<PAGE>
Supplement dated December 23, 1998
to Prospectus dated August 1, 1998 of
BT ALEX. BROWN CASH RESERVE FUND, INC.
Prime Series
Treasury Series
Tax-Free Series
On December 18, 1998, the Fund's Board of Directors adopted a
shareholder service plan (the "Plan") for the BT Alex. Brown Cash Reserve Shares
of each of the Prime Series, the Treasury Series and the Tax-Free Series (the
"Shares"). Under the terms of each Plan, the Fund will pay ICC Distributors,
Inc. (the "Distributor") an annual service fee of 0.05% of the Shares' average
daily net assets. The Distributor will use the service fee to pay third parties
for services for which they are not otherwise being compensated under a dealer
or shareholder servicing agreement entered into pursuant to a Rule 12b-1 Plan.
The Annual Fund Operating Expenses and Example on page 2 of the
Prospectus are amended and restated below to reflect the new shareholder service
fees. In addition, the Expenses and Example for the Treasury Series have been
restated to reflect fee waivers by Investment Company Capital Corp. (the
"Advisor").
<TABLE>
<CAPTION>
Annual Fund Operating Expenses Prime Treasury Tax-Free
(as a % of average daily net assets) Series Series Series
------------------------------------ ------ ------ ------
<S> <C> <C> <C>
Management Fees (See "Management of the Fund-
Investment Advisor)(net of fee waivers for the Treasury
Series)............................................................ 0.26% 0.19%* 0.27%
12b-1 Fees (See "Management of the Fund-Distributor")................. 0.25% 0.25% 0.25%
Other Expenses (including a 0.05% Shareholder Service Fee
for each class).................................................... 0.21% 0.15% 0.13%
----- ----- -----
Total Fund Operating Expenses (net of fee waivers for the
Treasury Series)................................................... 0.72% 0.59%* 0.65%
===== ======= =====
</TABLE>
- -------
* The Advisor is voluntarily waiving its fee on the Treasury Series to the
extent required so that Total Fund Operating Expenses for the BT Alex. Brown
Cash Reserve Treasury Shares class do not exceed 0.59%. Absent such fee
waivers, Management Fees would be 0.24% and Total Fund Operating Expenses
would be 0.64% of the BT Alex. Brown Cash Reserve Treasury Shares class'
average daily net assets. The waiver is voluntary and may be terminated at
any time.
Example:
You would pay the following expenses on a $1,000 investment in each Series
assuming (1) 5% annual return, and (2) redemption at the end of each time
period:
1 year............................. $ 7 $ 6 $ 7
3 years............................ $23 $19 $21
5 years............................ $40 $33 $36
10 years........................... $89 $74 $81
The Expenses and Example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
CASHPRSSUP1
(12/98)
<PAGE>
Supplement dated December 23, 1998
to Prospectus dated August 1, 1998 of
BT ALEX. BROWN CASH RESERVE FUND, INC. - INSTITUTIONAL SHARES
Prime Series
Treasury Series
Tax-Free Series
The Annual Fund Operating Expenses and Example on page 2 of the
Prospectus are amended and restated as follows with respect to the Treasury
Institutional Shares class to reflect fee waivers for the Treasury Series.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses Treasury
(as a % of average daily net assets) Institutional Shares
------------------------------------ --------------------
<S> <C>
Management Fees (See "Management of the Fund-Investment Advisor)
(net of fee waivers for the Treasury Series)................................................. 0.19%*
12b-1 Fees (See "Management of the Fund-Distributor")........................................... None
Other Expenses.................................................................................. 0.10%
- -----
Total Fund Operating Expenses (net of fee waivers for the Treasury Series)...................... 0.29%*
======
</TABLE>
- -------
* The Advisor is voluntarily waiving its fee on the Treasury Series to the
extent required so that Total Fund Operating Expenses for the Treasury
Institutional Shares class do not exceed 0.29% of such class' average daily
net assets. Absent such fee waivers, Management Fees would be 0.24% and Total
Fund Operating Expenses would be 0.34% of the Treasury Institutional Shares
class' average daily net assets. The waiver is voluntary and may be
terminated at any time.
Example:
You would pay the following expenses on a $1,000 investment in Treasury
Institutional Shares assuming (1) 5% annual return, and (2) redemption at the
end of each time period:
1 year.......................................... $ 3
3 years......................................... $ 9
5 years......................................... $16
10 years........................................ $20
The Expenses and Example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
TRIPRSSUP1
(12/98)
