<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ____
Post-Effective Amendment No. 24 (File No. 2-66868) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 25 (No. 811-3003) X
IDS TAX-FREE MONEY FUND, INC.
IDS Tower 10, Minneapolis, MN 55440-0534
Leslie L. Ogg - 901 S. Marquette Avenue, Suite 2810,
Minnepolis, MN 55402-3268
(612) 330-9283
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
x on March 1, 1993, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24-f of the Investment Company Act of 1940. Registrants' Rule
24f-2 Notice for its most recent fiscal year will be filed on or
about March 1, 1993.
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PAGE 2
Cross reference sheet showing location in the prospectus of the
information called for by the items enumerated in Part A and Part B
of Form N-1A.
Negative answers omitted from prospectus are so indicated.
<TABLE>
<CAPTION>
PART A PART B
Page Number
Page Number in Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 3 10 24
2 5-7 11 25
3 7 12 NA
4(a) 5-7,16-17,17 13(a) 26-28,42-45
(b) 16-17 (b) 26-28
(c) 16-17 (c) NA
(d) NA
5(a) 18-19
(b) 20-21 14(a) 18-19*
(c) NA (b) 18-19*
(d) 19 (c) 19*
(e) 20
(f) 20-21 15(a) NA
(b) NA
6(a) 17 (c) 19*
(b) NA
(c) NA 16(a) 20-21*
(d) NA (b) 36
(e) 3 (c) NA
(f) 14 (d) None
(g) 15-16 (e) NA
(f) 37-38
7(a) 20 (g) NA
(b) 8 (h) 41,41
(c) NA (i) 36-37,41
(d) 9
(e) NA 17(a) 28-29
(f) 20 (b) NA
(c) 28-29
8(a) 10-11 (d) NA
(b) NA (e) 28-29
(c) 10
(d) 12 18(a) 17*
(b) NA
9 None
19(a) 31-32
(b) 30-31
(c) NA
20 35
21(a) 37
(b) 37
(c) NA
22(a) 29-30
(b) NA
23 41
</TABLE>
*Designates page number in the Prospectus which is hereby
incorporated by reference in the Statement of Additional
Information.
<PAGE>
PAGE 3
IDS Tax-Free Money Fund
Prospectus
March 1, 1994
The goal of IDS Tax-Free Money Fund, Inc. is to provide as 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.
An investment in the fund is neither insured nor guaranteed by the
U.S. government. There can be no assurance that the fund will be
able to maintain a stable net asset value of $1 per share.
This prospectus contains facts that can help you decide if the fund
is the right investment for you. Read it before you invest and
keep it for future reference.
Additional facts about the fund are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission. The SAI, dated March 1, 1994, is incorporated here by
reference. For a free copy contact IDS Shareholder Service.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
IDS Shareholder Service
P.O. Box 534
Minneapolis, MN
55440-0534
612-671-3733
TTY: 800-846-4852
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PAGE 4
Table of contents
The fund in brief
Goal
Types of fund investments
Manager and distributor
Portfolio manager
Sales charge and fund expenses
Sales charge
Operating expenses
Performance
Financial highlights
Yield
Key terms
How to buy, exchange or sell shares
How to buy shares
How to exchange shares
How to sell shares
Special shareholder services
Services
Quick telephone reference
Distributions and taxes
Dividend and capital gain distributions
Reinvestments
Taxes
Investment policies
Facts about investments and their risks
Valuing assets
How the fund is organized
Shares
Voting rights
Shareholder meetings
Directors and officers
Investment manager and transfer agent
Distributor
About IDS
General information
Appendix
Tax-exempt vs. taxable income
<PAGE>
PAGE 5
The fund in brief
Goal
IDS Tax-Free Money Fund seeks to provide shareholders with as high
a level of current income exempt from federal income tax as is
consistent with liquidity and stability of principal. Because any
investment involves risk, achieving this goal cannot be guaranteed.
Only shareholders can change the goal.
Types of fund investments
The fund is a diversified mutual fund that invests at least 80% of
its net assets in short-term debt obligations whose interest is
exempt from federal income tax. The fund invests only in high
quality debt securities such as municipal bonds and notes that the
portfolio manager believes present minimal credit risk.
Manager and distributor
The fund is managed by IDS Financial Corporation (IDS), a provider
of financial services since 1894. IDS currently manages more than
$36 billion in assets for the IDS MUTUAL FUND GROUP. Shares of the
fund are sold through IDS Financial Services Inc., a wholly owned
subsidiary of IDS.
Portfolio manager
Terry Fettig joined IDS in 1986 and serves as portfolio manager.
He has managed this fund since April 1993. From 1986 to 1992 he
was a fixed income securities analyst. From 1992 to 1993 he was an
associate portfolio manager. He also serves as portfolio manager
for IDS Cash Management Fund, IDS Planned Investment Account and
IDS Life Moneyshare Fund.
Sales charge and fund expenses
Sales charge
When you buy shares, you pay no sales charge.
Shareholder transaction expenses
Maximum sales charge on purchases
(as a percent of offering price).................0%
Operating expenses
The fund pays certain expenses out of its assets; the expenses are
reflected in the fund's daily share price and dividends, and are
not charged directly to shareholder accounts. The following chart
gives a projection of these expenses -- based on historical
expenses.
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PAGE 6
Annual fund operating expenses
(% of average daily net assets)
Management fee 0.34%
12b-1 fee 0.04%
Other expenses 0.30%
Total 0.68%
Example: Suppose for each year for the next 10 years, fund
expenses are as above and annual return is 5%. If you sold your
shares at the end of the following years, for each $1,000 invested,
you would pay total expenses of:
1 year 3 years 5 years 10 years
$7 $22 $38 $85
This example does not represent actual expenses, past or future.
Actual expenses may be higher or lower than those shown. Because
the fund pays annual distribution fees, shareholders who stay in
the fund for more than 20 years may indirectly pay an equivalent
of more than a 7.25% sales charge, the maximum permitted by the
National Association of Securities Dealers.
Fund expenses include fees paid to IDS for:
o managing its portfolio, providing investment research and
administrative services
o distribution (known as 12b-1 fees, after the federal rule that
authorizes them)
o transfer agent services, including handling shareholder
accounts and records.
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PAGE 7
Performance
Financial highlights
<TABLE>
<CAPTION>
IDS Tax-Free Money Fund, Inc.
Performance
Financial highlights
Year ended Dec. 31,
Per share income and capital changes*
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
beginning of year
Income from investment operations:
Net investment income .02 .02 .04 .05 .05 .04 .04 .04 .05 .05
Less distributions:
Dividends from net (.02) (.02) (.04) (.05) (.05) (.04) (.04) (.04) (.05) (.05)
investment income
Net asset value, $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
end of year
Ratios/supplemental data
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
Net assets, end of year $116 $137 $144 $153 $117 $131 $116 $107 $74 $60
(in millions)
Ratio of expenses to .68% .63% .70% .71% .67% .65% .69% .69% .69% .71%
average daily net assets
Ratio of net income to 1.63% 2.25% 3.78% 5.24% 5.47% 4.54% 3.80% 3.97% 4.76% 5.49%
average daily net assets
Total return 1.6% 2.2% 3.8% 5.2% 5.6% 4.6% 3.9% 4.0% 4.9% 5.6%
*For a share outstanding throughout the year. Rounded to the nearest cent.
The information in this table has been audited by KPMG
Peat Marwick, independent auditors. The independent
auditors' report and additional information about the
performance of the fund is contained in the fund's
annual report, which if not included with this prospectus,
may be obtained without charge.</TABLE>
The information in this table has been audited by KPMG Peat
Marwick, independent auditors. The independent auditors' report
and additional information about the performance of the fund is
contained in the fund's annual report which, if not included with
this prospectus, may be obtained without charge.
Yield
The fund's annualized simple yield for the seven days ended Dec.
31, 1993, was 2.48% and its annualized compound yield was 2.51%.
The fund calculates annualized simple and compound yields based on
a seven-day period.
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PAGE 8
Key terms
Net asset value (NAV) - Value of a single fund share. It is the
total value of all of a fund's investments and other assets, less
any liabilities, divided by the number of shares outstanding.
The NAV is the price you receive when you sell your shares and is
calculated at the close of business, normally 3 p.m. Central time,
each business day (any day the New York Stock Exchange is open).
Public offering price - Price at which you buy shares.
Constant net asset value - Although there is no guarantee, the fund
will use its best efforts to maintain a constant net asset value of
$1 per share.
Investment income - Interest earned on securities held by the fund.
Capital gains or losses - Sometimes small short-term gains or
losses are realized when securities are sold.
Yield - Annualized simple and compound yield calculation is based
on a seven-day period.
How to buy, exchange or sell shares
How to buy shares
If you're investing in this fund for the first time, you'll need to
set up an account. Your financial planner will help you fill out
and submit an application. Your application will be accepted only
when federal funds (funds of the Federal Reserve System) are
available to the fund, normally within three days of receipt of
your application. Once your account is set up, you can choose
among several convenient ways to invest.
