IDS CERTIFICATE CO /MN/, POS AM, 1997-04-18

IDS CERTIFICATE CO /MN/
POS AM, 1997-04-18

Previous: IDS CERTIFICATE CO /MN/, POS AM, 1997-04-18

Next: VANGUARD WORLD FUND INC, N-30D, 1997-04-18

<PAGE>
PAGE 1

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

FORM S-1

POST-EFFECTIVE AMENDMENT NUMBER 19 TO

REGISTRATION STATEMENT NO. 2-95577

IDS FLEXIBLE SAVINGS CERTIFICATE

UNDER

THE SECURITIES ACT OF 1933

IDS CERTIFICATE COMPANY
(Exact name of registrant as specified in charter)

DELAWARE
(State or other jurisdiction of incorporation or organization)

6725
(Primary Standard Industrial Classification Code Number)

41-6009975
(I.R.S. Employer Identification No.)

IDS Tower 10, Minneapolis, MN 55440-0010, (612) 671-3131
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Bruce A. Kohn, IDS Tower 10, Minneapolis, MN 55440-0010
(612) 671-2221
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24f-2 of the Investment Company Act of 1940. Registrants' Rule
24f-2 Notices for its most recent fiscal year (December 31) was
filed on or about February 27, 1997.

<PAGE>
PAGE 2
Explanatory Note

The first prospectus contained in Part I of the Registration
Statement will be used, with minor variations, in connection with
the following Registration Statements No. 2-68296, No. 2-76193, No.
33-3562, No. 333-9611 and No.33-22503. In each case, the first
several pages of the prospectuses vary to describe the unique
attributes of each certificate. The balance of the prospectus is
almost identical for all certificates.
<PAGE>
PAGE 3
IDS Flexible Savings Certificate
Prospectus
April 30, 1997

Earn competitive rates guaranteed by IDS Certificate Company for
the term you choose.

IDS Flexible Savings Certificates are issued by IDS Certificate
Company (IDSC). You may purchase this certificate by selecting a
term of six, 12, 18, 24, 30 or 36 months and an initial investment
of at least $1,000 but not more than $1 million (unless you receive
prior authorization from IDSC to invest more). Your principal and
interest are guaranteed by IDSC. IDSC guarantees a fixed rate of
interest depending upon the term you select. You may make
additional investments during the term subject to certain
limitations. You may invest in successive terms up to a total of
20 years from the issue date of the certificate. Your interest
rate will be determined as described in "About the certificate."

As is the case with other investment companies, 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.

This certificate is backed by IDSC's investments on deposit rather
than guaranteed or insured by the government or someone else. See
"Invested and guaranteed by IDSC" and "Regulated by government"
under "How your money is used and protected."

IDS Certificate Company is not a bank or financial institution, and
the securities it offers are not deposits or obligations of, backed
or guaranteed or endorsed by any bank or financial institution nor
are they insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other agency.

This prospectus describes terms and conditions of your IDS Flexible
Savings Certificate. It contains facts that can help you decide if
the certificate is the right investment for you. Read the
prospectus before you invest and keep it for future reference. No
one has the authority to change the terms and conditions of the IDS
Flexible Savings Certificate as described in the prospectus, or to
bind IDSC by any statement not in it.

IDS Certificate Company
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133 (toll free) or (612) 671-3800
(Minneapolis/St. Paul area)

TTY numbers:
800-846-4293 (toll free) or (612) 671-1630
(Minneapolis/St. Paul area)

An American Express company
web site address: http://www.americanexpress.com/advisors
<PAGE>
PAGE 4
Where to get information about IDSC

IDS Certificate Company is subject to the reporting requirements of
the Securities Exchange Act of 1934. Reports and other information
on IDSC are filed with the Securities and Exchange Commission (SEC)
and are available on the SEC Internet web site
(http://www.sec.gov). Copies can be obtained from the Public
Reference Section of the SEC, 450 5th St., N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. Or you can inspect
and copy information in person at the SEC's Public Reference
Section and at the following regional offices:

Northeast Regional Office
7 World Trade Center, Suite 1300
New York, NY 10048

Midwest Regional Office
500 West Madison St. Suite 1400
Chicago, IL 60661

Pacific Regional Office
5670 Wilshire Blvd., 11th Floor
Los Angeles, CA 90036

Initial interest rates

IDSC guarantees a fixed rate of interest for each term. For the
initial term, the rate will be within a specified range of certain
average certificates of deposit interest rates, as published in the
most recent BANK RATE MONITOR Top 25 Market AverageTM, North Palm
Beach, FL 33408, as explained under "About the certificate."

Here are the interest rates in effect on the date of this
prospectus, April 30, 1997:

Simple Effective
interest annualized
Term rate* yield**
6-month 4.92% 5.03%
12-month 5.18 5.30
18-month 5.26 5.38
24-month 5.38 5.51
30-month 5.39 5.52
36-month 5.45 5.58

*These are the rates for investments under $100,000. Rates may
depend on the factors described in "Rates for new purchases" and
"Promotions and pricing flexibility" under "About the certificate."

**Assuming monthly compounding.

These rates may or may not be in effect when you apply to purchase
your certificate. Rates for future terms are set at the discretion
of IDSC and may also differ from the rates shown here.

We reserve the right to issue other securities with different
terms.
<PAGE>
PAGE 5
Contents

Table of contents

About the certificate p
Investment amounts and terms p
Face amount and principal p
Value at maturity p
Receiving cash during the term p
Interest p
Rates for new purchases p
Promotions and pricing flexibility p
Additional investments p

How to invest and withdraw funds p
Buying your certificate p
Two ways to make investments p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Two ways to request a withdrawal or transfer p
Three ways to receive payment when you withdraw funds p
Retirement plans: special policies p
Withdrawal at death p
Transfer of ownership p
For more information p

Taxes on your earnings
Retirement accounts p
Gifts to minors p
How to determine the correct TIN p
Foreign investors p
Trusts p

How your money is used and protected
Invested and guaranteed by IDSC p
Regulated by government p
Backed by our investments p
Investment policies p
Certain investment considerations p

How your money is managed
Relationship between IDSC
and American Express Financial Corporation p
Capital structure and certificates issued p
Investment management and services p
Distribution p
Employment of other American Express affiliates p
Directors and officers p
Auditors p

Appendix p

<PAGE>
PAGE 6
Annual financial information
Summary of selected financial information p
Management's discussion and analysis of financial
condition and results of operations p
Report of independent auditors p

Financial statements p

Notes to financial statements p
<PAGE>
PAGE 7
About the certificate

Investment amounts and terms

You may purchase the IDS Flexible Savings Certificate with a single
payment of at least $1,000 payable in U.S. currency. Unless you
receive prior authorization, your total amount paid in over the
life of the certificate, less withdrawals, cannot exceed $1
million.

After determining the amount you wish to invest, you select a term
of six, 12, 18, 24, 30 or 36 months for which IDSC will guarantee
an interest rate. Generally, you will be able to select any of the
terms offered. But if your certificate is nearing its 20-year
maturity, you will not be allowed to select a term that would carry
the certificate past its maturity date.

The certificate may be used as an investment for your Individual
Retirement Account (IRA), 401(k) plan account or other qualified
retirement plan account. If so used, the amount of your
contribution (investment) will be subject to any limitations of the
plan and applicable federal law.

Face amount and principal

The face amount of the certificate is the amount of your initial
investment, and will remain the same over the life of the
certificate. Any investment or withdrawal within 15 days of the
end of a term will be added on or deducted to determine principal
for the new term. A withdrawal at any other time is taken first
from interest credited to your investment during that term. The
principal is the amount that is reinvested at the beginning of each
subsequent term, and is calculated as follows:

Principal equals Face amount (initial investment)
plus At the end of a term, interest credited
to your account during the term
minus Any interest paid to you in cash
plus Any additional investments to your
certificate
minus Any withdrawals, fees and applicable
penalties.

Principal may change during a term as described in "Add-on feature"
and "Full and partial withdrawals."

For example: Assume your initial investment (face amount) of $5,000
has earned $75 of interest during the term. You have not taken any
interest as cash, or made any withdrawals. You have invested an
additional $2,500 prior to the beginning of the next term. Your
principal for the next term will equal:

$5,000.00 Face amount (initial investment)
plus $75.00 Interest credited to your account
minus ($0.00) Interest paid to you in cash
plus $2,500.00 Additional investment to your certificate
minus ($0.00) Withdrawals and applicable penalties or fees
$7,575.00 Principal at the beginning of the next term.
<PAGE>
PAGE 8
Value at maturity

You may continue to invest for successive terms for up to a total
of 20 years. Your certificate matures at 20 years from its issue
date. At maturity, you will receive a distribution for the value
of your certificate, which will be the total of your purchase
price, plus additional investments and any credited interest not
paid to you in cash, less any withdrawals and penalties. Some fees
may apply as described in "How to invest and withdraw funds."

Receiving cash during the term

If you need your money before your certificate term ends, you may
withdraw part or all of its value at any time, less any penalties
that apply. Procedures for withdrawing money, as well as
conditions under which penalties apply, are described in "How to
invest and withdraw funds."

Interest

Your investments earn interest from the date they are credited to
your account. Interest is compounded and credited at the end of
each certificate month (on the monthly anniversary of the issue
date).

IDSC declares and guarantees a fixed rate of interest for each term
during the life of your certificate. We calculate the amount of
interest you earn each certificate month by:

o applying the interest rate then in effect to your balance
each day;

o adding these daily amounts to get a monthly total; and

o subtracting interest accrued on any amount you withdraw
during the certificate month.

Interest is calculated on a 30-day month and 360-day year basis.

Rates for new purchases

When your application is accepted and we have received your initial
investment, we will send you a confirmation of your purchase
showing the rate that your investment will earn. IDSC guarantees
that when rates for new purchases take effect, the rates will be
within a range based on the average interest rates then published
in the BANK RATE MONITOR Top 25 Market AverageTM (the BRM Average).

In the case of the six-, 12-, 24- and 30-month terms IDSC
guarantees that, for purchases of certificates for less than
$100,000, your rate for your initial term will be 10 basis points
(.10%) below to 90 basis points (.90%) above such rates for
comparable length certificates of deposit (CDs). In the case of
these terms, for purchases of certificates for $100,000 or more,
IDSC guarantees that your rate for your initial term will be within
a range of five-105 basis points above such rates for comparable
length certificates of deposit.
<PAGE>
PAGE 9

In the case of the 18-month term, because the BRM Average doesn't
typically publish rates for comparable length certificates of
deposit, IDSC guarantees that, for purchases of certificates for
less than $100,000, the rate for your initial term will be within a
range of zero-100 basis points above the rates for the 12-month
certificates of deposit. In the case of the 18-month term, for
purchases of certificates of $100,000 or more, IDSC guarantees that
your rate for your initial term will be within a range of 15-115
basis points above the rates for the 12-month certificates of
deposit.

