o 111 *P1
113 *P1
SUPPLEMENT DATED OCTOBER 1, 1998
TO THE PROSPECTUSES OF
FRANKLIN MONEY FUND
FRANKLIN FEDERAL MONEY FUND
DATED NOVEMBER 1, 1997
The prospectus is amended as follows:
I. The minimum investments table in the section "How Do I Buy Shares? -
Opening Your Account" is replaced with the following:
MINIMUM
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INVESTMENTS
o To open a regular, non-retirement account ............... $1,000
o To open an IRA, IRA Rollover, Roth IRA, or Education IRA $ 250*
o To open a custodial account for a minor (an UGMA/UTMA account) $ 100
o To open an account with an automatic investment plan .... $ 50**
o To add to an account .................................... $ 50***
*For all other retirement accounts, there is no minimum investment
requirement.
**$25 for an Education IRA.
***For all retirement accounts except IRAs, IRA Rollovers, Roth IRAs, or
Education IRAs, there is no minimum to add to an account.
For purchases by broker-dealers, registered investment advisors or
certified financial planners who have entered into an agreement with
Distributors for clients participating in comprehensive fee programs, the
minimum initial investment is $250. The minimum initial investment is $100
for officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group, and their family members,
consistent with our then-current policies.
We reserve the right to change the amount of these minimums from time to
time or to waive or lower these minimums for certain purchases. We also
reserve the right to refuse any order to buy shares.
II. The following new item is added under "May I Exchange Shares for Shares
of Another Fund? - Exchange Restrictions":
o You must meet the applicable minimum investment amount of the fund you
are exchanging into, or exchange 100% of your Fund shares.
III. The third paragraph in the section "What Distributions Might I Receive
from the Fund? - Dividend Options" is replaced with the following:
You may also choose to receive dividends in cash. If you have the money
sent to another person or to a checking or savings account, you may need a
signature guarantee. If you send the money to a checking or savings
account, please see "Electronic Fund Transfers" under "Services to Help You
Manage Your Account." For Trust Company retirement plans, special forms are
required to receive distributions in cash.
IV. The section "Keeping Your Account Open," found under "Transaction
Procedures and Special Requirements," is replaced in its entirety with the
following:
KEEPING YOUR ACCOUNT OPEN
Due to the relatively high cost of maintaining a small account, we may
close your account if the value of your shares is less than $250, or less
than $50 for employee accounts and custodial accounts for minors. We will
only do this if the value of your account fell below this amount because
you voluntarily sold your shares and your account has been inactive (except
for the reinvestment of distributions) for at least six months. Before we
close your account, we will notify you and give you 30 days to increase the
value of your account to $1,000, or $100 for employee accounts and
custodial accounts for minors. These minimums do not apply to IRAs and
other retirement plan accounts or to accounts managed by the Franklin
Templeton Group.
V. The second sentence in the section "Services to Help You Manage Your
Account - Automatic Investment Plan" is replaced with the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to the Fund each month to buy additional shares.
VI. The second paragraph under "Services to Help You Manage Your Account -
Systematic Withdrawal Plan" is replaced with the following:
If you would like to establish a systematic withdrawal plan, call
Shareholder Services. You may choose to direct your payments to buy the
same class of shares of another Franklin Templeton Fund or have the money
sent directly to you, to another person, or to a checking or savings
account. If you choose to have the money sent to a checking or savings
account, please see "Electronic Fund Transfers" below.
VII. The section "Services to Help You Manage Your Account - Electronic Fund
Transfers" is replaced with the following:
ELECTRONIC FUND TRANSFERS
You may choose to have distributions from the Fund or payments under a
systematic withdrawal plan sent directly to a checking or savings account.
If the account is with a bank that is a member of the Automated Clearing
House, the payments may be made automatically by electronic funds transfer.
If you choose this option, please allow at least fifteen days for initial
processing. We will send any payments made during that time to the address
of record on your account.
VIII. The following definition is revised in the "Useful Terms and
Definitions" section:
Contingency Period - For Class I shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. For Class II shares, the
contingency period is 18 months. The holding period begins on the day you
buy your shares. For example, if you buy shares on the 18th of the month,
they will age one month on the 18th day of the next month and each
following month.
Please keep this supplement for future reference.