Important: When opening an account, you must provide IDS with your
correct Taxpayer Identification Number (Social Security or Employer
Identification number). See "Distributions and taxes."
When you buy shares for a new or existing account, the price you
pay per share is determined at the close of business on the day
your investment is received and accepted at the Minneapolis
headquarters.
Combining investments
The fund shares are offered without a sales charge. Unless they
were exchanged from a fund subject to a sales charge, the shares
are not included for purposes of determining reduced charges for
purchases of shares of other funds. For more information about
reduced sales charges, see the prospectuses of other publicly
offered funds in the IDS MUTUAL FUND GROUP.
<PAGE>
PAGE 9
Purchase policies
o Investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to
be included in your account that day and to receive that day's
share price. Otherwise your purchase will be processed the
next business day and you will pay the next day's share price.
o The minimums allowed for investment may change from time to
time.
o Wire orders can be accepted only on days when your bank, IDS,
the fund and Norwest Bank Minneapolis are open for business.
o Wire purchases are completed when wired payment is received
and a fund accepts the purchase.
o IDS and the funds are not responsible for any delays that
occur in wiring funds, including delays in processing by the
bank.
o You must pay any fee the bank charges for wiring.
o The funds reserve the right to reject any application for any
reason.
Three ways to invest
<TABLE>
<CAPTION>
1
<S> <C> <C>
By regular account Send your check and application Minimum amounts
(or your name and account number Initial investment:$ 2,000
if you have an established account) Additional
to: investments: $ 100
IDS Financial Services Inc. Account balances: $ 300*
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial planner will help you
with this process.
2
By scheduled Contact your financial planner Minimum amounts
investment plan to set up one of the following Initial investment: $2,000
scheduled plans: Additional
investments: $100/mo
o automatic payroll deduction Account balances: none
(on active plans of
o bank authorization monthly payments)
o direct deposit of
Social Security check
o other plan approved by the Fund
3
By wire If you have an established account, If this information is not
you may wire money to: included, the order may be
rejected and all money
Norwest Bank Minneapolis received by the fund, less
Routing No. 091000019 any costs the fund or IDS
Minneapolis, MN incurs, will be returned
Attn: Domestic Wire Department promptly.</TABLE>
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PAGE 10
<TABLE>
<CAPTION>
<S> <C> <C>
Give these instructions: Minimum amounts:
Credit IDS Account #00-30-015 Each wire investment: $1,000
for personal account # (your
account number) for (your name).
*If your account balance falls below $300, IDS will ask you in writing to bring it up to $300
or establish a scheduled investment plan. If you don't do so within 30 days, your shares can
be redeemed and the proceeds mailed to you.
</TABLE>
How to buy, exchange or sell shares
How to exchange shares
You can exchange your shares of the fund for shares of any other
publicly offered fund in the IDS MUTUAL FUND GROUP available in
your state. For complete information, including fees and expenses,
read the prospectus carefully before exchanging into a new fund.
If your initial investment was in this fund, and you exchange into
a non-money market fund, you will have to pay a sales charge. If
your initial investment was in a non-money market fund and you
exchange shares into this fund, you may exchange that amount,
including dividends earned on that amount, without paying a sales
charge. If your exchange creates a new account, it must satisfy
the minimum dollar amount necessary for new purchases.
If your exchange request arrives at the Minneapolis headquarters
before the close of business, your shares will be redeemed at the
net asset value set for that day. The proceeds will be used to
purchase new fund shares the same day. Otherwise, your exchange
will take place the next business day at that day's net asset
value.
For tax purposes, an exchange represents a sale and purchase and
may result in a gain or loss. However, you cannot create a tax
loss (or reduce a taxable gain) by exchanging from the fund within
91 days of your purchase. For further explanation, see the SAI.
How to sell shares
You can sell (redeem) your shares at any time. IDS Shareholder
Service will mail payment within seven days after receiving your
request.
When you sell shares, the amount you receive may be more or less
than the amount you invested. Your shares will be redeemed at net
asset value at the close of business on the day your request is
accepted at the Minneapolis headquarters. If your request arrives
after the close of business, the price per share will be the net
asset value at the close of business on the next business day.
A redemption is a taxable transaction. If the fund's net asset
value when you sell shares is more or less than the cost of your
shares, you will have a gain or loss, which can affect your tax
liability.
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<TABLE>
<CAPTION>
Three ways to request an exchange or sale of shares
1
<S> <C>
By letter Include in your letter:
o the name of the fund(s)
o your account number(s) (for exchanges, both funds must
Regular mail: be registered in the same ownership)
IDS Shareholder Service o your Taxpayer Identification Number (TIN)
Attn: Redemptions o the dollar amount or number of shares you want to
PO Box 534 exchange or sell
Minneapolis, MN o signature of all registered account owners
55440-0534 o for redemptions, indicate how you want your sales
proceeds delivered to you
Express mail: o any paper certificates of shares you hold
IDS Shareholder Service
Attn: Redemptions
10th Floor
733 Marquette Ave
Minneapolis, MN 55402
2
By phone
IDS Telephone o The fund and IDS will honor any telephone exchange or
Transaction Service redemption request believed to be authentic and will use
800-437-3133 or reasonable procedures to confirm that they are. This
612-671-3800 includes asking identifying questions and tape recording
calls. So long as reasonable procedures are followed,
neither the fund nor IDS will be liable for any loss
resulting from fraudulent requests.
o Phone exchange and redemption privileges automatically
apply to all accounts except custodial, corporate or
qualified retirement accounts unless you request these
privileges NOT apply by writing IDS Shareholder Service.
Each registered owner must sign the request.
o IDS answers phone requests promptly, but you may
experience delays when call volume is high. If you are
unable to get through, use mail procedure as an
alternative.
o Phone privileges may be modified or discontinued at any
time.
3
By draft
Free drafts are available and can be used just like a check to withdraw $500 or more from
your account. The shares in your account earn dividends until they are redeemed by the fund
to cover your drafts. Most accounts will automatically receive free drafts. However, to
receive drafts on qualified or custodial business accounts, you must contact IDS Shareholder
Service. A request form will be supplied and must be signed by each registered owner. Your
draft writing privilege may be modified or discontinued at any time. If you request a
photocopy of a paid draft you will be charged $5 per copy.
Minimum amount
Redemption: $500
Maximum amount
Redemption: $50,000
</TABLE>
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PAGE 12
Exchange policies:
o You may make up to three exchanges within any 30-day period,
with each limited to $300,000. These limits do not apply to
scheduled exchange programs and certain employee benefit plans or
other arrangements through which one shareholder represents the
interests of several. Exceptions may be allowed with pre-approval
of the fund.
o If your exchange creates a new account, it must satisfy the
minimum investment amount for new purchases.
o Once we receive your exchange request, you cannot cancel it.
o Shares of the new fund may not be used on the same day for
another exchange.
o If your shares are pledged as collateral, the exchange will be
delayed until written approval is obtained from the secured party.
o IDS and the fund reserve the right to reject any exchange, limit
the amount, or modify or discontinue the exchange privilege, to
prevent abuse or adverse effects on the fund and its shareholders.
For example, if exchanges are too numerous or too large, they may
disrupt the fund's investment strategies or increase its costs.
Redemption policies
o A telephone redemption request will not be allowed within 30
days of a phoned-in address change.
Important: If you request a redemption of shares you recently
purchased by a check or money order that is not guaranteed, the
fund will wait for your check to clear. Please expect a minimum of
10 days from the date of purchase before IDS mails a check to you.
(A check may be mailed earlier if your bank provides evidence
satisfactory to the fund and IDS that your check has cleared.)
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PAGE 13
Three ways to receive payment when you sell shares
<TABLE>
<CAPTION>
1
<S> <C>
By regular or express mail o Mailed to the address on record.
o Payable to names listed on the account.
NOTE: The express mail delivery charges
you pay will vary depending on the
courier you select.
2
By wire o Minimum wire redemption: $1,000.
o Request that money be wired to your bank.
o Bank account must be in the same
ownership as the IDS account.
NOTE: Pre-authorization required. For
instructions, contact your financial
planner or IDS Shareholder Service.
3
By scheduled payout plan o Minimum payment: $50.
o Contact your financial planner or IDS
Shareholder Service to set up regular
payments to you on a monthly, bimonthly,
quarterly, semiannual or annual basis.
o Buying new shares while under a payout
plan may be disavantageous because of
sales charges.
</TABLE>
Special shareholder services
Services
To help you track and evaluate the performance of your investments,
IDS provides these services:
Quarterly statements listing all of your holdings and transactions
during the previous three months.
Yearly tax statements featuring average-cost-basis reporting of
capital gains or losses if you redeem your shares along with
distribution information - which simplifies tax calculations.
A personalized mutual fund progress report detailing returns on
your initial investment and cash-flow activity in your account. It
calculates a total return to reflect your individual history in
owning fund shares. This report is available from your financial
planner.
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
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PAGE 14
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
Distributions and taxes
The fund distributes to shareholders investment income and any
short-term capital gains. It does so to qualify as a regulated
investment company and to avoid paying corporate income and excise
taxes. Dividend and capital gains distributions will have tax
consequences you should know about.