In the case of the 36-month term, because the BRM Average doesn't
typically publish rates for comparable length certificates of
deposit, IDSC guarantees that, for purchases of certificates for
less than $100,000, the rate for your initial term will be within
zero-100 basis points above the rates for the 30-month certificate
of deposit. In the case of the 36-month term, for purchases of
certificates of $100,000 or more, IDSC guarantees that your rate
for your initial term will be within 15-115 basis points above the
rates for the 30-month certificates of deposit. For example, if
the rate most recently published in the BRM Average with respect to
the 30-month certificate of deposit is 4.80% our rates in effect
for that week for 36-month terms would be between 4.80% and 5.80%
for purchases for less than $100,000.

However, IDSC guarantees that, for persons who have received a
special promotional coupon from IDSC for purchase of a Flexible
Savings Certificate with an initial term of six, 12, 24 or 30
months and have satisfied any requirement stated in the coupon,
when rates for new purchases take effect, the rate for the initial
term will be within a range from 100 basis points (1%) to 200 basis
points above the average interest rate published for comparable
length CDs in the BRM Average. Similarly, IDSC guarantees that,
for persons who have received a special promotional coupon from
IDSC for purchase of a Flexible Savings Certificate with an initial
term of 18 or 36 months and have satisfied the conditions in the
coupon, when rates for new purchases take effect, the rate for an
initial term of 18 or 36 months will be within a range from 100
basis points (1%) to 200 basis points above the average interest
rate published for 12-month CDs or 30-month CDs, respectively, in
the BRM Average. For example, the coupon may require that you make
a minimum investment and that you are not an existing client of
American Express Financial Corporation (AEFC), American Express
Financial Advisors Inc., or another subsidiary of AEFC. AEFC will
select persons to receive the coupon based on a business strategy
to build relationships with new clients in selected market segments
who AEFC believes meet threshold requirements for such factors as
household income and home values. From time to time coupons may be
sent only to persons who both fit this strategy and live in
particular parts of the country or are affiliated with particular
organizations such as an automobile club.

From time to time, for your initial term, IDSC may offer
certificates with different terms than those described above. Such
terms may be seven, 11,13,19,25,31, or 37 months. For these
<PAGE>
PAGE 10
terms, IDSC guarantees that, for purchases of certificates for less
than $100,000, your rate for your initial term will be within a
range of 50-150 basis points above the rates published in the BRM
Average for the certificates of deposit specified above that have
the maturity that is closest to the term of the IDS certificate in
question. If two different BRM Averages have the closest
maturities, we will use the longest maturity that is shorter than
the term of the IDS certificate in question. For purchases of
certificates of $100,000 or more, the range for your initial term
will be 65-165 basis points above the same rate. For example, in
the case of a seven-month term, IDSC guarantees that, for purchases
of certificates less than $100,000, your rate for your initial term
will be within a range of 50-150 basis points above the rates for
the six-month certificates of deposit, and for purchases of
certificates for $100,000 or more, your rate for your initial term
will be within a range of 65-165 basis points above the rates for
the six-month certificates of deposit. Purchase of a certificate
in one of these special offers may result in a later term of less
than six months in order to permit your certificate to mature 20
years from its issue date. IDSC may limit the offering of these
certificates to persons who have received a coupon as a promotion,
based on a business strategy to build relationships with new
clients in selected market segments who AEFC believes meet
threshold requirements for such factors as household income and
home values or persons who fit this strategy and live in particular
areas of the country or are affiliated with particular
organizations. IDSC may also offer different rates to new clients,
existing clients, or to individuals who have purchased other
products or used other services of American Express Company or its
subsidiaries. We also may offer different rates based on your
amount invested, your geographic location and whether the
certificate is purchased for an IRA or for a qualified retirement
account.

The BRM Average is an index of rates and annual effective yields
offered on various length certificates of deposit by large banks
and thrifts in 25 metropolitan areas. The frequency of compounding
varies among the banks and thrifts. Certificates of deposit in the
BRM Average are government insured fixed-rate time deposits.

The BANK RATE MONITOR is available in your local library. To
obtain information on current BRM Average rates, call the Client
Service Organization at the telephone numbers listed on the back
cover between 8 a.m. and 6 p.m. your local time.

<PAGE>
PAGE 11
Rates for new purchases are reviewed and may change weekly.
Normally, the rate you receive will be the higher of:

o the rate in effect for your chosen term on the date of
your application; or
o the rate in effect on the date your application is
accepted by IDSC.

However, if your application bears a date more than seven days
before its receipt by IDSC, the rate you receive will be the higher
of:

o the rate in effect on the date your application is
accepted by IDSC; or
o the rate in effect seven days before receipt.

Except for specific promotions, IDSC guarantees an initial rate 25
basis points above the rate offered to the general public on this
IDS certificate if it is purchased by using the CD transfer service
offered by American Express Financial Advisors Inc. to help you
transfer money from a bank or thrift CD account into IDSC
investments. To be eligible for this rate, you must transfer at
least $10,000 from a CD account to IDSC to purchase one or more IDS
Cash Reserve Certificates and/or IDS Flexible Saving Certificates,
and this rate will only apply to those certificates.

Except for specific promotions, IDSC guarantees active or retired
AEFC employees, IDSC's directors, American Express financial
advisors, their immediate families and any U.S. employee of any
affiliated company of IDSC an initial rate 75 basis points above
the rate offered to the general public, reflecting the lower
distribution costs associated with such sales.

Promotions and pricing flexibility

From time to time, IDSC may sponsor or participate in promotions
involving one or more of the certificates and their respective
terms. For example, we may offer different rates to new clients,
to existing clients, or to individuals who have purchased other
products or used other services of American Express Company or its
subsidiaries.

We also may offer different rates based on your amount invested,
geographic location and whether the certificate is purchased for an
IRA or a qualified retirement account.

These promotions will generally be for a specified period of time.
If we offer a promotion, the rates for new purchases will be within
the range of rates described under "Rates for new purchases."

Rates for future terms: Interest on your certificate for future
terms may be greater or less than the rates you receive during your
first term. In setting future interest rates, a primary
<PAGE>
PAGE 12
consideration will be the prevailing investment climate, including
certificate of deposit yields as reflected in the BRM Average.
Nevertheless, we have complete discretion as to what interest rate
shall be declared beyond the initial term. At least six days in
advance of each term, we will send you notice of the rate that your
certificate will earn for that term. If the BRM Average is no
longer publicly available or feasible to use, IDSC may use another,
similar index as a guide for setting rates.

Performance: From February 1992 through February 1997, IDS
Flexible Savings Certificate one year yields were generally higher
than average bank and thrift one year certificate of deposit yields
and Super NOW accounts, as measured by the BRM Average (prior to
Jan. 13, 1993, yields were measured by the BRM National IndexTM, an
average of CD yields in 10 cities).

Yields from February 1992 through February 1997

____ IDS Flexible Savings - 1 year
.... Certificate of deposit - 1 year
6%

4% Two lines comparing the yields for one-year IDS Flexible
Savings Certificate against those of one-year
certificates of deposit with Flexible's yield generally
above the CD's
2%

'92 '93 '94 '95 '96 '97

The graph compares past yields and should not be
considered a prediction of future performance.

Additional investments

You may make investments within 15 calendar days after the end of a
term (the grace period). Investments added to your certificate
during the grace period will increase the principal balance for
purposes of the 25% add-on feature described below and the 10%
withdrawal feature described under "Full and partial withdrawals."
Additional investments may be in any amount so long as your total
investment, less withdrawals, does not exceed $1 million (unless
you receive prior authorization from IDSC to invest more). You
will earn interest on additional investments from the date we
accept them. IDSC will send a confirmation of additional
investments.

Add-on feature: You may also add to your certificate during the
term. These additional investments may not exceed 25% of the
certificate's principal balance at the end of the grace period.
This principal includes the balance at the end of the previous
term, plus or minus any deposits or withdrawals during the grace
period.
<PAGE>
PAGE 13
Any add-on or withdrawal during the grace period will change the
principal amount used to determine the amount available for the 25%
add-on feature.

For example, suppose your original balance is $9,000. During the
grace period, you add $1,000. At any time during the current term,
you could add up to 25% of principal ($9,000 + $1,000 = $10,000),
or $2,500 to your certificate.

The interest rate for these additional investments is the rate then
in effect for your account. If your additional investment
increases the principal of your certificate so that your
certificate's principal has exceeded a break point for a higher
interest rate, the certificate will earn this higher interest rate
for the remainder of the term, from the date the additional
investment is accepted.

How to invest and withdraw funds

Buying your certificate

Important: When opening an account, you must provide IDSC with
your correct Taxpayer Identification Number (Social Security or
Employer Identification Number). See "Taxes on your earnings."

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. Otherwise your purchase
will be processed the next business day.

o You have 15 days from the date of purchase to cancel your
investment without penalty by either writing or calling the
Client Service Organization at the address or phone number on
the back of this prospectus. If you decide to cancel your
certificate within this 15-day period, you will not earn any
interest.

o If you purchase a certificate with a personal check or other
non-guaranteed funds, AEFC will wait one day for the process
of converting your check to federal funds (e.g., monies of
member banks within the Federal Reserve Bank) before your
purchase will be accepted and you begin earning interest.

o IDSC has complete discretion to determine whether to accept an
application and sell a certificate.
<PAGE>
PAGE 14
A number of special policies apply to purchases, withdrawals and
exchanges within IRAs, 401(k) plans and other qualified retirement
plans. See "Retirement plans: special policies."

Two ways to make investments

1
By mail

Send your check along with your name and account number to:

Regular mail:
American Express Financial Advisors Inc.
Client Service Organization
IDS Tower 10
Minneapolis, MN 55440-0010

Express mail:
American Express Financial Advisors Inc.
Client Service Organization
733 Marquette Ave.
Minneapolis, MN 55440-0010

2
By wire

For investment into an established account, you may wire money to:

Norwest Bank Minneapolis
Routing No. 091000019
Minneapolis, MN
Attn: Domestic Wire Dept.

Give these instructions: Credit Account #00-30-015 for personal
account # (your account number) for (your name).

