS a distribution fee at an
annual rate of $6 per shareholder account and a
transfer agency fee at an annual rate of $24 per
shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder
redemptions.
IDS will assume and pay any expenses (except
taxes and brokerage commissions) that exceed the
most restrictive applicable state expense
limitation.
The fund has a retirement plan for its
independent directors. Upon retirement, directors
receive monthly payments equal to one-half of the
retainer fee for as many months as they served as
directors up to 120 months. There are no death
benefits. The plan is not funded but the fund
recognizes the cost of payments during the time
the directors serve on the Board. The retirement
plan expense amounted to $4,707 for the
year ended Dec. 31, 1993.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities aggregated $339,112,775 and
$358,477,317, respectively, for the year ended
Dec. 31, 1993. Realized gains and losses are
determined on an identified cost basis.
___________________________________________________________________
4. Financial highlights
"Financial highlights" showing per share data and
selected information is presented on page 5 of
the prospectus.
<PAGE>
PAGE 16
Investments in securities
<TABLE>
IDS Tax-Free Money Fund, Inc. Percentages represent value of
Dec. 31, 1993 investments compared to net assets)
__________________________________________________________________________________________________________
<CAPTION>
Principal Value(a)
Name of issuer and title of issue (b) amount
__________________________________________________________________________________________________________
<S> <C> <C>
Alaska (0.9%)
Valdez Marine Terminal Refunding Revenue Bonds Mobil Alaska Pipeline
3.00% 11-1-03 $1,000,000 (c,d) $ 1,000,000
__________________________________________________________________________________________________________
Arizona (6.6%)
Maricopa County Pollution Control Revenue Bonds Southern California Edison T.E.C.P.
Series E
2.10% 2-8-94 2,120,000 2,120,000
2.25% 4-7-94 1,000,000 1,000,000
Salt River Agricultural Improvement & Power District T.E.C.P.
2.25% 4-5-94 1,000,000 1,000,000
2.55% 1-6-94 1,000,000 1,000,000
2.60% 1-6-94 500,000 500,000
2.60% 1-19-94 2,000,000 2,000,000
_____________
Total 7,620,000
__________________________________________________________________________________________________________
California (3.9%)
Sacramento County T.R.A.N. Series 1993 3.00% 7-29- 942,000,000 2,005,796
State Contra Costa Transportation Authority Series 1993A (FGIC Insured)
3.00% 3-1-09 2,500,000 (c,d,e) 2,500,000
____________
Total 4,505,796
__________________________________________________________________________________________________________
Connecticut (6.2%)
Development Authority Pollution Control Bonds Western Massachusetts
Series 93A
3.10% 9-1-28 1,000,000 (c,d) 1,000,000
3.30% 9-1-28 1,200,000 (c,d) 1,200,000
Development Authority Pollution Control Revenue Bonds Connecticut Light
& Power Series 93A
3.10% 9-1-28 4,000,000 (c,d) 4,000,000
3.30% 9-1-28 1,000,000 (c,d) 1,000,000
____________
Total 7,200,000
__________________________________________________________________________________________________________
Florida (4.8%)
State Municipal Power Agency Revenue Bonds T.E.C.P. Series A
2.65% 1-13-94 1,500,000 1,500,000
2.70% 1-12-94 4,000,000 4,000,000
____________
Total 5,500,000
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 17
Investments in securities
<TABLE>
IDS Tax-Free Money Fund, Inc. Percentages represent value of
Dec. 31, 1993 investments compared to net assets)
_________________________________________________________________________________________________________
<CAPTION>
Principal Value(a)
Name of issuer and title of issue (b) amount
__________________________________________________________________________________________________________
<S> <C> <C>