Dividend income
The fund calculates its net investment income (interest earned on
securities held by the fund, less operating expenses) each business
day. A dividend is then declared payable to shareholders of record
of the previous day.
Reinvestments
Dividends are automatically reinvested in additional shares of the
fund, unless:
o you request the fund in writing or by phone to pay
distributions to you monthly in cash, or
o you direct the fund to invest your distributions monthly in
any publicly available IDS fund for which you've previously
opened an account, except for IDS Planned Investment Account.
Your purchases may be subject to a sales charge. The reinvestment
price is the net asset value at close of business on the day the
distribution is paid. (Your quarterly statement from IDS will
confirm the amount invested and the number of shares purchased.)
If you choose cash distributions, you will receive only those
declared after your request has been processed.
If the U.S. Postal Service cannot deliver the checks for the cash
distributions, we will reinvest the checks into your account at the
then-current net asset value and make future distributions in the
form of additional shares.
<PAGE>
PAGE 15
Taxes
Distributions from interest earned on tax-exempt securities are
exempt from federal income tax. Distributions must be reported on
your income tax returns in the year the fund pays them regardless
of whether you take them in cash or reinvest them.
Each January, IDS sends you a statement showing the kinds and total
amount of all distributions you received during the previous year.
You must report all distributions on your tax returns, even if they
are reinvested in additional shares. Because interest on municipal
bonds and notes is tax-exempt for federal income tax purposes, any
interest on borrowed money used directly or indirectly to purchase
shares is not deductible on your federal income tax return. You
should consult a tax adviser regarding its deductibility for state
and local income tax purposes.
Your Taxpayer Identification Number (TIN) is important. As with
any financial account you open, you must list your current and
correct Taxpayer Identification Number (TIN) -- either your Social
Security or Employer Identification number. The TIN must be
certified under penalties of perjury on your application when you
open an account at IDS.
If you don't provide the TIN to IDS, or the TIN you report is
incorrect, you could be subject to backup withholding of 31% of
taxable distributions and proceeds from certain sales and
exchanges. You also could be subject to further penalties, such
as:
o a $50 penalty for each failure to supply your correct TIN
o a civil penalty of $500 if you make a false statement that
results in no backup withholding
o criminal penalties for falsifying information.
You also could be subject to backup withholding because you failed
to report interest or dividends on your tax return as required.
<TABLE>
<CAPTION>
How to determine the correct TIN Use the Social Security or
For this type of account: Employer Identification number
of:
<C> <C>
Individual or joint account The individual or first person
listed on the account
Custodian account of a minor The minor
(Uniform Gift/Transfer to Minors
Act)
A living trust The grantor-trustee (the person
who puts the money into the
trust)</TABLE>
<PAGE>
PAGE 16
<TABLE>
<CAPTION>
<C> <C>
An irrevocable trust, pension The legal entity (not the
trust or estate personal representative or
trustee, unless no legal entity
is designated in the account
title)
Sole proprietorship or The owner or partnership
partnership
Corporate The corporation
Association, club or The organization
tax-exempt organization
</TABLE>
For details on TIN requirements, ask your financial planner or
local IDS office for federal Form W-9, "Request for Taxpayer
Identification Number and Certification."
Important: This information is a brief and selective summary of
certain federal tax rules that apply to this fund. Tax matters are
highly individual and complex, and you should consult a qualified
tax adviser about your personal situation.
Investment policies
Under normal market conditions, the fund will invest at least 80%
of its net assets in short-term debt securities whose interest, in
the opinion of bond counsel to the issuer, is wholly exempt from
federal income tax. The fund does not intend to purchase bonds or
notes the interest from which is subject to the alternative minimum
tax. The fund will maintain a dollar-weighted average portfolio
maturity of 90 days or less and will not purchase any security with
a remaining maturity of more than 13 months.
The various types of investments the portfolio manager uses to
achieve investment performance are described in more detail in the
next section and in the SAI.
Facts about investments and their risks
Short-term debt securities: The fund invests only in short-term
debt securities the portfolio manager believes present minimal
credit risk. These securities must be rated in one of the two
highest categories by national rating services.
Short-term debt securities include variable rate instruments and
floating rate instruments, which provide for the periodic
adjustment of interest rates so that the market value approximates
the face amount, securities subject to puts to shorten maturities,
securities with a series of maturity dates, securities placed in
escrow to refund other issues when they become refundable and
municipal lease obligations.
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PAGE 17
The fund may invest up to 25% of its net assets in each of the
following: securities whose issuers are located in the same state;
securities paid from revenues of similar types of enterprises; and
industrial revenue bonds. In such circumstances, economic,
business, political or other changes affecting one bond might also
affect other bonds. This could increase market risk.
Money market instruments: If suitable tax-exempt securities are
not available, the fund may invest up to 20% of its net assets in
certain taxable investments. They include short-term government
securities, bank obligations, commercial paper and repurchase
agreements. The interest earned on these investments is not exempt
from federal income taxes. There also may be occasions when, as a
result of maturities of portfolio securities, heavy sales of fund
shares, or anticipated redemption requests, the fund may hold cash
that is not invested.
Securities that are illiquid: Illiquid means the security cannot
be sold quickly in the normal course of business. No more than 10%
of the fund's net assets will be held in illiquid securities. In
determining the liquidity of municipal lease obligations, the
investment manager, under guidelines established by the board of
directors, will consider the essential nature of the lease
property, the likelihood the municipality will continue
appropriating monies to pay for the leased property, other relevant
factors and the marketability of the obligation.
The investment policies described above, except for the policies
concerning the type and amount of tax-free investments to be held
by the fund, may be changed by the board of directors.
Valuing assets
The portfolio securities are valued at amortized cost, which
approximates market value, as explained in the SAI. Although the
fund cannot guarantee it will always be able to maintain a constant
net asset value of $1 per share, it will use its best efforts to do
so.
How the fund is organized
The fund is a diversified, open-end management investment company,
as defined in the Investment Company Act of 1940. Originally
incorporated on Feb. 29, 1980 in Nevada, the fund changed its state
of incorporation on June 13, 1986 by merging into a Minnesota
corporation incorporated on April 7, 1986. The fund headquarters
are at 901 S. Marquette Ave., Suite 2810, Minneapolis, MN 55402-
3268.
Shares
The fund is owned by its shareholders. All shares issued by the
fund are of the same class -- capital stock. Par value is 1 cent
per share. Both full and fractional shares can be issued.
The fund no longer issues stock certificates.
<PAGE>
PAGE 18
Voting rights
As a shareholder, you have voting rights over the fund's management
and fundamental policies. You are entitled to one vote for each
share you own.
Shareholder meetings
The fund does not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors.
Directors and officers
Shareholders elect a board of directors who oversee the operations
of the fund and choose its officers. Its officers are responsible
for day-to-day business decisions based on policies set by the
board. The board has named an executive committee that has
authority to act on its behalf between meetings. The directors
also serve on the boards of all of the other funds in the IDS
MUTUAL FUND GROUP, except for Mr. Dudley, who is a director of all
publicly offered funds.
Directors and officers of the fund
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
Independent directors
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer, Minnesota Mining and
Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
<PAGE>
PAGE 19
Interested directors who are partners in law firms that have
represented IDS subsidiaries
Anne P. Jones
Partner, law firm of Sutherland, Asbill & Brennan.
Aulana L. Peters
Partner, law firm of Gibson, Dunn & Crutcher.
Interested directors who are officers and/or employees of IDS
William H. Dudley
Executive vice president, IDS.
David R. Hubers
President and chief executive officer, IDS.
John R. Thomas
Senior vice president, IDS.
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
Refer to the SAI for the directors' and officers' biographies.
Investment manager and transfer agent
The fund pays IDS for managing its portfolio, providing
administrative services and serving as transfer agent (handling
shareholder accounts).
Under its Investment Management and Services Agreement, IDS
determines which securities will be purchased, held or sold
(subject to the direction and control of the fund's board of
directors). For these services the fund pays IDS a fee based on
the fund's daily net assets, as follows:
Daily Annual
Net Assets fee
First $1 billion 0.34%
Each additional Decreasing
$0.5 billion percentages
More than $2.5 billion 0.26%
For the year ended Dec. 31, 1993, the fund paid IDS a total
investment management fee of 0.34% of its average daily net assets.
Under the Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses.
<PAGE>
PAGE 20
In addition, under a separate Transfer Agency Agreement, IDS
maintains shareholder accounts and records. The fund pays IDS an
annual fee of $24 per shareholder account for this service.
Distributor
The fund sells shares at net asset value through IDS Financial
Services Inc., a wholly owned subsidiary of IDS, under a
Distribution Agreement. Financial planners representing IDS
Financial Services Inc. provide information to investors about
individual investment programs, the fund and its operations, new
account applications, exchange and redemption requests.
To help defray costs, including costs for marketing, sales
administration, training, overhead, direct marketing programs,
advertising and related functions, the fund pays IDS a 12b-1 fee.