If this information is not included, the order may be rejected and
all money received, less any costs IDSC incurs, will be returned
promptly.

o Minimum amount you may wire: $1,000.

o Wire orders can be accepted only on days when your bank, AEFC,
IDSC and Norwest Bank Minneapolis are open for business.

o Wire purchases are completed when wired payment is received
and we accept the purchase.

o Bank wire purchases are not sent until the next business day.

o Wire investments must be received and accepted in the
Minneapolis headquarters on a business day before 3 p.m.
Central time to be credited that day. Otherwise your purchase
will be processed the next business day.

<PAGE>
PAGE 15
o IDSC, AEFC and its other subsidiaries 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.

Full and partial withdrawals

You may withdraw your certificate for its full value or make a
partial withdrawal of $100 or more at any time. If you purchase
this certificate for an IRA, 401(k) or other retirement plan
account, early withdrawals or cash payments of interest taken
prematurely may be subject to IRS penalty taxes.

o If your withdrawal request is received in the Minneapolis
headquarters on a business day before 3 p.m. Central time, it
will be processed that day and payment will be sent the next
business day. Otherwise, your request will be processed one
business day later.

o Full and partial withdrawals of principal are subject to
penalties, described below.

o Interest payments in cash may be sent to you at the end of
each certificate month, quarter, or on a semiannual or annual
basis.

o If a withdrawal reduces your account value to a point where we
pay a lower interest rate, you will earn the lower rate from
the date of the withdrawal.

o You may not otherwise make a partial withdrawal if it would
reduce your certificate balance to less than $1,000. If you
request such a withdrawal, we will contact you for revised
instructions.

o Scheduled partial withdrawals may be made monthly, quarterly,
semiannually, annually and at term end.

o Withdrawals before the end of the certificate month will
result in loss of accrued interest on the amount withdrawn.
You'll get the best result by timing a withdrawal at the end
of the certificate month.

Penalties for early withdrawal during a term: When you request a
full or partial withdrawal, we pay the amount you request:

o first from interest credited during the current term;

o then from the principal of your certificate.

Any additional investments or withdrawals during a term are added
to or deducted from the principal and are used in determining any
withdrawal charges.

<PAGE>
PAGE 16

Withdrawal penalties: For withdrawals during the term of more than
the interest credited that term and over 10% of the certificate's
principal, a 2% withdrawal penalty will be deducted from the
account's remaining balance.

For example, assume you invest $20,000 in a certificate and select
a two-year term. A little over a year later assume you have earned
$1,600 in interest. The following demonstrates how the withdrawal
charge is deducted:

When you withdraw a specific amount of money, we would have to
withdraw somewhat more from your account to cover the withdrawal
charge. For instance, suppose you request a $5,000 check. The
first $1,600 paid to you is interest earned that term, the next
$2,000 is 10% of principal, and not subject to the withdrawal
penalty, and the remaining $1,400 paid to you is principal over
the 10% limit. We would send you a check for $5,000 and deduct a
withdrawal charge of $28.00 ($1,400 x 2%) from the remaining
balance of your certificate account. Your new balance would be
$16,572 ($21,600 - $5,028).

Total investments $20,000.00
Interest credited $1,600.00
Total balance $21,600.00

Requested check $5,000.00
Credited interest withdrawn ($1,600.00)
10 percent of principal -- not subject to ($2,000.00)
penalty
Remaining portion of requested withdrawal -- $1,400.00
subject to penalty
Withdrawal penalty percent 2.00%
Actual withdrawal penalty $28.00

Balance prior to withdrawal $21,600.00
Requested withdrawal check ($5,000.00)
Withdrawal penalty ($ 28.00)
Total balance after withdrawal $16,572.00

Additionally, if you withdraw during a certificate month, you will
not earn interest for the month on the amount withdrawn.

Penalty exceptions: There is never a penalty for withdrawal of
interest. In addition, you may withdraw up to 10% of your
principal during the term without a withdrawal penalty. The
principal available for the 10% no-penalty withdrawal feature is
the balance in the certificate at the beginning of the term plus or
minus any deposits or withdrawals made during the grace period.

The following example demonstrates how this feature works:

Suppose your certificate balance is $1,000. During the grace
period you add $500, bringing the principal to $1,500. At any time
during the term you could withdraw up to $150 of principal with no
penalty.

<PAGE>
PAGE 17
Any additional investments or withdrawals following the grace
period will not change the principal amount used to determine the
amount available for the 10% no-penalty withdrawal feature.

The 2% penalty is waived upon death of the certificate owner. We
will also waive withdrawal penalties on withdrawals for IRA
certificate accounts for your required distributions. See
"Retirement plans: special policies" below.

For more information on withdrawal charges, talk with your American
Express financial advisor or call the Client Service Organization
at the number on the back cover.

When your certificate term ends

Shortly before the end of the term you have selected for your
certificate, we will send you a notice indicating the interest rate
that will apply to the certificate for the new term. When your
certificate term ends we will automatically renew your certificate
for the standard term (six, 12, 24, 30 or 36 month) nearest in
length to your initial term. If your initial term is equidistant
from two standard terms, we will automatically renew your
certificate to the term with the longest maturity that is shorter
than your initial term. If you wish to select a different term,
you must notify us in writing before the end of the grace period.
You will not be allowed to select a term that would carry the
certificate past its maturity date.

The interest rates that will apply to your new term will be those
in effect on the day the new term begins. We will send you a
confirmation showing the rate of interest that will apply to the
new term you have selected. This rate of interest will not be
changed during that term.

If you want to withdraw your certificate without a withdrawal
charge, you must notify us within 15 calendar days following the
end of a term. However, you will lose any interest accrued since
the end of the term.

You may also add to your investment within the 15 calendar days
following the end of your term. See "Additional investments" under
"About the certificate."

Other full and partial withdrawal policies:

o If you request a partial or full withdrawal of a certificate
recently purchased or added to by a check or money order that
is not guaranteed, we will wait for your check to clear.
Please expect a minimum of 10 days from the date of your
payment before IDSC mails a check to you. A check may be
mailed earlier if the bank provides evidence that your check
has cleared.

o If your certificate is pledged as collateral, any withdrawal
will be delayed until we get approval from the secured party.

<PAGE>
PAGE 18
o Any payments to you may be delayed under applicable rules,
regulations or orders of the SEC.

Transfers to other accounts

You may transfer part or all of your certificate to any other IDS
certificate or into another new or existing American Express
Financial Advisors Inc. account that has the same ownership
(subject to any terms and conditions that may apply).

Two ways to request a withdrawal or transfer

1
By phone

o Call the Client Service Organization at the telephone numbers
listed on the back cover between 8 a.m. and 6 p.m. your local
time.

o Maximum phone request: $50,000.

o Transfers into an American Express Financial Advisors Inc.
account with the same ownership.

o A telephone withdrawal request will not be allowed within 30
days of a phoned-in address change.

o We will honor any telephone request believed to be authentic
and will use reasonable procedures to confirm that it is.
This includes asking identifying questions and tape recording
telephone calls. If reasonable procedures are not followed,
IDSC or AEFC will be liable for any loss resulting from
fraudulent requests.

You may request that telephone withdrawals not be authorized from
your account by writing the Client Service Organization.

2
By mail

Send your name, account number and request for a withdrawal or
transfer to:

Regular mail:
American Express Financial Advisors Inc.
Client Service Organization
IDS Tower 10
Minneapolis, MN 55440-0010

Express mail:
American Express Financial Advisors Inc.
Client Service Organization
733 Marquette Ave.
Minneapolis, MN 55440-0010

<PAGE>
PAGE 19
Written requests are required for:

o Transactions over $50,000.

o Pension plans and custodial accounts where the minor has
reached the age at which custodianship should terminate.

o Transfers to another American Express Financial Advisors Inc.
account with different ownership (all current registered
owners must sign the request).

Three ways to receive payment when you withdraw funds

1
By regular or express mail

o Mailed to address on record; please allow seven days for
mailing.

o Payable to name(s) you requested.

o You will be charged a fee if you request express mail
delivery. We will deduct the fee from your remaining
certificate balance, provided that balance would not be less
than $1,000. If the balance would be less than $1,000, the
fee is deducted from the proceeds of the withdrawal.

2
By wire

o Minimum wire withdrawal: $1,000.

o Request that money be wired to your bank.

o Bank account must be in same ownership as IDSC account.

o Pre-authorization required. Complete the bank wire
authorization section in the application or use a form
supplied by your American Express financial advisor. All
registered owners must sign.

o A service fee, if any, may be deducted from your balance (for
partial withdrawals) or from the proceeds of a full
withdrawal.

3
By electronic transfer

o Available only for pre-authorized scheduled partial
withdrawals and other full or partial withdrawals.

o No charge.

<PAGE>
PAGE 20
o Deposited electronically in your bank account.

o Allow two to five business days from request to deposit.

Retirement plans: special policies

o If the certificate is purchased for a 401(k) plan or other
qualified retirement plan account, the terms and conditions of
the certificate apply to the plan as the owner of this
certificate. However, the terms of the plan, as interpreted
by the plan trustee or administrator, will determine how a
participant's individual account under the plan is
administered. These terms may differ from the terms of the
certificate.

o If your certificate is held in a Custodial Retirement Plan (or
Keogh plan), special rules may apply at maturity. If no other
investment instructions are provided directing how to handle
your certificate at maturity, the full value of the
certificate will automatically transfer to a new or existing
cash management account according to rules outlined in the
Custodial Retirement Plan document.

o The annual custodial fee for IRA or non-401(k) qualified
retirement plans may be deducted from your certificate
account. It may reduce the amount payable at maturity or the
amount received upon an early withdrawal.

o Retirement plan withdrawals may be subject to withdrawal
penalties or loss of interest even if they are not subject to
federal tax penalties.

o We will waive withdrawal penalties on withdrawals for IRA
certificate accounts for your required distributions.

o If you withdraw all funds from your last account in an IRA at
American Express Trust Company, a $50 termination fee will
apply.

o The IRA termination fee will be waived if a withdrawal occurs
after you have reached age 59 1/2 or upon the owner's death.

Withdrawal at death

If a certificate is surrendered upon the client's death, any
applicable surrender charge will be waived. In addition, if an IRA
termination fee is applicable, it will also be waived.

Transfer of ownership

While this certificate is not negotiable, IDSC will transfer
ownership upon written notification to our Client Service
Organization. However, if you have purchased your certificate for
an IRA, 401(k) plan or other qualified retirement plan, you may be
unable to transfer or assign the certificate without losing the
account's favorable tax status. Please consult your tax advisor.

<PAGE>
PAGE 21
For more information

For information on purchases, withdrawals, exchanges, transfers of
ownership, proper instructions and other service questions
regarding your certificate, please consult your American Express
financial advisor or call the Client Service Organization at the
telephone numbers listed on the back cover.