Georgia (0.4%)
Development Authority of Burke County T.E.C.P. Series 1992A
2.60% 1-12-94 $ 500,000 $ 500,000
_________________________________________________________________________________________________________
Idaho (4.3%)
State T.A.N. Series 1993 3.00% 6-30-94 5,000,000 5,009,593
_________________________________________________________________________________________________________
Indiana (4.3%)
State Bond Bank Advancement Fund Program Series 1993A
3.15% 1-18-94 3,000,000 3,000,544
Mount Vernon Pollution Control & Solid Waste Disposal Revenue Bonds
General Electric T.E.C.P. Series 1989A
2.05% 2-9-94 1,000,000 1,000,000
2.60% 1-18-94 1,000,000 1,000,000
____________
Total 5,000,544
__________________________________________________________________________________________________________
Kentucky (0.9%)
Jefferson County Pollution Control Revenue Series 93
2.60% 1-11-94 1,000,000 1,000,000
__________________________________________________________________________________________________________
Louisiana (1.7%)
Parish of East Baton Rouge Pollution Control Refunding Bonds Exxon
Series 93 2.85% 9-1-23 2,000,000 (c,d) 2,000,000
__________________________________________________________________________________________________________
Massachusetts (2.9%)
State Option Revenue Bonds Harvard University Series I
2.85% 2-1-16 3,400,000 (c,d) 3,400,000
__________________________________________________________________________________________________________
Michigan (3.9%)
Regents of the University Hospital Refunding Revenue Bonds Series 1992A
4.50% 12-1-19 4,500,000 (c,d) 4,500,000
__________________________________________________________________________________________________________
Minnesota (9.1%)
Becker Northern States Power T.E.C.P. Series 1993B
2.10% 2-9-94 1,000,000 1,000,000
2.65% 1-13-94 500,000 500,000
2.70% 1-13-94 3,000,000 3,000,000
2.70% 3-22-94 1,000,000 1,000,000
University T.E.C.P. Series 1985H
2.70% 1-10-94 2,000,000 2,000,000
University T.E.C.P. Series 1985I
2.55% 1-11-94 1,000,000 1,000,000
2.60% 1-7-94 2,000,000 2,000,000
____________
Total 10,500,000
__________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 18
Investments in securities
<TABLE>
IDS Tax-Free Money Fund, Inc. Percentages represent value of
Dec. 31, 1993 investments compared to net assets)
__________________________________________________________________________________________________________
<CAPTION>
Principal Value(a)
Name of issuer and title of issue (b) amount
_________________________________________________________________________________________________________
<S> <C> <C>
Mississippi (2.4%)
Jackson County Pollution Control Revenue Bonds Chevron
4.50% 12-1-16 $2,800,000 (c,d) $ 2,800,000
__________________________________________________________________________________________________________
Missouri (2.6%)
University Curators Capital Series FY-A 3.00% 6-30-94 3,000,000 3,008,664
__________________________________________________________________________________________________________
Nebraska (1.3%)
State Public Power District T.E.C.P. 2.55% 1-20-94 1,500,000 1,500,000
__________________________________________________________________________________________________________
New York (2.2%)
New York City Municipal Water Financial Authority Series 1992C
3.80% 6-15-22 2,000,000 (c,d) 2,000,000
New York City Water B.A.N. 2.75% 4-15-94 500,000 500,417
____________
Total 2,500,417
__________________________________________________________________________________________________________
North Carolina (6.9%)
Medical Care Community Hospital Revenue Bonds Duke University
Hospital Series 1985B 2.95% 6-1-15 3,000,000 (c,d)
3,000,000
Medical Care Community Hospital Revenue Bonds Duke University
Hospital Series 1985C 2.95% 6-1-15 2,000,000 (c,d) 2,000,000
Municipal Power Agency #1 Catawba T.E.C.P.