This fee is paid under a Plan and Supplemental Agreement of
Distribution that follows the terms of Rule 12b-1 of the Investment
Company Act of 1940 (and a Securities and Exchange Commission
order). Under this Agreement, the fund pays IDS $6 per shareholder
account per year. The total 12b-1 fee paid by the fund for the
year ended Dec. 31, 1993 was 0.04% of its average daily net assets.
This fee will not cover all of the costs incurred by IDS.
Total management and distribution fees and expenses paid by the
fund in the year ended Dec. 31, 1993 were 0.68% of its average
daily net assets.
Total fees and expenses (excluding taxes and brokerage commissions)
cannot exceed the most restrictive applicable state expense
limitation.
About IDS
General information
The IDS family of companies offers not only mutual funds but also
insurance, annuities, investment certificates and a broad range of
financial management services.
Besides managing investments for all publicly offered funds in the
IDS MUTUAL FUND GROUP, IDS also manages investments for itself and
its subsidiaries, IDS Certificate Company and IDS Life Insurance
Company. Total assets under management on Dec. 31, 1993 were more
than $99 billion.
IDS Financial Services Inc. serves individuals and businesses
through its nationwide network of more than 175 offices and more
than 7500 planners.
Other IDS subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.
<PAGE>
PAGE 21
IDS is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is
a wholly owned subsidiary of American Express Company, a financial
services company with headquarters at American Express Tower, World
Financial Center, New York, NY 10285. The fund may pay brokerage
commissions to broker-dealer affiliates of American Express and
IDS.<PAGE>
PAGE 22
Appendix A
1994 Federal Tax-Exempt and Taxable Equivalent Yield Calculation
These tables will help you determine your federal taxable yields
equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATE.
Using your Taxable Income and Adjusted Gross Income figures as
guides you can locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income
range in the left-hand column. Then, locate your Adjusted Gross
Income at the top of the chart. At the point where your Taxable
Income line meets your Adjusted Gross Income column the percentage
indicated is an approximation of your Marginal Tax Rate. For
example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjustable gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in
the $91,850-$140,000 range. Under Adjusted Gross Income, $175,000
is in the $167,700 to $290,200 column. The Taxable Income line and
Adjusted Gross Income column meet at 33.15 percent. This is the
rate you'll use in Step 2.
<TABLE>
<CAPTION> ADJUSTED GROSS INCOME*
________________________________________________________
TAXABLE INCOME** $0 $111,800 $167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
___________________________________________________________________________________________
Married Filing Jointly
<S> <C> <C> <C> <C>
$ 0 - $ 38,000 15.00%
38,000 - 91,850 28.00 28.84%
91,850 - 140,000 31.00 31.93 33.15%
140,000 - 250,000 36.00 37.08 38.49 37.08%
250,000 + 39.60 42.34*** 40.79
___________________________________________________________________________________________
________________________________________________________
$0 $111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
___________________________________________________________________________________________
Single
$ 0 - $ 22,750 15.00%
22,750 - 55,100 28.00
55,100 - 115,000 31.00 32.54%
115,000 - 250,000 36.00 37.79 37.08%
250,000 + 39.60 40.79
____________________________________________________________________________________________
*Gross income with certain adjustments before taking itemized deductions and personal
exemptions.
**Amount subject to federal income tax after itemized deductions and personal exemptions.
***This rate is applicable only in the limited case where your adjusted gross income is less
than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal exemptions.
(2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal exemption and
joint taxpayers have two personal exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer has
one personal exemption, joint taxpayers have two personal exemptions and itemized deductions
continue to phase-out./TABLE
<PAGE>
PAGE 23
If these assumptions do not apply to you, it will be necessary to
construct your own personalized tax equivalency table.
___________________________________________________________________
STEP 2: DETERMINING YOUR FEDERAL TAXABLE YIELD EQUIVALENTS
Using 33.15 percent, you may determine that a tax-exempt yield of 3
percent is equivalent to earning a taxable 4.49 percent yield.
<TABLE>
<CAPTION>
For these Tax-Exempt Rates:
____________________________________________________________________________________
1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%
____________________________________________________________________________________
Marginal Tax Rates Equal the Taxable Rates shown below:
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15.00% 1.18% 1.76% 2.35% 2.94% 3.53% 4.12% 4.71% 5.29%
28.00% 1.39 2.08 2.78 3.47 4.17 4.86 5.56 6.25
28.84% 1.41 2.11 2.81 3.51 4.22 4.92 5.62 6.32
31.00% 1.45 2.17 2.90 3.62 4.35 5.07 5.80 6.52
31.93% 1.47 2.20 2.94 3.67 4.41 5.14 5.88 6.61
32.54% 1.48 2.22 2.96 3.71 4.45 5.19 5.93 6.67
33.15% 1.50 2.24 2.99 3.74 4.49 5.24 5.98 6.73
36.00% 1.56 2.34 3.13 3.91 4.69 5.47 6.25 7.03
37.08% 1.59 2.38 3.18 3.97 4.77 5.56 6.36 7.15
37.79% 1.61 2.41 3.21 4.02 4.82 5.63 6.43 7.23
38.49% 1.63 2.44 3.25 4.06 4.88 5.69 6.50 7.32
39.60% 1.66 2.48 3.31 4.14 4.97 5.79 6.62 7.45
40.79% 1.69 2.53 3.38 4.22 5.07 5.91 6.76 7.60
42.34% 1.73 2.60 3.47 4.34 5.20 6.07 6.94 7.80
_________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 24
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS TAX-FREE MONEY FUND
March 1, 1994
This Statement of Additional Information (SAI) is not a prospectus.
It should be read together with the fund's prospectus and the
financial statements contained in the fund's Annual Report which
may be obtained from your IDS personal financial planner or by
writing to IDS Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534.
This SAI is dated March 1, 1994, and it is to be used with the
fund's prospectus dated March 1, 1994, and the fund's Annual Report
for the year ended Dec. 31, 1993.
<PAGE>
PAGE 25
TABLE OF CONTENTS
Goal and Investment Policies......................See Prospectus
Additional Investment Policies................................p. 3
Portfolio Transactions........................................p. 5
Performance Information.......................................p. 6
Valuing Fund Shares...........................................p. 7
Investing in the Fund.........................................p. 8
Redeeming Shares..............................................p. 9
Pay-out Plans.................................................p. 11
Taxes.........................................................p. 12
Agreements....................................................p. 13
Directors and Officers........................................p. 15
Custodian.....................................................p. 18
Independent Auditors..........................................p. 18
Financial Statements.............................See Annual Report
Prospectus....................................................p. 18
Appendix A: Description of Bond and Note Ratings.............p. 19
Appendix B: Description of Short-Term Taxable Securities
and Repurchase Agreements........................p. 21
Appendix C: Dollar-Cost Averaging............................p. 23
<PAGE>
PAGE 26
ADDITIONAL INVESTMENT POLICIES
These are investment policies in addition to those presented in the
prospectus. Unless holders of a majority of the outstanding shares
agree to make the change the fund will not:
'Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities, and except that up to 25% of the fund's total
assets may be invested without regard to this 5% limitation. For
purposes of this policy, the terms of a municipal security
determine the issuer.
'Buy on margin or sell short.
'Pledge or mortgage its assets beyond 15% of the cost of total
assets.
'Borrow money or property, except as a temporary measure for
extraordinary or emergency purposes, in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The fund has not borrowed in the past and has
no present intention to borrow.
'Make cash loans. The fund, however, does make investments in debt
securities where the sellers agree to repurchase the securities at
cost plus an agreed-upon interest rate within a specified period of
time.
'Invest in real estate, but the fund can invest in municipal bonds
and notes secured by real estate or interests therein.
'Act as an underwriter (sell securities for others). However,
under the securities laws, the fund may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
'Invest more than 5% of its total assets, at cost, in securities
whose issuers or guarantors of principal and interest have been in
continuous operation for less than three years.
'Invest in voting securities, securities of investment companies,
or exploration or development programs, such as oil, gas or mineral
programs.
'Invest in commodities or commodity contracts.
'Lend portfolio securities in excess of 30% of its net assets, at
market value. This policy may not be changed without shareholder
approval. The current policy of the fund's board of directors is
to make these loans, either long- or short-term, to broker-dealers.<PAGE>
PAGE 27
In making such loans the fund gets the market price in cash, U.S.
government securities, letters of credit or such other collateral
as may be permitted by regulatory agencies and approved by the
board of directors. If the market price of the loaned securities
goes up, the fund will get additional collateral on a daily basis.
The risks are that the borrower may not provide additional
collateral when required or return the securities when due. During
the existence of the loan, the fund receives cash payments
equivalent to all interest or other distributions paid on the
loaned securities. A loan will not be made unless the investment
manager believes the opportunity for additional income outweighs
the risks.
Unless changed by the board of directors, the fund will not:
'Invest in illiquid securities and derivative instruments if,
immediately after making such an investment, more than 10% of the
fund's net assets, at market, would be invested in such securities.
In determining the liquidity of municipal lease obligations, the
investment manager, under guidelines established by the board of
directors, will consider the essential nature of the lease
property, the likelihood that the municipality will continue
appropriating funding for the leased property, and other relevant
factors related to the general credit quality of the municipality
and the marketability of the municipal lease obligation.