Taxes on your earnings

Interest on your certificate is taxable when credited to your
account. Each calendar year we provide the certificate account
owner and the IRS with reports of all earnings over $10 (Form
1099). Withdrawals are reported to the certificate account owner
and the IRS on Form 1099-B, Proceeds from Broker Transactions.

Retirement accounts

If you are using the certificate as an investment for an IRA,
401(k) plan account or other qualified retirement plan account,
income tax rules for your IRA or qualified plan apply. Generally,
you will pay no income taxes on your investment's earnings--and, in
many cases, on part or all of the investment itself--until you
begin to make withdrawals.

IDSC will withhold federal income taxes of 10% on IRA withdrawals
unless you tell us not to. IDSC is required to withhold federal
income taxes of 20% on most other qualified plan distributions,
unless the distribution is directly rolled over to another
qualified plan or IRA.

Withdrawals from retirement accounts are generally subject to a
penalty tax of 10% by the IRS if you make them before age 59 1/2,
unless you are disabled or if they are made by your beneficiary in
the event of your death. Other exceptions may also apply. Also,
withdrawals of principal during a certificate month may be subject
to the certificate's provision for loss of interest.

Consult your tax advisor to see how these rules apply to you before
you request a distribution from your plan or IRA.

Gifts to minors

The certificate may be given to a minor under either the Uniform
Gifts or Uniform Transfers to Minors Act (UGMA/UTMA), whichever
applies in your state. UGMAs/UTMAs are irrevocable. Generally,
under federal tax laws, income over $1,200 on property owned by
children under age 14 will be taxed at the parents' marginal tax
rate, while income on property owned by children 14 or older will
be taxed at the child's rate.

Your Taxpayer Identification Number (TIN) and backup withholding:
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 with IDSC.
<PAGE>
PAGE 22
If you don't provide the TIN to IDSC, or the TIN you report is
incorrect, you could be subject to backup withholding of 31% of
your interest earnings. You could also 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; and
o criminal penalties for falsifying information.

You could also be subject to backup withholding because you failed
to report interest on your tax return as required.

To help you determine the correct TIN to use on various types of
accounts, please use this chart:

How to determine the correct TIN

Use the Social Security or
For this type of account: Employer Identification Number of:

Individual or joint account The individual or individuals
listed on the account

Custodian account of a minor The minor
(Uniform Gifts/Transfers to
Minors Act)

A living trust The grantor-trustee (the person
who puts the money into the trust)

An irrevocable trust, pension The legal entity (not the personal
trust or estate representative or trustee, unless
no legal entity is designated in
the account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or The organization
tax-exempt organization

For details on TIN requirements, ask your financial advisor or
local American Express Financial Advisors Inc. office for federal
Form W-9, "Request for Taxpayer Identification Number and
Certification."

Foreign investors

If you are not a citizen or resident of the United States, you must
supply IDSC with Form W-8, Certificate of Foreign Status when you
purchase your certificate, and you must resupply it every three
years. You must also supply both a current mailing address and an
<PAGE>
PAGE 23
address of foreign residency, if different. IDSC will not accept
purchases of certificates by nonresident aliens without an
appropriately certified Form W-8 (or approved substitute). Also,
if you do not supply Form W-8 you will be subject to backup
withholding on interest payments and withdrawals.

Interest on the certificate is "portfolio interest" as defined in
U.S. Internal Revenue Code Section 871(h) if earned by a
nonresident alien. Even though your interest income is not taxed
by the U.S. government, it will be reported at year end to you and
to the U.S. government on a Form 1042S, Foreign Person's U.S.
Source Income Subject to Withholding. The United States
participates in various tax treaties with foreign countries, which
provide for sharing of tax information.

Estate tax: If you are a nonresident alien and you die while
owning a certificate, then, depending on the circumstances, IDSC
generally will not act on instructions with regard to the
certificate unless IDSC first receives, at a minimum, a statement
from persons IDSC believes are knowledgeable about your estate.
The statement must be in a form satisfactory to IDSC and must tell
us that, on your date of death, your estate did not include any
property in the United States for U.S. estate tax purposes. In
other cases, we generally will not take action regarding your
certificate until we receive a transfer certificate from the IRS or
evidence satisfactory to IDSC that the estate is being administered
by an executor or administrator appointed, qualified and acting
within the United States. In general, a transfer certificate
requires the opening of an estate in the United States and provides
assurance that the IRS will not claim your certificate to satisfy
estate taxes.

Important: The information in this prospectus is a brief and
selective summary of certain federal tax rules that apply to this
certificate and is given on the basis of current law and practice.
Tax matters are highly individual and complex. Investors should
consult a qualified tax advisor regarding their own position.

Trusts

If the investor is a trust, the policies and procedures described
above will apply with regard to each grantor who is a nonresident
alien.

How your money is used and protected

Invested and guaranteed by IDSC

The IDS Flexible Savings Certificate is issued and guaranteed by
IDSC, a wholly owned subsidiary of AEFC. We are by far the largest
issuer of face amount certificates in the United States, with total
assets of more than $3.5 billion and a net worth in excess of $194
million on Dec. 31, 1996.

<PAGE>
PAGE 24
We back our certificates by investing the money received and
keeping the invested assets on deposit. Our investments generate
interest and dividends, out of which we pay:

o interest to certificate owners; and

o various expenses, including taxes, fees to AEFC for
advisory and other services and distribution fees to
American Express Financial Advisors Inc.

For a review of significant events relating to our business, see
"Management's discussion and analysis of financial condition and
results of operations." Our certificates are not rated by a
national rating agency.

Most banks and thrifts offer investments known as certificates of
deposit (CDs) that are similar to our certificates in many ways.
Early withdrawals of bank CDs often result in penalties. Banks and
thrifts generally have federal deposit insurance for their deposits
and lend much of the money deposited to individuals, businesses and
other enterprises. Other financial institutions and some insurance
companies may offer investments with comparable combinations of
safety and return on investment.

Regulated by government

Because the IDS Flexible Savings Certificate is a security, its
offer and sale are subject to regulation under federal and state
securities laws. (It is a face-amount certificate -- not a bank
product, an equity investment, a form of life insurance or an
investment trust.)

The federal Investment Company Act of 1940 requires us to keep
investments on deposit in a segregated custodial account to protect
all of our outstanding certificates. These investments back the
entire value of your certificate account. Their amortized cost
must exceed the required carrying value of the outstanding
certificates by at least $250,000. As of Dec. 31, 1996, the
amortized cost of these investments exceeded the required carrying
value of our outstanding certificates by more than $151 million.

Backed by our investments

Our investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1996:

Type of investment Net amount invested

Corporate and other bonds 38%
Government agency bonds 31
Preferred stocks 20
Mortgages 6
Cash and cash equivalents 3
Municipal bonds 2
<PAGE>
PAGE 25

As of Dec. 31, 1996 about 93% of our securities portfolio
(including bonds and preferred stocks) is rated investment grade.
For additional information regarding securities ratings, please
refer to Note 3B in the financial statements.

Most of our investments are on deposit with American Express Trust
Company, Minneapolis, although we also maintain separate deposits
as required by certain states. American Express Trust Company is a
wholly owned subsidiary of AEFC. Copies of our Dec. 31, 1996
schedule of Investments in Securities of Unaffiliated Issuers are
available upon request. For comments regarding the valuation,
carrying values and unrealized appreciation (depreciation) of
investment securities, see Notes 1, 2 and 3 to the financial
statements.

Investment policies

In deciding how to diversify the portfolio -- among what types of
investments in what amounts -- the officers and directors of IDSC
use their best judgment, subject to applicable law. The following
policies currently govern our investment decisions:

Debt securities-
Most of our investments are in debt securities as referenced in the
table in "Backed by our investments" under "How your money is used
and protected."

Purchasing securities on margin -
We will not purchase any securities on margin or participate on a
joint basis or a joint-and-several basis in any trading account in
securities.

Commodities -
We have not and do not intend to purchase or sell commodities or
commodity contracts except to the extent that transactions
described in "Financial transactions including hedges" in this
section may be considered commodity contracts.

Underwriting -
We do not intend to engage in the public distribution of securities
issued by others. However, if we purchase unregistered securities
and later resell them, we may be considered an underwriter under
federal securities laws.

Borrowing money -
From time to time we have established a line of credit if
management believed borrowing was necessary or desirable. We may
pledge some of our assets as security. We may occasionally use
repurchase agreements as a way to borrow money. Under these
agreements, we sell debt securities to our lender, and repurchase
them at the sales price plus an agreed-upon interest rate within a
specified period of time.

<PAGE>
PAGE 26

Real estate -
We may invest in limited partnership interests in limited
partnerships that either directly, or indirectly through other
limited partnerships, invest in real estate. We may invest
directly in real estate. We also invest in mortgage loans.

Lending securities -
We may lend some of our securities to broker-dealers and receive
cash equal to the market value of the securities as collateral. We
invest this cash in short-term securities. If the market value of
the securities goes up, the borrower pays us additional cash.
During the course of the loan, the borrower makes cash payments to
us equal to all interest, dividends and other distributions paid on
the loaned securities. We will try to vote these securities if a
major event affecting our investment is under consideration.

When-issued securities-
Some of our investments in debt securities are purchased on a when-
issued basis. It may take as long as 45 days or more before these
securities are issued and delivered to us. We generally do not pay
for these securities or start earning on them until delivery. We
have established procedures to ensure that sufficient cash is
available to meet when-issued commitments.

Financial transactions including hedges-
We buy or sell various types of options contracts for hedging
purposes or as a trading technique to facilitate securities
purchases or sales. We buy interest rate caps for hedging
purposes. These pay us a return if interest rates rise above a
specified level. If interest rates do not rise above a specified
level, the interest rate caps do not pay us a return. IDSC may
enter into other financial transactions, including futures and
other derivatives, for the purpose of managing the interest rate
exposures associated with IDSC's assets or liabilities. We do not
use derivatives for speculative purposes.

Illiquid securities -
A security is illiquid if it cannot be sold in the normal course of
business within seven days at approximately its current market
value. Some investments cannot be resold to the U.S. public
because of their terms or government regulations. All securities,
however can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. IDSC's
investment advisor will follow guidelines established by the board
and consider relevant factors such as the nature of the security
and the number of likely buyers when determining whether a security
is illiquid. No more than 15% of IDSC's investment portfolio will
be held in securities that are illiquid. In valuing its investment
portfolio to determine this 15% limit, IDSC will use statutory
accounting under an SEC order. This means that, for this purpose,
the portfolio will be valued in accordance with applicable
Minnesota law governing investments of life insurance companies,
rather than generally accepted accounting principles.

<PAGE>
PAGE 27
Restrictions -
There are no restrictions on concentration of investments in any
particular industry or group of industries or on rates of portfolio
turnover.