2.60% 1-5-94 2,000,000 2,000,000
2.60% 1-11-94 1,000,000 1,000,000
____________
Total 8,000,000
__________________________________________________________________________________________________________
Pennsylvania (4.7%)
Delaware County Industrial Development Authority Airport Facility
Revenue Bonds Series 1985 4.30% 12-1-15 5,400,000 (c,d) 5,400,000
__________________________________________________________________________________________________________
Texas (10.0%)
City of San Antonio Electric & Gas System T.E.C.P. Series A
2.20% 2-9-94 1,500,000 1,500,000
2.55% 1-25-94 2,000,000 2,000,000
Gulf Coast Amoco 4.25% 10-12-17 4,500,000 (c,d) 4,500,000
Lower Colorado River Authority T.E.C.P. Series B 2.75% 1-12-94 1,500,000 1,500,000
State Municipal Power Agency T.E.C.P. 2.65% 1-14-94 2,000,000 2,000,000
____________
Total 11,500,000
__________________________________________________________________________________________________________
Virginia (4.3%)
Peninsula Port Authority Shell Oil Series 1987 4.75% 12-1-05 5,000,000 (c,d) 5,000,000
__________________________________________________________________________________________________________
See accompanying notes to investments in securities./TABLE
<PAGE>
PAGE 19
Investments in securities
<TABLE>
IDS Tax-Free Money Fund, Inc. Percentages represent value of
Dec. 31, 1993 investments compared to net assets)
__________________________________________________________________________________________________________
<CAPTION>
Principal Value(a)
Name of issuer and title of issue (b) amount
__________________________________________________________________________________________________________
<S> <C> <C>
Washington (2.6%)
Washington Public Power Supply System Electric Refunding Revenue Bonds
Project #3 3.00% 7-1-18 $3,000,000 (c,d) $ 3,000,000
__________________________________________________________________________________________________________
Wisconsin (4.3%)
State Operating Notes 3.25% 6-15-94 5,000,000 5,014,372
__________________________________________________________________________________________________________
Wyoming (7.8%)
Lincoln County Exxon Pollution Control Revenue Bonds Series 1984D
3.80% 11-1-14 2,000,000 (c,d) 2,000,000
Sublette County Exxon Series 1984 4.25% 11-1-14 4,000,000 (c,d) 4,000,000
Uinta County Pollution Control Refunding Revenue Bonds Chevron USA
Series 92 4.50% 12-1-22 3,000,000 (c,d) 3,000,000
____________
Total 9,000,000
__________________________________________________________________________________________________________
Total investments in securities (99.0%)
(Cost: $114,459,386)(f) $114,459,386
__________________________________________________________________________________________________________
Notes to investments in securities
__________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) The following abbreviations are used in portfolio descriptions:
B.A.N. -- Bond Anticipation Note
T.A.N. -- Tax Anticipation Note
T.E.C.P. -- Tax-Exempt Commercial Paper
T.R.A.N. -- Tax & Revenue Anticipation Note
(c) Interest rate varies to reflect current market conditions; rate shown is the effective rate on Dec.
31, 1993.
(d) Holder entitled to receive principal amount from issuer after a day or a week's notice. The maturity
date disclosed
represents the final maturity. However, for purposes of Rule 2a-7, maturity is the later of the next
put or interest
rate reset date.
(e) The following abbreviation is used in the portfolio description to identify
the insurer of the issue:
FGIC -- Financial Guarantee Insurance Corporation
(f) At Dec. 31, 1993, also represents the cost of securities for federal income
tax purposes.</TABLE>
________________________________________________________________________________
PAGE 20
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conversation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Planned Investment Account
Invests in money market securities to provide maximum current
income consistent with liquidity and stability of principal of
principal, while serving as a base for systematic exchanges into
IDS fixed income and equity funds.
(icon of) stair steps
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
<PAGE>
PAGE 21
Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories,or the equivalent, and in
government bonds.
(icon of) greek column
IDS Strategy Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund, Inc.
Invests in high quality corporate bonds and other highly-rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund, Inc.
Invests primarily in securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies and
instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund, Inc.
Invests primarily in medium- and lower-quality municipal bonds and
notes.