Unless the board establishes guidelines to determine liquidity this
fund will not invest in commercial paper issued in transactions not
involving a public offering under Section 4(2) of the Securities
Act of 1933 (4(2) paper). Under the guidelines the investment
manager will evaluate relevant factors such as the issuer and the
size and nature of its commercial paper programs, the willingness
and ability of the issuer or dealer to repurchase the paper, and
the nature of the clearance and settlement procedures for the
paper.
The quality of tax-exempt securities in which the fund invests is
valued according to the amortized cost method (see "Valuing Fund
Shares"). If the fund should decide at some point it is no longer
appropriate to value its portfolio according to amortized cost,
then at least 80% of the value of the municipal bonds and municipal
notes in the fund's portfolio may be issues that have been rated at
the time of purchase not lower than Baa or MIG-3 (applicable to
municipal notes) by Moody's Investors Service, Inc. (Moody's), or
BBB by Standard & Poor's Corporation (S&P), or in the case of notes
that have not been rated, will have been issued by an issuer having
outstanding long-term debt securities rated not lower than Baa by
Moody's or BBB by S&P. The balance of the portfolio may be in
municipal bonds and notes that may be nonrated and may be issued by
issuers whose other debt securities have not been rated. Such
investments would be considered only when the fund believes the
financial condition of the issuers limited the risks to the fund to
a degree comparable to securities rated Baa or MIG-3 (or higher) by
Moody's or BBB (or higher) by S&P. Any municipal bond or note that<PAGE>
PAGE 28
is guaranteed by the federal government will be regarded as having
a rating of Aaa (Moody's) or AAA (S&P). See Appendix A for a
description of bond and note ratings.
In addition to considering ratings assigned by the ratings services
in the selection of portfolio securities for the fund, the fund may
consider, among other things, information concerning the financial
history and condition of the issuer and its revenue and expense
prospect and, in the case of revenue bonds, the financial history
and condition of the source of revenue to service the bonds.
After a municipal bond or note has been purchased by the fund, it
may be assigned a lower rating or cease to be rated. Such an event
would not require the elimination of the issue from the portfolio,
but the fund will consider such an event in determining whether the
fund should continue to hold the security in its portfolio.
Yields on municipal bonds and notes depend on a variety of factors,
including money market conditions, municipal bond market
conditions, the size of a particular offering, the maturity of the
obligation, and the rating of the issue. The market in municipal
bonds and notes is not comparable to the market in taxable money
market instruments in terms of liquidity and stability of
principal. This is because the market in municipal bonds and notes
is not as broad, does not offer as much choice in maturities, and
has fewer issuers.
For a description on short-term taxable securities in which the
fund may invest, see Appendix B.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board of directors, IDS Financial
Corporation (IDS) is authorized to determine, consistent with the
fund's investment goal (goals) and policies, which securities will
be purchased, held or sold. In determining where the buy and sell
orders are to be placed, IDS has been directed to use its best
efforts to obtain the best available price and most favorable
execution except where otherwise authorized by the board of
directors.
Normally, the fund's securities are traded on a "principal" rather
than an "agency" basis. In other words, IDS will trade directly
with the issuer or with a dealer who buys or sells for its own
account, rather than acting on behalf of another client. IDS does
not pay the dealer commissions. Instead, the dealer's profit, if
any, is the difference, or spread, between the dealer's purchase
and sale price for the security.
Each investment decision made for the fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by IDS or any IDS subsidiary. When
the fund buys or sells the same security as another fund or
account, IDS carries out the purchase or sale in a way the fund<PAGE>
PAGE 29
agrees in advance is fair. Although sharing in large transactions
may affect the price or volume purchased or sold by the fund
adversely, the fund hopes to gain an overall advantage in
execution.
The fund acquired no securities of its regular brokers or dealers
or of the parents of those brokers or dealers that derived more
than 15% of gross revenue from securities related activities during
the year ended Dec. 31, 1993.
PERFORMANCE INFORMATION
The fund may quote various performance figures to illustrate past
performance. An explanation of the methods used by the fund to
compute performance follows below.
Average annual total return
The fund may calculate average annual total return for certain
periods by finding the average annual compounded rates of return
over the period that would equate the initial amount invested to
the ending redeemable value, according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
Aggregate total return
The fund may calculate aggregate total return for certain periods
representing the cumulative change in the value of an investment in
the fund over a specified period of time according to the following
formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
Annualized yield
The fund calculates annualized simple and compound yields based on
a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical account having a balance of one share at<PAGE>
PAGE 30
the beginning of the seven-day period, dividing the net change in
account value by the value of the account at the beginning of the
period to obtain the return for the period, and multiplying that
return by 365/7 to obtain an annualized figure. The value of the
hypothetical account includes the amount of any declared dividends,
the value of any shares purchased with any dividend paid during the
period and any dividends declared for such shares. The fund's
yield does not include any realized or unrealized gains or losses.
The fund calculates its compound yield according to the following
formula:
Compound Yield = (return for seven-day period + 1) 365/7 - 1
The fund's simple annualized yield was 2.48% and its compound yield
was 2.51% on Dec. 31, 1993.
Yield, or rate of return, on fund shares may fluctuate daily and
does not provide a basis for determining future yields. However,
it may be used as one element in assessing how the fund is meeting
its goal. When comparing an investment in the fund with savings
accounts and similar investment alternatives, you must consider
that such alternatives often provide an agreed to or guaranteed
fixed yield for a stated period of time, whereas the fund's yield
fluctuates. In comparing the yield of one money market fund to
another, you should consider each fund's investment policies,
including the types of investments permitted.
In its sales material and other communications, the fund may quote,
compare or refer to rankings, yields or returns as published by
independent statistical services or publishers and publications
such as The Bank Rate Monitor National Index, Barron's, Business
Week, Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The fund values its securities as follows: All of the securities
in the fund's portfolio (including those readily marketable assets
designated to cover commitments to buy when-issued securities) are
valued at amortized cost. The amortized cost method of valuation
is an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or reducing the carrying value if acquired at a premium,
so that the carrying value is equal to maturity value on the
maturity date. It does not take into consideration unrealized
capital gains or losses.
<PAGE>
PAGE 31
The board of directors has established procedures designed to
stabilize the fund's price per share for purposes of sales and
redemptions at $1, to the extent that it is reasonably possible to
do so. These procedures include review of the fund's portfolio
securities by the board, at intervals deemed appropriate by it, to
determine whether the fund's net asset value per share computed by
using available market quotations deviates from a share value of $1
as computed using the amortized cost method. The board must
consider any deviation that appears and if it exceeds 0.5% it must
determine what action, if any, needs to be taken. If the board
determines a deviation exists that may result in a material
dilution of the holdings of current shareholders or investors, or
in other unfair consequences for such persons, it must undertake
remedial action that it deems necessary and appropriate. Such
action may include withholding dividends, calculating net asset
value per share for purposes of sales and redemptions using
available market quotations, making redemptions in kind, and
selling portfolio securities before maturity in order to realize
capital gains or losses or to shorten average portfolio maturity.
While the amortized cost method provides certainty and consistency
in portfolio valuation, it may result in valuations of portfolio
securities that are either somewhat higher or lower than the prices
at which the securities could be sold. This means that during
times of declining interest rates the yield on the fund's shares
may be higher than if valuations of portfolio securities were made
based on actual market prices and estimates of market prices.
Accordingly, if using the amortized cost method were to result in a
lower portfolio value, a prospective investor in the fund would be
able to obtain a somewhat higher yield than he would get if
portfolio valuation were based on actual market values. Existing
shareholders, on the other hand, would receive a somewhat lower
yield than they would otherwise receive. The opposite would happen
during a period of rising interest rates.
The New York Stock Exchange, IDS and the fund will be closed on the
following holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
INVESTING IN THE FUND
The minimum purchase for directors, officers and employees of the
fund or IDS and IDS financial planners is $1000 (except payroll
deduction plans), with a minimum additional purchase of $25.
Systematic Investment Programs
After you make your initial investment of $2,000 or more, you can
arrange to make additional payments of $100 or more on a regular
basis. These minimums do not apply to all systematic investment
programs. You decide how often to make payments - monthly,
quarterly or semiannually. You are not obligated to make any
payments. You can omit payments, or discontinue the investment
program altogether. The fund also can change the program or end it<PAGE>
PAGE 32
at any time. If there is no obligation, why do it? Putting money
aside is an important part of financial planning. With a
systematic investment program, you have a goal to work for.
How does this work? When you send in your payment, your money is
invested at the net asset value. Each purchase is a separate
transaction. After each purchase your new shares will be added to
your account. Shares bought through these programs are exactly the
same as any other fund shares. They can be bought and sold at any
time. A systematic investment program is not an option or an
absolute right to buy shares.
For a discussion on dollar-cost averaging see appendix C.
Automatic Directed Dividends
Dividends, including capital gain distributions, paid by another
fund in the IDS MUTUAL FUND GROUP may be used to automatically
purchase shares of a fund. Dividends may be directed to existing
accounts only. Dividends declared by a fund are exchanged to this
fund the following day. Dividends can be exchanged into one fund
but cannot be split to make purchases in two or more funds.