Certain investment considerations

The price of bonds generally falls as interest rates increase, and
rises as interest rates decrease. The price of a bond also
fluctuates if its credit rating is upgraded or downgraded. The
price of bonds below investment grade may react more to the ability
of a company to pay interest and principal when due than to changes
in interest rates. They have greater price fluctuations, are more
likely to experience a default, and sometimes are referred to as
junk bonds. Reduced market liquidity for these bonds may
occasionally make it more difficult to value them. In valuing
bonds, IDSC relies both on independent rating agencies and the
investment manager's credit analysis. Under normal circumstances,
at least 85% of the securities in IDSC's Portfolio will be rated
investment grade, or in the opinion of IDSC's investment advisor
will be the equivalent of investment grade. Under normal
circumstances, IDSC will not purchase any security rated below B-
by Moody's Investors Service, Inc. or Standard & Poor's.
Securities that are subsequently downgraded in quality may continue
to be held by IDSC and will be sold only when IDSC believes it is
advantageous to do so.

As of Dec. 31, 1996, IDSC held about 7% of its investment portfolio
(including bonds, preferred stocks, mortgages and cash equivalents)
in investments rated below investment grade.

When-issued securities are subject to market fluctuations and they
may affect IDSC's investment portfolio the same as owned
securities.

Derivatives are financial instruments whose performance is derived,
at least in part, from the performance of an underlying asset,
security or index. A small change in the value of the underlying
asset, security or index may cause a sizable gain or loss in the
fair value of the derivative.

How your money is managed

Relationship between IDSC and American Express Financial
Corporation

IDSC was originally organized as Investors Syndicate of America,
Inc., a Minnesota corporation, on Oct. 15, 1940, and began business
as an issuer of face amount investment certificates on Jan. 1,
1941. The company became a Delaware corporation on Dec. 31, 1977,
and changed its name to IDS Certificate Company on April 2, 1984.

Before IDSC was created, AEFC (formerly known as IDS Financial
Corporation), our parent company, had issued similar certificates
since 1894. As of Jan. 1, 1995, IDS Financial Corporation changed
its name to AEFC. IDSC and AEFC have never failed to meet their
certificate payments.
<PAGE>
PAGE 28

During its many years in operation, AEFC has become a leading
manager of investments in mortgages and securities. As of Dec. 31,
1996, AEFC managed investments, including its own, of more than
$149 billion. American Express Financial Advisors Inc., a wholly
owned subsidiary of AEFC, provides a broad range of financial
planning services for individuals and businesses through its
nationwide network of more than 175 offices and more than 7,800
financial advisors. American Express Financial Advisors' financial
planning services are comprehensive, beginning with a detailed
written analysis that's tailored to your needs. Your analysis may
address one or all of these six essential areas: financial
position, protection planning, investment planning, income tax
planning, retirement planning and estate planning.

AEFC itself is a wholly owned subsidiary of American Express
Company, a financial services company with executive offices at
American Express Tower, World Financial Center, New York, NY 10285.
American Express Company is a financial services company engaged
through subsidiaries in other businesses including:

o travel related services (including American Express(R) Card
and Travelers Cheque operations through American Express
Travel Related Services Company, Inc. and its subsidiaries);
and

o international banking services (through American Express Bank
Ltd. and its subsidiaries including American Express Bank
International).

Capital structure and certificates issued

IDSC has authorized, issued and has outstanding 150,000 shares of
common stock, par value of $10 per share. AEFC owns all of the
outstanding shares.

As of Dec. 31, 1996, IDSC had issued (in face amount)
$13,327,949,715 of installment certificates and $15,788,445,077 of
single payment certificates.

Investment management and services

Under an Investment Advisory and Services Agreement, AEFC acts as
our investment advisor and is responsible for:

o providing investment research;
o making specific investment recommendations; and
o executing purchase and sale orders according to our policy of
obtaining the best price and execution.

<PAGE>
PAGE 29
All these activities are subject to direction and control by our
board of directors and officers. Our agreement with AEFC requires
annual renewal by our board, including a majority of directors who
are not interested persons of AEFC or IDSC as defined in the
federal Investment Company Act of 1940.

For its services, we pay AEFC a monthly fee, equal on an annual
basis to a percentage of the total book value of certain assets
(included assets).

Advisory and services fee computation:

Included assets Percentage of total book value

First $250 million 0.75%
Next 250 million 0.65
Next 250 million 0.55
Next 250 million 0.50
Any amount over 1 billion 0.45

Included assets are all assets of IDSC except mortgage loans, real
estate, and any other asset on which we pay an advisory or service
fee.

Advisory and services fee for the past three years:

Percentage of
Year Total fees included assets
1996 $16,989,093 0.50%
1995 $16,472,458 0.50
1994 $13,565,432 0.51

Estimated advisory and services fees for 1997 are $16,621,000.

Other expenses payable by IDSC: The Investment Advisory and
Services Agreement provides that we will pay:

o costs incurred by us in connection with real estate and
mortgages;
o taxes;
o depository and custodian fees;
o brokerage commissions;
o fees and expenses for services not covered by other agreements
and provided to us at our request, or by requirement, by
attorneys, auditors, examiners and professional consultants
who are not officers or employees of AEFC;
o fees and expenses of our directors who are not officers or
employees of AEFC;
o provision for certificate reserves (interest accrued on
certificate owner accounts); and
o expenses of customer settlements not attributable to sales
function.

<PAGE>
PAGE 30
Distribution

Under a Distribution Agreement with American Express Financial
Advisors Inc. we pay for the distribution of this certificate,
effective April 30, 1997, as follows:

o 0.20% of the initial payment on the issue date of the
certificate; and

o 0.20% of the certificate's reserve at the beginning of the
second and subsequent quarters from issue date.

This fee is not assessed to your certificate account.

For certificates paying a special promotional coupon rate described
in "Rates for new purchases" under "About the certificate,"
American Express Financial Advisors Inc. waives its distribution
fee.

Total distribution fees paid to American Express Financial Advisors
Inc. for all series of certificates amounted to $29,971,960 during
the year ended Dec. 31, 1996. We expect to pay American Express
Financial Advisors Inc. distribution fees amounting to $30,806,000
during 1997.

See Note 1 to Financial statements regarding deferral of
distribution fee expense.

American Express Financial Advisors Inc. pays commissions to its
financial advisors and pays other selling expenses in connection
with services to us. Our board of directors, including a majority
of directors who are not interested persons of American Express
Financial Advisors Inc. or IDSC, approved this distribution
agreement.

Employment of other American Express affiliates

AEFC may employ an affiliate of American Express Company as
executing broker for our portfolio transactions only if:

o we receive prices and executions at least as favorable as
those offered by qualified independent brokers performing
similar services;
o the affiliate charges us commissions consistent with those
charged to comparable unaffiliated customers for similar
transactions; and
o the affiliate's employment is consistent with the terms of the
current Investment Advisory and Services Agreement and federal
securities laws.

Directors and officers

IDSC's directors, chairman, president and controller are elected
annually for a term of one year. The other executive officers are
appointed by the president.

<PAGE>
PAGE 31

We paid a total of $37,000 during 1996 to directors not employed by
AEFC.

Board of directors

David R. Hubers*
Born in 1943. Director since 1987.
President and chief executive officer of AEFC since 1993. Senior
vice president and chief financial officer of AEFC from 1984 to
1993.

Charles W. Johnson
Born in 1929. Director since 1989.
Director, Communications Holdings, Inc. Former vice president and
group executive, Industrial Systems, with Honeywell, Inc. Retired
1989.

Edward Landes
Born in 1919. Director since 1984.
Development consultant. Director of IDS Life Insurance Company of
New York. Director of Endowment Development, YMCA of Metropolitan
Minneapolis. Vice president for Financial Development, YMCA of
Metropolitan Minneapolis from 1985 through 1995. Former sales
manager - Supplies Division and district manager - Data Processing
Division of IBM Corporation. Retired 1983.

John V. Luck, Ph.D.
Born in 1926. Director since 1987.
Former senior vice president - Science and Technology with General
Mills, Inc. Employed with General Mills, Inc. since 1968. Retired
1988.

James A. Mitchell*
Born in 1941. Director since 1994.
Chairman of the board of directors from 1994 to 1996. Executive
vice president - Marketing and Products of AEFC since 1994. Senior
vice president - Insurance Operations of AEFC and president and
chief executive officer of IDS Life Insurance Company from 1986 to
1994.

Harrison Randolph
Born in 1916. Director since 1968.
Engineering, manufacturing and management consultant since 1978.

<PAGE>
PAGE 32
Gordon H. Ritz
Born in 1926. Director since 1968.
Director, Mid-America Publishing and Atrix International, Inc.
Former president, Com Rad Broadcasting Corp. Former director,
Sunstar Foods.

Stuart A. Sedlacek*
Born in 1957. Director since 1994.
President since 1994. Vice president - Assured Assets of AEFC
since 1994. Vice president and portfolio manager from 1988 to
1993. Executive vice president - Assured Assets of IDS Life
Insurance Company since 1994.

*"Interested Person" of IDSC as that term is defined in Investment
Company Act of 1940.

Executive officers

Stuart A. Sedlacek
Born in 1957. President since 1994.

Timothy S. Meehan
Born in 1957. Secretary since 1995.
Secretary of AEFC and American Express Financial Advisors Inc.
since 1995. Senior counsel to AEFC since 1995. Counsel from 1990
to 1995.

Lorraine R. Hart
Born in 1951. Vice president - Investments since 1994.
Vice president - Insurance Investments of AEFC since 1989. Vice
president - Investments of IDS Life Insurance Company since 1992.

Jay C. Hatlestad
Born in 1957. Vice president and controller of IDSC since 1994.
Manager of Investment Accounting of IDS Life Insurance Company from
1986 to 1994.

Bruce A. Kohn
Born in 1951. Vice president and general counsel since 1993.
Senior counsel to AEFC since 1996. Counsel to AEFC from 1992 to
1996. Associate counsel from 1987 to 1992.

F. Dale Simmons
Born in 1937. Vice president - Real Estate Loan Management since
1993. Vice president of AEFC since 1992. Senior portfolio manager
of AEFC since 1989. Assistant vice president from 1987 to 1992.

The officers and directors as a group beneficially own less than 1%
of the common stock of American Express Company.

<PAGE>
PAGE 33
IDSC has provisions in its bylaws relating to the indemnification
of its officers and directors against liability, as permitted by
law. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of
the SEC such indemnification is against public policy as expressed
in the Act and is therefore unenforceable.