(icon of) shield with basket of apples enclosed
<PAGE>
PAGE 22
IDS State Tax-Exempt Funds
(California, Massachusetts, Michigan, Minnesota, New York, Ohio)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund, Inc.
Invests mainly in bonds and notes of state or local government
units, with at least 75 percent in the four highest rated, lowest
risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the Fund but does not guarantee
the market value of the Fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund, Inc.
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20
percent of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holding may range
from small- to large-capitalization stocks, including those of
companies involve in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund, Inc.
Invests in a combination of common stocks, fixed income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest<PAGE>
PAGE 23
IDS Equity Plus Fund, Inc.
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund, Inc.
Invests primarily in common stocks of blue chip U.S. companies
representing almost every major sector of the economy. Seeks
current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund, Inc.
Invests primarily in the stocks of public utility companies to
provide high current income and growth of income and capital with
reduced volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to provide high
current income and, secondarily to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
<PAGE>
PAGE 24
Growth funds
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund, Inc.
Invests in small and medium-sized, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Growth Fund, Inc.
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
Portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS New Dimensions Fund, Inc.
Invests primarily in domestic companies with significant growth
potential due to superiority in technology, marketing or
management. The Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund, Inc.
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long-term with the goal of capital growth.
(icon of) shooting star
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
<PAGE>
PAGE 25
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
IDS Precious Metals Fund, Inc.
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your IDS personal financial planner or writing to IDS Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440. Read it carefully
before you invest or send money.<PAGE>
PAGE 26
Federal income tax information
IDS Tax-Free Money Fund, Inc.
___________________________________________________________________
The fund is required by the Internal Revenue Code
of 1986 to tell its shareholders about the tax
treatment of the dividends it pays during its
fiscal year. The dividends listed below were
reported to you on your year-end statement, in
January.
IDS Tax-Free Money Fund, Inc.
Year ended Dec. 31, 1993
Exempt-interest dividends -- taxable status
explained below.
Payable date Per share
________________________________________________
Jan. 26, 1993 $0.0013
Feb. 24, 1993 0.0012
March 25, 1993 0.0012
April 23, 1993 0.0012
May 24, 1993 0.0014
June 24, 1993 0.0013
July 23, 1993 0.0011
Aug. 23, 1993 0.0014
Sept. 23, 1993 0.0014
Oct. 22, 1993 0.0013
Nov. 23, 1993 0.0014
Dec. 28, 1993 0.0016
_________________________________________________
Total $0.0158
_________________________________________________
Source of distributions
Distributions during the year ended Dec. 31,
1993, were derived exclusively from interest on
tax-exempt securities.
Federal taxation
Exempt-interest dividends are exempt from federal
income taxes and should not be included in
shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state
and local taxes. Each shareholder should consult
a tax adviser about reporting this income for
state and local tax purposes.<PAGE>
PAGE 27
IDS Tax-Free Money Fund, Inc.
Federal income tax information (continued)
___________________________________________________________________
Source of income by state
Percentages of income from municipal securities
earned by the fund from various states during the
year ended Dec. 31, 1993 are listed below.
Alaska 0.036%
Alabama 2.295
Arizona 2.897
California 1.785
Colorado 1.172
Connecticut 0.856
Florida 4.408
Georgia 2.228
Idaho 4.217
Illinois 1.263
Indiana 4.953
Kentucky 0.284
Louisiana 0.244
Maine 1.148
Massachusetts 3.886
Michigan 6.795
Minnesota 3.891
Missouri 1.140
Mississippi 0.704
Nebraska 2.539
New Jersey 2.947
New York 2.538
North Carolina 8.957
Pennsylvania 5.665
Texas 12.488
Utah 2.953
Virginia 3.710
Wisconsin 4.792
Wyoming 9.209
<PAGE>
PAGE 28
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial planner:
IDS TAX-FREE MONEY FUND
IDS Tower 10
Minneapolis, MN 55440-0010<PAGE>
PAGE 29
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