Automatic directed dividends are available between accounts of any
ownership except:
'Between a non-custodial account and an IRA, or 401(k) plan account
or other qualified retirement account of which IDS Bank & Trust
acts as custodian;
'Between two IDS Bank & Trust custodial accounts with different
owners (for example, you may not exchange dividends from your IRA
to the IRA of your spouse);
'Between different kinds of custodial accounts with the same
ownership (for example, you may not exchange dividends from your
IRA to your 401(k) plan account, although you may exchange
dividends from one IRA to another IRA).
Moreover, dividends may be directed from accounts established under
the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to
Minors Act (UTMA) only into other UGMA or UTMA accounts with
identical ownership.
Each fund has a different investment goal described in its
prospectus along with other information, including fees and expense
ratios. Before exchanging dividends into another fund, you should
read its prospectus. You will receive a confirmation that the
automatic directed dividend service has been set up for your
account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.<PAGE>
PAGE 33
Drafts: Drafts should be requested by registered owners only. The
number of signatures required for payment of a draft may vary by
account ownership. Drafts should be used like checks, but should
not be sent directly to the Minneapolis headquarters to be cashed.
When the draft is accepted by the fund through the banking system,
shares will be redeemed from your account. In order to qualify for
this service, all shares must be held in non-certificate form. If
the account is not large enough to cover a draft, it will be
dishonored and returned marked "insufficient funds." Drafts
written on purchases made with non-guaranteed funds not yet 10 days
old will not be honored in most cases. The draft writing privilege
may be modified or terminated at any time. It may not always be
possible to give all shareholders advance notification of each
change in the draft writing privilege.
Telephone Redemptions: Records maintained by IDS will be binding
on all parties. Neither IDS nor the fund will be liable for any
loss, expense or damage arising in connection with telephone
redemption requests. In order to qualify for this service, all
shares must be held in non-certificate form.
The requesting registered owner must be prepared to provide
sufficient information to enable IDS to verify the authenticity of
the call and to process the redemption request. All telephone
calls will be recorded. Redemption requests received before the
close of business (normally 3 p.m. Central time) will be processed
the same day. For each redemption, a number of shares equal to the
amount of the requested redemption will be redeemed. The following
business day, the redemption proceeds will be mailed to the address
of record or transmitted by Federal Reserve Wire to the bank
account designated on the telephone authorization form, provided
IDS, the fund, Norwest Bank Minneapolis and your bank are all open.
At the present time there is no additional fee charged for the wire
service, but if such a fee is imposed in the future, an additional
number of shares will be redeemed to cover it.
The telephone redemption privilege may be modified or discontinued
at any time. It may not always be possible to give all
shareholders advance notice of each change in the procedures for
telephone redemptions.
During an emergency, the board of directors can suspend computation
of the net asset value, stop accepting payments for purchase of
shares or suspend the duty of the fund to redeem shares for more
than seven days. Such emergency situations would occur if:
'The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings or trading on the Exchange is
restricted, or
'Disposal of the fund's securities is not reasonably practicable,
or it is not reasonably practicable for the fund to determine the
fair value of its net assets, or
<PAGE>
PAGE 34
'The Securities and Exchange Commission, under the provisions of
the Investment Company Act of 1940, declares a period of emergency
to exist.
Should the fund stop selling shares, the directors may make a
deduction from the value of the assets held by the fund to cover
the cost of future liquidations of the assets so as to distribute
fairly these costs among all shareholders.
PAY-OUT PLANS
You can use any of several pay-out plans to redeem your investment
in regular installments at no extra cost. While the plans differ
on how the pay-out is figured, they all are based on redemption of
your investment. Net investment income dividends and any capital
gain distributions will automatically be reinvested, unless you
elect to receive them in cash.
To start any of these plans, submit an authorization form supplied
by IDS Shareholder Service. For a copy, write or call IDS
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534, 612-
671-3733. Your authorization must be received in the Minneapolis
headquarters at least five days before the date you want your
payments to begin. The initial payment must be at least $50.
Payments will be made on a monthly, bimonthly, quarterly,
semiannual or annual basis. Your choice is effective until you
change or cancel it.
The following pay-out plans are designed to take care of the needs
of most shareholders in a way IDS can handle efficiently and at a
reasonable cost. If you need a more irregular schedule of
payments, it may be necessary for you to make a series of
individual redemptions, in which case you will have to send in a
separate redemption request for each pay-out. The fund reserves
the right to change or stop any pay-out plan and to stop making
such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be
redeemed at regular intervals during the time period you choose.
This plan is designed to end in complete redemption of all shares
in your account by the end of the fixed period.
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed
for each payment and that amount will be sent to you. The length
of time these payments continue is based on the number of shares in
your account.
<PAGE>
PAGE 35
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares
is necessary to make the payment will be redeemed in regular
installments until your account is closed.
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset
value of the shares in your account computed on the day of each
payment. Percentages range from 0.25% to 0.75%. For example, if
you are on this plan and arrange to take 0.5% each month you will
get $50 if the value of your account is $10,000 on the payment
date.
TAXES
All distributions of net investment income during the year will
have the same percentage designated as tax-exempt. This annual
percentage is expected to be substantially the same as the
percentage of tax-exempt income actually earned during any
particular distribution period. For the year ended Dec. 31, 1993,
100% of the income distribution was designated as exempt from
federal income taxes.
If you are a "substantial user" (or related person) of facilities
financed by industrial development bonds, you should consult your
tax adviser before investing. The income from such bonds may not
be tax-exempt for you.
State law determines whether interest income on a particular
municipal bond or note is tax-exempt for state tax purposes. It
also determines the tax treatment of those bonds and notes when
earned by a mutual fund and paid to the fund's shareholders. The
fund will tell you the percentage of interest income from municipal
bonds and notes it received during the year on a state-by-state
basis. Your tax adviser should help you report this income for
state tax purposes.
Under federal tax law and an election made by the fund under
federal tax regulations, by the end of a calendar year the fund
must declare and pay dividends representing 98% of ordinary income
through Dec. 31 and 98% of net capital gains (both long-term and
short-term) for the 12-month period ending Dec. 31 of that calendar
year. The fund is subject to an excise tax equal to 4% of the
excess, if any, of the amount required to be distributed over the
amount actually distributed. The fund intends to comply with
federal tax law and avoid any excise tax.
This is a brief summary that relates to federal income taxation
only. Shareholders should consult their tax adviser for more
complete information as to the application of federal, state and
local income tax laws to fund distributions.
<PAGE>
PAGE 36
AGREEMENTS
Investment Management and Services Agreement
The fund has an Investment Management and Services Agreement with
IDS. The fee is based on the following schedule:
Annual rate Effective
Group assets at each annual
(billions) asset level rate
First $1.0 0.34% 0.340%
Next 0.5 0.32 0.333
Next 0.5 0.30 0.325
Next 0.5 0.28 0.316
Thereafter 0.26
The total fee is calculated for each calendar day on the basis of
the net assets of the fund as of the close of business of the full
business day, which is two business days prior to the day for which
the calculation is being made. In the case of the suspension of
the computation of net asset value, the fee for each day during the
suspension shall be computed as of the close of business on the
last full business day on which the net assets were computed.
The management fee is paid monthly. The amount paid was $425,170
for the year ended Dec. 31, 1993, $506,236 for 1992, and $780,760
for 1993.
Under the current Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses, that include custodian fees;
audit and certain legal fees; fidelity bond premiums; registration
fees for shares; fund office expenses; consultants' fees;
compensation of directors, officers and employees; corporate filing
fees; Investment Company Institute dues; organizational expenses;
expenses incurred in connection with lending portfolio securities
of the fund; and expenses properly payable by the fund, approved by
the board of directors. The fund paid nonadvisory expenses of
$162,502 for the year ended Dec. 31, 1993, $152,446 for 1992, and
$159,874 for 1991.
Transfer Agency Agreement
The fund has a Transfer Agency Agreement with IDS. This agreement
governs IDS' responsibility for administering and/or performing
transfer agent functions, for acting as service agent in connection
with dividend and distribution functions and for performing
shareholder account administration agent functions in connection
with the issuance, exchange and redemption or repurchase of the
fund's shares. Under the agreement, IDS will earn a fee from the
fund determined by multiplying the number of shareholder accounts
at the end of the day by a rate of $24 per year and dividing by the
number of days in the year. The fees paid to IDS may be changed
from time to time upon agreement of the parties without shareholder<PAGE>
PAGE 37
approval. The fund paid fees of $213,262 for the year ended Dec.
31, 1993.
Distribution Agreement
For an explanation of the fund's Distribution Agreement, please see
your prospectus.
Additional information about commissions and compensation for the
last year is contained in the following table:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Underwriter Commissions Repurchases Commissions Compensation
<C> <C> <C> <C> <C>
IDS None None None $55,052*
*Distribution fees paid pursuant to the Plan and Agreement of Distribution.