Auditors

A firm of independent auditors audits our financial statements at
the close of each fiscal year (Dec. 31). Copies of our annual
financial statements (audited) and semiannual financial statements
(unaudited) are available to any certificate owner upon request.

Ernst & Young LLP, Minneapolis, has audited the financial
statements for each of the years in the three-year period ended
Dec. 31, 1996. These statements are included in this prospectus.
Ernst & Young LLP is also the auditor for American Express Company,
the parent company of AEFC and IDSC.

Other certificates issued by IDSC: Your American Express financial
advisor can give you more information on four other certificates
issued by IDSC. These certificates offer a wide range of
investment terms and features.

IDS Cash Reserve Certificate - A single payment certificate that
permits additional investments on which IDSC guarantees interest in
advance for a three-month term.

IDS Installment Certificate - An installment payment certificate
that declares interest in advance for a three-month period and
offers bonuses in the third through sixth years for regular
investments.

IDS Preferred Investors Certificate - A single payment certificate
that combines a competitive fixed rate of return with IDSC's
guarantee of principal for large investments of $250,000 to $5
million.

IDS Stock Market Certificate - A single payment certificate that
calculates all or part of your interest based on stock market
performance, as measured by a broad market index, with IDSC's
guarantee of return of principal.

<PAGE>
PAGE 34
Appendix

Description of corporate bond ratings

Bond 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. Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca and C. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.

Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk. Interest and principal are secure.

Aa/AA - 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.

A - Considered upper-medium grade. Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.

Baa/BBB - Considered medium-grade obligations. Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.

Ba/BB - Considered to have speculative elements. The protection of
interest and principal payments may be very moderate.

B - Lack characteristics of more desirable investments. There may
be small assurance over any long period of time of the payment of
interest and principal.

Caa/CCC - Are of poor standing. Such issues may be in default or
there may be risk with respect to principal or interest.

Ca/CC - Represent obligations that are highly speculative. Such
issues are often in default or have other marked shortcomings.

C - Are obligations with a higher degree of speculation. These
securities have major risk exposures to default.

D - Are in payment default. The D rating is used when interest
payments or principal payments are not made on the due date.

Non-rated securities will be considered for investment. When
assessing each non-rated security, IDSC will consider the financial
condition of the issuer or the protection afforded by the terms of
the security.
<PAGE>
PAGE 35
(Back Cover)

Quick telephone reference

Client Service Organization/Transaction Line
Withdrawals, transfers, inquiries

National/Minnesota: 800-437-3133
Mpls./St. Paul area: 612-671-3800

TTY Service
For the hearing impaired
800-846-4293

American Express Easy Access Line

Current rate information
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 612-671-1630

Account value, cash transaction information (automated response,
TouchtoneR phones only)

National/Minnesota: 800-862-7919
Mpls./St. Paul area: 800-862-7919

IDS Flexible Savings Certificate
IDS Tower 10
Minneapolis, MN 55440-0010

Distributed by American Express Financial Advisors Inc.
<PAGE>
PAGE 36

Summary of selected financial information

The following selected financial information has been derived from
the audited financial statements and should be read in conjunction
with those statements and the related notes to financial
statements. Also see Management's Discussion and Analysis of
Financial Condition and Results of Operations for additional
comments.
<TABLE><CAPTION>

Year Ended Dec. 31, 1996 1995 1994 1993 1992
($ thousands)
Statement of Operations Data:
<S> <C> <C> <C> <C> <C>

Investment income $251,481 $256,913 $207,975 $236,859 $294,799
Investment expenses 62,851 62,817 58,690 65,404 69,630

Net investment income before provision for
certificate reserves and income tax benefit 188,630 194,096 149,285 171,455 225,169
Net provision for certificate reserves 171,968 176,407 107,288 123,516 178,175

Net investment income before income taxes 16,662 17,689 41,997 47,939 46,994
Income tax benefit 6,537 9,097 2,663 3,3651 1,666

Net investment income 23,199 26,786 44,660 51,304 58,660
Realized gain (loss) on investments - net:
Securities of unaffiliated issuers (444) 452 (7,514) (9,870) (9,498)
Other - unaffiliated 101 (120) 1,638 (418) (500)

Total gain (loss) on investments (343) 332 (5,876) (10,288) (9,998)
Income tax benefit (expense) 120 (117) 2,047 4,617 -

Net realized gain (loss) on investments (223) 215 (3,829) (5,671) (9,998)
Net income - wholly owned subsidiary 1,251 373 241 120 3

Net income $24,227 $27,374 $41,072 $45,753 $48,665

Dividends declared:
Cash $65,000 $- $40,200 $64,500 $83,750
In-kind(a) - - - - 64,558

Balance Sheet Data:
Total assets $3,563,234 $3,912,131 $3,040,857 $2,951,405 $3,444,985
Certificate loans 43,509 51,147 58,203 67,429 77,347
Certificate reserves 3,283,191 3,628,574 2,887,405 2,777,451 3,256,472
Stockholder's equity 194,550 250,307 141,852 161,138 179,885

IDS Certificate Company (IDSC) is 100% owned by American Express Financial Corporation (Parent).
</TABLE>
(a) Consisted of an investment security at amortized cost.
<PAGE>
PAGE 37

Management's discussion and analysis of financial condition and
results of operations

Results of operations:

IDS Certificate Company's (IDSC) earnings are derived primarily
from the after-tax yield on invested assets less investment
expenses and interest credited on certificate reserve liabilities.
Changes in earnings' trends occur largely due to changes in the
rates of return on investments and the rates of interest credited
to certificate owner accounts and also, the mix of fully taxable
and tax-advantaged investments in the IDSC portfolio.

During the years 1994 and 1995, total assets and certificate
reserves increased due to certificate sales exceeding certificate
maturities and surrenders. The excess of certificate sales over
certificate maturities and surrenders resulted primarily from
higher accrual rates declared by IDSC during the last six months of
1994 and the first six months of 1995, reflecting rising interest
rates in the marketplace. The increase in total assets in 1995
reflects also an increase of $81 million in net unrealized
appreciation on investment securities classified as available for
sale. The increase in total assets in 1994 was tempered by $23
million of net unrealized depreciation on investment securities
classified as available for sale, net of deferred taxes of $13
million.

During the year 1996, total assets and certificate reserves
decreased due primarily to certificate maturities and surrenders
exceeding certificate sales. The excess of certificate maturities
and surrenders over certificate sales resulted primarily from lower
accrual rates declared by IDSC during the year. The decrease in
total assets in 1996 reflects also, a decrease in unrealized
appreciation on investment securities classified as available for
sale of $23 million and cash dividends paid to Parent of $65
million. The decrease in total assets in 1996 was tempered by an
increase in payable for securities purchased of $62 million that
settled in early 1997.

1996 Compared to 1995:

Gross investment income decreased 2.1% due primarily to lower
investment yields.

Investment expenses increased slightly in 1996. The increase
resulted primarily from higher amortization of premiums paid for
index options of $2.1 million and higher investment advisory and
services fee of $.5 million due to a slightly higher average asset
base on which the fee is calculated. These increases were offset
by lower distribution fees of $1.2 million due to lower certificate
sales, and lower amortization of premiums paid for interest rate
caps/corridors of $1.4 million. The lower amortization of interest
rate caps/corridors reflects the net of $8.2 million lower
amortization and $6.8 million less interest earned under the
cap/corridor agreements.
<PAGE>
PAGE 38
Net provision for certificate reserves decreased 2.5% due primarily
to the net of lower accrual rates and a slightly higher average
balance of certificate reserves during 1996.

The decrease in income tax benefit resulted primarily from a lesser
portion of net investment income before income tax benefit being
attributable to tax-advantaged income.

1995 Compared to 1994:

Gross investment income increased 24% due primarily to a higher
average balance of invested assets and slightly higher investment
yields.

The 7.1% increase in investment expenses resulted primarily from
higher distribution fees due to higher sales of certificates that
provide for no deferral of those fees, and higher investment
advisory and services fee due to a higher asset base on which the
fee is calculated. These increases were partially offset by lower
amortization of the cost of options and interest rate
caps/corridors. The lower amortization of interest rate
caps/corridors reflects the net of $1.7 million of accelerated
amortization and $5.6 million higher interest earned under the
cap/corridor agreements.

Net provision for certificate reserves increased 65% reflecting a
higher average balance of certificate reserves and higher accrual
rates.

The increase in income tax benefit resulted primarily from a
greater portion of net investment income before income tax benefit
being attributable to tax-advantaged income.

Liquidity and cash flow:

IDSC's principal sources of cash are payments from sales of
face-amount certificates and cash flows from investments. In turn,
IDSC's principal uses of cash are payments to certificate owners
for matured and surrendered certificates, purchase of investments
and payments of dividends to its Parent.

Although total certificate sales decreased 41% in 1996 compared to
1995, certificate sales remained strong reflecting clients' ongoing
desire for safety of principal. Sales of certificates totaled
$1.0 billion in 1996 compared to $1.8 billion in 1995 and $1.5
billion during 1994. Certificate sales in 1995 benefited from the
special introductory promotion of IDSC's 11-month term Flexible
Savings certificate which generated sales of $562 million.

The special promotion of the 11-month term Flexible Savings
certificate was offered from May 10, 1995 to July 3, 1995, and
applied only to sales of new certificate accounts during the
promotion period. Certificates sold during the promotion period
received a special interest rate of 7.0% for the 11-month term.

Certificate maturities and surrenders totaled $1.7 billion during
1996 compared to $1.0 billion in 1995 and $1.2 billion in 1994.
The higher certificate maturities and surrenders in 1996 resulted
<PAGE>
PAGE 39

primarily from $461 million of surrenders of the 11-month Flexible
Savings certificate. The surrenders of the 11-month Flexible
Savings certificate resulted primarily from lower accrual rates
declared by IDSC at term renewal, reflecting interest rates
available in the marketplace.

IDSC, as an issuer of face-amount certificates, is affected
whenever there is a significant change in interest rates. In view
of the uncertainty in the investment markets and due to the
short-term repricing nature of certificate reserve liabilities,
IDSC continues to invest in securities that provide for more
immediate, periodic interest/principal payments, resulting in
improved liquidity. To accomplish this, IDSC continues to invest
much of its cash flow in mortgage-backed securities and
intermediate-term bonds.

IDSC's investment program is designed to maintain an investment
portfolio that will produce the highest possible after-tax yield
within acceptable risk standards with additional emphasis on
liquidity. The program considers investment securities as
investments acquired to meet anticipated certificate owner
obligations.