</TABLE>
Plan and Supplemental Agreement of Distribution
To help IDS defray the cost of distribution and servicing, the fund
and IDS entered into a Plan and Supplemental Agreement of
Distribution (Plan). These costs relate to most aspects of
distributing the fund shares except compensation to the sales
force. A substantial portion of the costs are not specifically
identified to any one fund in the IDS MUTUAL FUND GROUP. Under the
Plan, IDS is paid a fee determined by multiplying the number of
shareholder accounts at the end of each day by a rate of $6 per
year and dividing by the number of days in the year.
The Plan must be approved annually by the directors, including a
majority of the disinterested directors, if it is to continue for
more than a year. At least quarterly, the directors must review
written reports concerning the amounts expended under the Plan and
the purposes for which such expenditures were made. The Plan and
any agreement related to it may be terminated at any time by vote
of a majority of the directors who are not interested persons of
the fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, or
by vote of a majority of the outstanding voting securities of the
fund or by IDS. The Plan (or any agreement related to it) shall
terminate in the event of its assignment as that term is defined in
the Investment Company Act of 1940, as amended. The Plan may not
be amended to increase the amount to be spent for distribution
without shareholder approval, and all material amendments to the
Plan must be approved by a majority of the directors, including a
majority of the directors who are not interested persons of the
fund and who do not have a financial interest in the operation of
the Plan or any agreement related to it. The selection and<PAGE>
PAGE 38
nomination of such disinterested directors is the responsibility of
such disinterested directors. No interested person of the fund,
and no director who is not an interested person, has any direct or
indirect financial interest in the operation of the Plan or any
related agreement.
Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5% of the first $30 million of
the fund's average daily net assets, 2% of the next $70 million and
1.5% of average daily net assets over $100 million, on an annual
basis. At the end of each month, if the fees and expenses of the
fund exceed this limitation for the fund's fiscal year in progress,
IDS will assume all expenses in excess of the limitation. IDS then
may bill the fund for such expenses in subsequent months up to the
end of that fiscal year, but not after that date. No interest
charges are assessed by IDS for expenses it assumes.
DIRECTORS AND OFFICERS
The following is a list of the fund's directors who, except for Mr.
Dudley, also are directors of all other funds in the IDS MUTUAL
FUND GROUP. Mr. Dudley is a director of all publicly offered
funds. All shares have cumulative voting rights when voting on the
election of directors.
William H. Dudley**
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of IDS.
Robert F. Froehlke+
901 S. Marquette Ave.
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectual
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
David R. Hubers**
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of IDS.
Previously, senior vice president, finance and chief financial
officer of IDS.
<PAGE>
PAGE 39
Anne P. Jones***
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., N.W.
Washington, D.C.
Partner, law firm of Sutherland, Asbill & Brennan. Director,
Motorola, Inc. and C-Cor Electronics, Inc.
Donald M. Kendall
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
Director, Atlantic Richfield Company.
Melvin R. Laird
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
Inc., Science Applications International Corp., Wallace Reader's
Digest funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
Lewis W. Lehr'
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
William R. Pearce+*
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
Aulana L. Peters'***
Gibson, Dunn & Crutcher
333 S. Grand Ave.
Los Angeles, CA
Partner, law firm of Gibson, Dunn & Crutcher from January 1980 to
May 1984 and since August 1988. Commissioner, Securities and
Exchange Commission from June 1984 to July 1988. Director,<PAGE>
PAGE 40
American Institute of CPA's (accounting), Minnesota Mining and
Manufacturing Company (3M), Mobil Corporation (energy), New York
Stock Exchange and Northrop Corporation (defense).
Edson W. Spencer+'
840 TCF Tower
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell, Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
John R. Thomas+**
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of IDS.
Wheelock Whitney+
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the fund.
**Interested person by reason of being an officer, director,
employee and/or shareholder of IDS or American Express.
***Interested person by reason of being a partner in a law firm
that has represented IDS or its subsidiaries.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
Besides Mr. Pearce, who is president, the fund's other officer is:
Leslie L. Ogg
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
On Dec. 31, 1993, the fund's directors and officers as a group
owned less than 1% of the outstanding shares. During the fiscal
year ended Dec. 31, 1993, no director or officer earned more than
$60,000 from this fund. All directors and officers as a group
earned $18,775, including $4,707 of retirement plan expense, from
this fund.
<PAGE>
PAGE 41
CUSTODIAN
The fund's securities and cash are held by First Bank National
Association, 180 E. Fifth St., St. Paul, MN 55101-1631, through a
custodian agreement. The custodian is permitted to deposit some or
all of its securities in central depository systems as allowed by
federal law.
INDEPENDENT AUDITORS
The funds' financial statements contained in its Annual Report to
shareholders, for the year ended Dec. 31, 1993, were audited by
independent auditors, KPMG Peat Marwick, 4200 Norwest Center, 90 S.
Seventh St., Minneapolis, MN 55402-3900. The independent auditors
also provide other accounting and tax-related services as requested
by the funds.
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1993 Annual Report to
IDS Tax-Free Money Fund, shareholders, pursuant to Section 30(d) of
the Investment Company Act of 1940, as amended, are hereby
incorporated in this SAI by reference. No other portion of the
Annual Report, however, is incorporated by reference.
PROSPECTUS
The prospectus dated March 1, 1993, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 42
APPENDIX A
DESCRIPTION OF BOND AND NOTE RATINGS
The ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. The four highest ratings by Moody's Investors Service,
Inc. are Aaa, Aa, A and Baa. The four highest by Standard & Poor's
Corporation are AAA, AA, A and BBB.
Bonds rated Aaa or AAA are judged to be of the best quality.
Interest and principal are secure. Prices are responsive only to
interest rate fluctuations.
Bonds rated Aa or AA are also judged to be high-grade although
margins of protection for interest and principal may not be quite
as good as Aaa- or AAA-rated securities. Long-term risk may appear
greater than the Aaa or AAA group. Prices are primarily responsive
to interest rate fluctuations.
Bonds rated A are considered upper-medium grade. Protection for
interest and principal is deemed adequate but susceptible to future
impairment. The market prices of such obligations move primarily
with interest rate fluctuations but also with changing economic or
trade conditions.
Bonds rated Baa and BBB are considered medium-grade obligations.
Protection for interest and principal is adequate over the short-
term; however, these obligations have certain speculative
characteristics. They are susceptible to changing economic
conditions and require constant review. Such bonds are more
responsive to business and trade conditions than to interest rate
fluctuations.
Moody's rating for tax-exempt notes are designated "MIG" (Moody's
Investment Grade.) Notes rated MIG-1 are of the best quality,
enjoying strong protection from established cash flows or funds for
their servicing or from established and broad-based access to the
market for refinancing, or both.
Notes rated MIG-2 are of high quality, with margins of protection
ample, although not so large as in the preceding group.
Notes rated MIG-3 are of favorable quality, with all security
elements accounted for but lacking the undeniable strength of the
preceding grades. Market access for refinancing, in particular, is
likely to be less well established.
Standard & Poor's rating SP-1 on tax-exempt notes indicates very
strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics
will be given a plus (+) designation.
<PAGE>
PAGE 43
Standard & Poor's rating SP-2 indicates satisfactory capacity to
pay principal and interest.
Standard & Poor's rating SP-3 indicates speculative capacity to pay
principal and interest.
<PAGE>
PAGE 44
APPENDIX B
DESCRIPTION OF SHORT-TERM TAXABLE SECURITIES AND REPURCHASE
AGREEMENTS
Depending on market conditions, a portion of the fund's investments
may be invested in short-term taxable securities. These include:
(1) Obligations of the U.S. government, its agencies and
instrumentalities which result principally from lending programs of
the U.S. government;
(2) U.S. Treasury bills with maturities up to one year. The
difference between the purchase price and the maturity value or
resale price is the interest income to the fund;
(3) Certificates of deposit or receipts with fixed interest
rates issued by banks in exchange for deposit of funds;
(4) Banker's acceptances arising from short-term credit
arrangements designed to enable businesses to obtain funds to
finance commercial transactions;
(5) Letters of credit, which are short-term notes issued in
bearer form with a bank letter of credit obligating the bank to pay
the bearer the amount of the note;
(6) Commercial paper rated in the two highest grades by
Standard & Poor's or Moody's. Commercial paper is generally
defined as unsecured short-term notes issued in bearer form by
large well-known corporations and finance companies. These ratings
reflect a review of management, economic evaluation of the industry
competition, liquidity, long-term debt and ten-year earning trends;
Standard & Poor's Rating A-1 indicates that the degree of safety
regarding timely repayment is either overwhelming or very strong.
Standard & Poor's Rating A-2 indicates that capacity for timely
payment on issues with this designation is strong.
Moody's Rating Prime-1 (P-1) indicates a superior capacity for
repayment of short-term promissory obligations.
Moody's Rating Prime-2 (P-2) indicates a strong capacity for
repayment of short-term promissory obligations.
(7) Repurchase agreements involving acquisition of securities
by the fund with a concurrent agreement by the seller, usually a
bank or securities dealer, to reacquire the securities at cost plus
interest within a specified time. From this investment, the fund
receives a fixed rate of return that is insulated from market rate
changes while it holds the security.