Under Statement of Financial Accounting Standards (SFAS) No. 115,
Accounting for Certain Investments in Debt and Equity Securities,
debt securities that IDSC has both the positive intent and ability
to hold to maturity are carried at amortized cost. Debt securities
IDSC does not have the positive intent to hold to maturity, as well
as all marketable equity securities, are classified as available
for sale and carried at fair value. The available-for-sale
classification does not mean that IDSC expects to sell these
securities, but that under SFAS No. 115 positive intent criteria,
these securities are available to meet possible liquidity needs
should there be significant changes in market interest rates
or certificate owner demand. See notes 1 and 3 to the financial
statements for additional information relating to SFAS No. 115.

At Dec. 31, 1996, securities classified as held to maturity and
carried at amortized cost were $.9 billion. Securities classified
as available for sale and carried at fair value were $2.2
billion. These securities, which comprise 88% of IDSC's total
invested assets, are well diversified. Of these securities, 98%
have fixed maturities of which 93% are of investment grade. Other
than U.S. Government Agency mortgage-backed securities, no one
issuer represents more than 1% of total securities. See note 3 to
financial statements for additional information on ratings and
diversification.

During the year ended Dec. 31, 1996, IDSC sold held-to-maturity
securities with an amortized cost and fair value of $2.3 million
and $1.8 million, respectively. The securities were sold due to
significant deterioration in the issuers' creditworthiness. In
addition, a held-to-maturity security with an amortized cost of $20
million was tendered for $23.2 million. By not accepting the
tender offer, Management believes it would have left IDSC
vulnerable to issuer's credit deterioration and it is reasonably
probable, impairment of investment and /or dividends would occur.
During the same period in 1996, securities classified as available<PAGE>
PAGE 40

for sale were sold with an amortized cost and fair value of $319
million and $314 million, respectively. The securities were sold
primarily to cover the cash outflows from surrenders of the
11-month Flexible Savings certificate.

During the year ended Dec. 31, 1995, investment securities,
primarily municipal bonds, with an amortized cost and fair value of
$112 million and $117 million, respectively, were reclassified
from held to maturity to available for sale. The reclassification
was made on Dec. 4, 1995, as a result of IDSC adopting the FASB
Special Report, A Guide to Implementation of Statement 115 on
Accounting for Certain Investments in Debt and Equity Securities.
There were no other transfers of securities during the years 1996
and 1995.

Derivative financial instruments:

IDSC enters into transactions involving interest rate caps, and
purchased and written call options to manage its exposure to rising
interest rates. IDSC does not enter into such transactions for
trading purposes. There is a possibility that the value of these
instruments will change due to fluctuations in a factor from which
the instruments derive their values. IDSC is not subject to this
market risk because these instruments are largely used to hedge
such risks, and therefore, the cash flow and income effects of the
instruments are inverse to the effects of the underlying
transactions. See note 9 to financial statements for additional
information regarding derivative financial instruments.

Dividends:

Cash dividends of $65 million were paid to IDSC's Parent in 1996.

Ratios:

The ratio of stockholder's equity, excluding net unrealized holding
gains on investment securities, to total assets less certificate
loans and net unrealized holding gains on investment securities
at Dec. 31, 1996 was 5.2% compared to 5.8% in 1995. IDSC's current
regulatory requirement is a ratio of 5.0%.

<PAGE>
PAGE 41
IDS Certificate Company

Responsibility for Preparation of Financial Statements

The management of IDS Certificate Company (IDSC) is responsible for
the preparation and fair presentation of its financial statements.
The financial statements have been prepared in conformity with
generally accepted accounting principles appropriate in the
circumstances, and include amounts based on the best judgment of
management. IDSC's management is also responsible for the
accuracy and consistency of other financial information included in
the prospectus.

In recognition of its responsibility for the integrity and
objectivity of data in the financial statements, IDSC maintains a
system of internal control over financial reporting. The system
is designed to provide reasonable, but not absolute, assurance with
respect to the reliability of IDSC's financial statements. The
concept of reasonable assurance is based on the notion
that the cost of the internal control system should not exceed the
benefits derived.

The internal control system is founded on an ethical climate and
includes an organizational structure with clearly defined lines of
responsibility, policies and procedures, a Code of Conduct, and the
careful selection and training of employees. Internal auditors
monitor and assess the effectiveness of the internal control system
and report their findings to management throughout the year.
IDSC's independent auditors are engaged to express an opinion on
the year-end financial statements and, with the coordinated support
of the internal auditors, review the financial records and related
data and test the internal control system over financial reporting.
<PAGE>
PAGE 42

Annual Financial Information

Report of Independent Auditors

The Board of Directors and Security Holders
IDS Certificate Company:

We have audited the accompanying balance sheets of IDS Certificate
Company, a wholly owned subsidiary of American Express Financial
Corporation, as of December 31, 1996 and 1995, and the related
statements of operations, stockholder's equity and cash flows for
each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the management
of IDS Certificate Company. Our responsibility is to express an
opinion on these financial statements 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 are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of
December 31, 1996 and 1995 by correspondence with custodians and
brokers. 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
Certificate Company at December 31, 1996 and 1995, and the results
of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally
accepted accounting principles.

As discussed in note 1 to the financial statements, IDS Certificate
Company changed its method of accounting for certain investments in
debt and equity securities in 1994.

ERNST & YOUNG LLP
Minneapolis, Minnesota
February 7, 1997
<PAGE>
PAGE 43
<TABLE><CAPTION>

Balance Sheets, Dec. 31,

Assets
<S> <C> <C>

Qualified Assets (note 2) 1996 1995
($ thousands)
Investments in unaffiliated issuers (notes 3, 4 and 10):
Cash and cash equivalents $111,331 $56,873
Held-to-maturity securities 863,921 1,002,905
Available-for-sale securities 2,212,968 2,408,491
First mortgage loans on real estate 218,697 233,394
Certificate loans - secured by certificate reserves 43,509 51,147
Investments in and advances to affiliates 6,444 5,655

Total investments 3,456,870 3,758,465

Receivables:
Dividends and interest 44,013 49,632
Investment securities sold 654 42,872

Total receivables 44,667 92,504

Other (notes 9 and 10) 36,164 32,778

Total qualified assets 3,537,701 3,883,747

Other Assets

Deferred distribution fees 25,525 28,286
Other 8 98

Total other assets 25,533 28,384

Total assets $3,563,234 $3,912,131

See notes to financial statements.
<PAGE>
PAGE 44
Balance Sheets, Dec. 31,

Liabilities and Stockholder's Equity

Liabilities 1996 1995
($ thousands)
Certificate Reserves (notes 5 and 10):
Installment certificates:
Reserves to mature $344,344 $330,415
Additional credits and accrued interest 21,931 21,555
Advance payments and accrued interest 1,198 1,394
Other 55 55
Fully paid certificates:
Reserves to mature 2,747,690 3,127,301
Additional credits and accrued interest 167,673 147,468
Due to unlocated certificate holders 300 386

Total certificate reserves 3,283,191 3,628,574

Accounts Payable and Accrued Liabilities:
Due to Parent (note 7A) 1,424 1,541
Due to Parent for federal income taxes 1,737 103
Due to affiliates (note 7B, 7C and 7D) 279 2,068
Payable for investment securities purchased 61,979 -
Accounts payable, accrued expenses and other (notes 9 and 10) 11,977 12,249

Total accounts payable and accrued liabilities 77,396 15,961

Deferred federal income taxes (note 8) 8,097 17,289

Total liabilities 3,368,684 3,661,824

Commitments (note 4)

Stockholder's Equity (notes 5B, 5C, and 6):

Common stock, $10 par - authorized and issued 150,000 shares 1,500 1,500
Additional paid-in capital 143,844 168,844
Retained earnings:
Appropriated for predeclared additional credits/interest 11,989 18,878
Appropriated for additional interest on advance payments 50 50
Unappropriated 22,728 31,612
Unrealized holding gains on investment
securities - net (note 3A) 14,439 29,423

Total stockholder's equity 194,550 250,307

Total liabilities and stockholder's equity $3,563,234 $3,912,131

See notes to financial statements.
<PAGE>
PAGE 45
Statements of Operations

Year ended Dec. 31, 1996 1995 1994
($thousands)
Investment Income:
Interest income from investments:
Bonds and notes:
Unaffiliated issuers $184,653 $181,902 $125,546
Mortgage loans on real estate:
Unaffiliated 19,583 22,171 24,006
Affiliated 36 56 68
Certificate loans 2,533 2,963 3,342
Dividends 44,100 48,614 54,170
Other 576 1,207 843

Total investment income 251,481 256,913 207,975

Investment Expenses:
Parent and affiliated company fees (note 7):
Distribution 32,732 33,977 27,007
Investment advisory and services 16,989 16,472 13,565
Depositary 228 242 183
Options (note 9) 10,156 8,038 9,854
Interest rate caps/corridors (note 9) 2,351 3,725 7,608
Other 395 363 473

Total investment expenses 62,851 62,817 58,690

Net investment income before provision
for certificate reserves and income
tax benefit $188,630 $194,096 $149,285

See notes to financial statements.

<PAGE>
PAGE 46
Statements of Operations (continued)

Year ended Dec. 31, 1996 1995 1994
($thousands)
Provision for Certificate Reserves (notes 5 and 9):
According to the terms of the certificates:
Provision for certificate reserves $10,445 $11,009 $13,317
Interest on additional credits 1,487 2,300 3,174
Interest on advance payments 61 73 61
Additional credits/interest authorized by IDSC:
On fully paid certificates 155,411 157,857 85,101
On installment certificates 5,637 6,288 6,741

Total provision before reserve recoveries 173,041 177,527 108,394
Reserve recoveries from terminations
prior to maturity (1,073) (1,120) (1,106)

Net provision for certificate reserves 171,968 176,407 107,288

Net investment income before income tax benefit 16,662 17,689 41,997
Income tax benefit (note 8) 6,537 9,097 2,663

Net investment income 23,199 26,786 44,660

Realized gain (loss) on investments - net:
Securities of unaffiliated issuers (444) 452 (7,514)
Other-unaffiliated 101 (120) 1,638

Total gain (loss) on investments (343) 332 (5,876)

Income tax benefit (expense) (note 8):
Current 772 160 2,414
Deferred (652) (277) (367)

Total income tax benefit (expense) 120 (117) 2,047

Net realized gain (loss) on investments (223) 215 (3,829)

Net income - wholly owned subsidiary 1,251 373 241

Net income $24,227 $27,374 $41,072

See notes to financial statements.