<PAGE>
PAGE 45
(8) Variable rate demand notes (VRDNs), whose terms provide (1)
the fund is unconditionally entitled to obtain the amount due upon
notice of seven days or less or at specified intervals not
exceeding one year upon no more than seven days' notice, and (2)
the interest rate provisions will be such that the instrument will
have a current market value approximately equal to its face amount.
The fund will invest only in VRDNs that are in the top two ratings
by a major rating service or are of comparable quality as
determined by the board of directors. The required liquidity may
be provided by a bank letter of credit, in which event the quality
and liquidity of the issue may be determined by reference to the
bank's creditworthiness.
<PAGE>
PAGE 46
APPENDIX C
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more shares will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the
average market price of shares purchased, although there is no
guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many
shareholders who can continue investing through changing market
conditions to accumulate shares in a fund to meet long term goals.
Dollar-cost averaging
Regular Market Price Shares
Investment of a Share Acquired
$100 $ 6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4
Average market price of a share over 5 periods:
$5.00 ($25.00 divided by 5).
The average price you paid for each share:
$4.84 ($500 divided by 103.4).
<PAGE>
PAGE 47
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
<PAGE>
PAGE 48
changes in its net assets for each of the
years in the two-year period ended
December 31, 1993, and the
financialhighlights 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 49
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 50
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 51
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 52
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 53
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 54
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 55
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 56
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 57
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>
PAGE 58
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) FINANCIAL STATEMENTS:
Financial Statements filed as part of this post-effective
amendment and included in Part B.
- Independent Auditors' Report dated February 4, 1994.
- Statement of Assets and Liabilities, Dec. 31, 1993.
- Statement of Operations, Year ended Dec. 31, 1993.
- Statement of Changes in Net Assets, for the two years
ended Dec. 31, 1993.
- Notes to Financial Statements.
- Investments in Securities, Dec. 31, 1993.
- Notes to Investments in Securities.
(b) EXHIBITS
1. Copy of Articles of Incorporation as amended October 17, 1988,
filed electronically as Exhibit 1 to Post-Effective Amendment
No. 14 to Registration Statement No. 2-66868, is incorporated
herein by reference.
2. Copy of By-laws as amended January 12, 1989,filed
electronically as Exhibit 2 to Post-Effective Amendment No. 16
to Registration Statement No. 2-66868, is incorporated herein
by reference.
3. Not Applicable.
4. Copy of Stock certificate, filed as Exhibit 4 to Registrant's
Registration Statement No. 2-66868, is incorporated herein by
reference.
5. Copy of Investment Management and Services Agreement between
Registrant and IDS Financial Corporation dated Nov. 14, 1991,
filed electronically as Exhibit 5 to Post-Effective Amendment
No. 18 to Registration Statement No. 2-66868, is incorporated
herein by reference.
6. Copy of Distribution Agreement between Registrant and IDS
Financial Services Inc. dated January 1, 1987, filed
electronically as Exhibit 6 to Post-Effective Amendment No. 13
to Registration Statement No. 2-66868, is incorporated herein
by reference.
7. All employees who have attained the age 21 and completed one
year of service are eligible to participate in a thrift plan.
Entry into the plan is Jan. 1 or July 1 following completion
of the age and service requirements. The Registrant
contributes each year an amount equal to 15% of their annual
salaries, the maximum amount permitted under Section 404(a) of
the Internal Revenue Code, or up to a maximum of .08% of 1% of
the Fund's net income before income taxes and other<PAGE>
PAGE 59
adjustments. Employees of the Registrant become eligible to
participate in a retirement plan on Jan. 1, or July
1,following completion of one year of employment and
attainment of age 21. Contributions to the plan cease no
later than the time at which the participant reaches the
normal retirement age of 65.
8. Copy of Custodian Agreement, dated November 1, 1988, filed
electronically as Exhibit 8 to Post-Effective Amendment No. 15
to Registration Statement No. 2-66868, is incorporated herein
by reference.
9. (a) Copy of Plan and Agreement of Merger, dated April 10,
1986, filed electronically as Exhibit 9(a) to Post-Effective
Amendment No. 14 to Registration Statement No. 2-66868, is
incorporated herein by reference.
(b) Copy of Supplemental Transfer Agency Agreement between
Registrant and IDS Financial Corporation, date October 14,
1988, filed electronically as Exhibit 9(b) to Post-Effective
Amendment No. 14 to Registration Statement No. 2-66868, is
incorporated herein by reference.
(c) Copy of License Agreement, dated January 25, 1988, between
the Registrant and IDS Financial Corporation, filed
electronically as Exhibit 9(c) to Post-Effective Amendment No.
16 to Registration Statement No. 2-66868, is incorporated
herein by reference.
(d) Copy of Transfer Agency Agreement between Registrant and
IDS Financial Corporation dated Nov. 14, 1991, filed
electronically as Exhibit 9(d) to Post-Effective Amendment No.
18 to Registration Statement No. 2-66868, is incorporated
herein by reference.
10. Not Applicable.
11. Consent of Independent Auditor filed electronically.
12. None.
13. Not Applicable.
14. Forms of Keogh, IRA and other retirement plans, filed as
Exhibits 14(a) through 14(n) to IDS Growth Fund, Inc., Post-
Effective Amendment No. 34 to Registration Statement No. 2-
38355, are incorporated herein by reference.
15. Copy of Plan and Supplemental Agreement of Distribution
between Registrant and IDS Financial Corporation dated January
1, 1987, filed electronically as Exhibit 15 to Post-Effective
Amendment No. 13 to Registration Statement No. 2-66868, is
incorporated herein by reference.
16. Not applicable.
<PAGE>
PAGE 60
17. (a) Directors' Power of Attorney to sign amendments to this
Registration Statement dated Oct. 14, 1993 filed
electronically as Exhibit 17(a) to Post-Effective Amendment
No. 23 to Registration Statement No. 2-66868, is incorporated
herein by reference.
(b) Officers' Power of Attorney to sign amendments to this
Registration Statement dated June 1, 1993 filed electronically
as Exhibit 17(b) to Post-Effective Amendment No. 23 to
Registration Statement No. 2-66868 is incorporated herein by
reference.
Item 25.
Persons Controlled by or Under Common Control with
Registrant
None
Item 26.
Number of Holders of Securities
(1) (2)
Number of Record
Holders as of
Title of Class Feb. 15, 1994
Common Stock 9,117
<PAGE>
PAGE 61 SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Tax-Free Money
Fund, Inc., certifies that is meets all of the requirements for
effectiveness of the Amendment to this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Minneapolis and the State of Minnesota on the 18th
day of February, 1994.
IDS TAX-FREE MONEY FUND, INC.
By /s/ William R. Pearce**
William R. Pearce, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on the 18th day
of February, 1994.
Signature Capacity
/s/ William R. Pearce* President,
William R. Pearce Principal Executive
Officer and Director
/s/ Leslie L. Ogg* Treasurer, Principal
Leslie L. Ogg Financial Officer and
Principal Accounting Officer
/s/ William H. Dudley** Director
William H. Dudley
/s/ Robert F. Froehlke** Director
Robert F. Froehlke
/s/ David R. Hubers** Director
David R. Hubers
/s/ Anne P. Jones** Director
Anne P. Jones
/s/ Donald M. Kendall** Director
Donald M. Kendall
/s/ Melvin R. Laird** Director
Melvin R. Laird
<PAGE>
PAGE 62
Signature Capacity
/s/ Lewis W. Lehr** Director
Lewis W. Lehr
/s/ Aulana L. Peters** Director
Aulana L. Peters
/s/ Edson W. Spencer** Director
Edson W. Spencer
/s/ John R.Thomas** Director
John R. Thomas
/s/ Wheelock Whitney** Director
Wheelock Whitney
* Signed pursuant to Officers' Power of Attorney dated June 1, 1993
filed as Exhibit 17(b) to Post-Effective Amendment No. 23 to
Registration Statement No. 2-66868 by:
_______________________________
Leslie L. Ogg
** Signed pursuant to Directors' Power of Attorney dated Oct. 14,
1993 filed electronically as Exhibit 17(a) to Post-Effective
Amendment No. 23 to Registration Statement No. 2-66868 by:
_______________________________
Leslie L. Ogg
<PAGE>
PAGE 63
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 24
TO REGISTRATION STATEMENT NO. 2-66868
This post-effective amendment comprises the following papers and
documents:
The facing sheet.
The cross reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibit
<PAGE>
PAGE 1
EXHIBIT INDEX
B(11) Independent Auditor Auditors' Consent
<PAGE>
PAGE 1
INDEPENDENT AUDITORS' CONSENT
___________________________________________________________________
The Board of Directors and Shareholders
IDS Tax Free Money Fund, Inc.:
We consent to the use of our report incorporated herein by
reference and to the references to our Firm under the headings
"Financial Highlights" in Part A and "INDEPENDENT AUDITORS" in Part
B of the Registration Statement.
KPMG Peat Marwick
Minneapolis, Minnesota
February , 1994