<PAGE>
PAGE 47
Statements of Stockholder's Equity

Year ended Dec. 31, 1996 1995 1994
($thousands)

Common Stock:
Balance at beginning and end of year $1,500 $1,500 $1,500

Additional Paid-in Capital:
Balance at beginning of year $168,844 $140,344 $147,144

Contribution from Parent - 28,500 3,000
Cash dividends declared (25,000) - (9,800)

Balance at end of year $143,844 $168,844 $140,344

Retained Earnings:
Appropriated for predeclared additional credits/interest (note 5B):
Balance at beginning of year $18,878 $18,398 $2,726
Transferred from (to) unappropriated
retained earnings (6,889) 480 15,672

Balance at end of year $11,989 $18,878 $18,398

Appropriated for additional interest on advance payments (note 5C):
Balance at beginning of year $50 $50 $25
Transferred from (to) unappropriated
retained earnings - - 25

Balance at end of year $50 $50 $50

Unappropriated (note 6):
Balance at beginning of year $31,612 $4,718 $9,743
Net income 24,227 27,374 41,072
Transferred (to) from appropriated
retained earnings 6,889 (480) (15,697)
Cash dividends declared (40,000) - (30,400)

Balance at end of year $22,728 $31,612 $4,718

Unrealized holding gains and losses on investment securities -
net (notes 1 and 3A):
Balance at beginning of year $29,423 ($23,158) $-
Adjustment due to initial application of SFAS 115 - - 8,827
Change during year (14,984) 52,581 (31,985)

Balance at end of year $14,439 $29,423 ($23,158)

Total stockholder's equity $194,550 $250,307 $141,852

See notes to financial statements.
<PAGE>
PAGE 48
Statements of Cash Flows

Year ended Dec. 31, 1996 1995 1994
($ thousands)
Cash flows from operating activities:
Net income $24,227 $27,374 $41,072
Adjustments to reconcile net income to net
cash provided by operating activities:
Net income of wholly owned subsidiary (1,251) (373) (241)
Provision for certificate reserves 171,968 176,407 107,288
Interest income added to certificate loans (1,631) (1,902) (2,133)
Amortization of premium/discount-net 14,039 19,232 22,114
Net loss (gain) on investments 343 (332) 5,876
Decrease (increase) in dividends and
interest receivable 5,619 (7,371) (1,829)
Decrease (increase) in deferred
distribution fees 2,761 (1,144) (7,527)
Decrease (increase) in other assets - 466 (466)
Decrease (increase) in deferred federal
income taxes (1,124) (2,652) 4,263
Decrease in other liabilities (679) (1,549) (3,210)

Net cash provided by operating activities 214,272 208,156 165,207

Cash flows from investing activities:
Maturity and redemption of investments:
Held-to-maturity securities 163,066 315,766 350,411
Available-for-sale securities 537,565 325,521 173,547
Other investments 52,189 46,004 35,130
Sale of investments:
Held-to-maturity securities 24,984 22,305 3,164
Available-for-sale securities 356,194 48,372 267,808
Other investments 385 21 -
Certificate loan payments 6,003 6,061 7,508
Purchase of investments:
Held-to-maturity securities (49,984) (208,140) (46,080)
Available-for-sale securities (617,138) (1,397,983) (830,826)
Other investments (28,617) (17,234) (9,208)
Certificate loan fundings (5,288) (7,776) (7,603)
Investment in subsidiary - - (450)

Net cash provided by (used in)
investing activities $439,359 ($867,083) ($56,599)

See notes to financial statements.
<PAGE>
PAGE 49
Statements of Cash Flows (continued)

Year ended Dec. 31, 1996 1995 1994
($ thousands)

Cash flows from financing activities:
Payments from certificate owners $1,129,023 $1,577,884 $1,185,762

Capital contribution from Parent - 28,500 3,000
Certificate maturities and cash surrenders (1,663,196) (1,030,712) (1,171,101)
Dividends paid (65,000) - (40,200)

Net cash provided by (used in)
financing activities (599,173) 575,672 (22,539)

Net increase (decrease) in cash and
cash equivalents 54,458 (83,255) 86,069
Cash and cash equivalents beginning of year 56,873 140,128 54,059

Cash and cash equivalents end of year $111,331 $56,873 $140,128

Supplemental disclosures including non-cash transactions:
Cash received for income taxes $7,195 $6,854 $2,416
Certificate maturities and surrenders through
loan reductions 8,554 10,673 11,454

See notes to financial statements.
</TABLE>
<PAGE>
PAGE 50
Notes to Financial Statements ($ in thousands unless indicated
otherwise)

1. Nature of business and summary of significant accounting
policies

Nature of business

IDS Certificate Company (IDSC) is a wholly owned subsidiary of
American Express Financial Corporation (Parent), which is a wholly
owned subsidiary of American Express Company. IDSC is registered
as an investment company under the Investment Company Act of 1940
(the 1940 Act) and is in the business of issuing face-amount
investment certificates. The certificates issued by IDSC are not
insured by any government agency. IDSC's certificates are sold
primarily by American Express Financial Advisors Inc.'s (an
affiliate) field force operating in 50 states, the District of
Columbia and Puerto Rico. IDSC's Parent acts as investment advisor
for IDSC.

IDSC currently offers nine types of certificates with specified
maturities ranging from four to twenty years. Within their
specified maturity, most certificates have interest rate terms of
one to thirty-six months. In addition, one type of certificate has
interest tied, in whole or in part, to any upward movement in a
broad-based stock market index. Except for three types of
certificates, all of the certificates are available as qualified
investments for Individual Retirement Accounts or 401(k) plans and
other qualified retirement plans.

IDSC's gross income is derived primarily from interest and
dividends generated by its investments. IDSC's net income is
determined by deducting from such gross income its provision for
certificate reserves, and other expenses, including taxes, the fee
paid to Parent for investment advisory and other services, and the
distribution fees paid to American Express Financial Advisors Inc.

Described below are certain accounting policies that are important
to an understanding of the accompanying financial statements.

Basis of financial statement presentation

The accompanying financial statements are presented in accordance
with generally accepted accounting principles. IDSC uses the
equity method of accounting for its wholly owned unconsolidated
subsidiary, which is the method prescribed by the Securities and
Exchange Commission (SEC) for issuers of face-amount certificates.
Certain amounts from prior years have been reclassified to
conform to the current year presentation.

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities and the reported amounts of income and expenses during
the year then ended. Actual results could differ from those
estimates.

<PAGE>
PAGE 51
Notes to Financial Statements (continued)

Fair values of financial instruments

The fair values of financial instruments disclosed in the notes to
financial statements are estimates based upon current market
conditions and perceived risks, and require varying degrees of
management judgment.

Preferred stock dividend income

IDSC recognizes dividend income from cumulative redeemable
preferred stocks with fixed maturity amounts on an accrual basis
similar to that used for recognizing interest income on debt
securities. Dividend income from perpetual preferred stock is
recognized on an ex-dividend basis.

Securities

Cash equivalents are carried at amortized cost, which approximates
fair value. IDSC has defined cash and cash equivalents as cash in
banks and highly liquid investments with a maturity of three months
or less at acquisition and are not interest rate sensitive.

As of Jan. 1, 1994, IDSC adopted Statement of Financial Accounting
Standards (SFAS) No. 115, Accounting for Certain Investments in
Debt and Equity Securities. Under the new rules, debt securities
that IDSC has both the positive intent and ability to hold to
maturity are carried at amortized cost. Debt securities IDSC does
not have the positive intent to hold to maturity, as well as all
marketable equity securities, are classified as available for
sale and carried at fair value. Unrealized holding gains and
losses on securities classified as available for sale are carried,
net of deferred income taxes, as a separate component of
stockholder's equity. The opening balance of stockholder's equity
was incresed by $8,827 (net of $4,752 in deferred income taxes) to
reflect the net unrealized holding gains on securities classified
as available for sale previously carried at amortized cost or the
lower of cost or market.

The basis for determining cost in computing realized gains and
losses on securities is specific identification. When there is a
decline in value that is other than temporary, the securities are
carried at estimated realizable value with the amount of adjustment
included in income.

First mortgage loans on real estate

Mortgage loans are carried at amortized cost, less reserves for
losses, which is the basis for determining any realized gains or
losses. The estimated fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities.

<PAGE>
PAGE 52
Notes to Financial Statements (continued)

Impairment is measured as the excess of the loan's recorded
investment over its present value of expected principal and
interest payments discounted at the loan's effective interest rate,
or the fair value of collateral. The amount of the impairment is
recorded in a reserve for mortgage loan losses.

The reserve for mortgage loan losses is maintained at a level that
management believes is adequate to absorb estimated losses in the
portfolio. The level of the reserve account is determined based on
several factors, including historical experience, expected future
principal and interest payments, estimated collateral values, and
current and anticipated economic and political conditions.
Management regularly evaluates the adequacy of the reserve for
mortgage loan losses.

IDSC generally stops accruing interest on mortgage loans for which
interest payments are delinquent more than three months. Based on
Management's judgement as to the ultimate collectibility of
principal, interest payments received are either recognized as
income or applied to the recorded investment in the loan.

Certificates

Investment certificates may be purchased either with a lump-sum
payment or by installment payments. Certificate owners are
entitled to receive at maturity a definite sum of money. Payments
from certificate owners are credited to investment certificate
reserves. Investment certificate reserves accumulate at specified
percentage rates as declared by IDSC. Reserves also are maintained
for advance payments made by certificate owners, accrued interest
thereon, and for additional credits in excess of minimum guaranteed
rates and accrued interest thereon. On certificates allowing
for the deduction of a surrender charge, the cash surrender values
may be less than accumulated investment certificate reserves prior
to maturity dates. Cash surrender values on certificates allowing
for no surrender charge are equal to certificate reserves. The
payment distribution, reserve accumulation rates, cash surrender
values, reserve values and other matters are governed by the 1940
Act.

Deferred distribution fee expense

On certain series of certificates, distribution fees are deferred
and amortized over the estimated lives of the related certificates,
which is approximately 10 years. Upon surrender, unamortized
deferred distribution fees and any related surrender charges are
recognized in income.

Federal income taxes

IDSC's taxable income or loss is included in the consolidated
federal income tax return of American Express Company. IDSC
provides for income taxes on a separate return basis, except that,
under an agreement between Parent and American Express Company, tax
benefits are recognized for losses to the extent they can be used <PAGE>
PAGE 53
Notes to Financial Statements (continued)

in the consolidated return. It is the policy of Parent and its
subsidiaries that Parent will reimburse a subsidiary for any tax
benefits recorded.

2. Deposit of assets and maintenance of qualified assets

A) Under the provisions of its certificates and the 1940 Act, IDSC
was required to have qualified assets (as that term is defined in
Section 28(b) of the 1940 Act) in the amount of $3,259,260 and
$3,619,188 at Dec. 31, 1996 and 1995, respectively. IDSC had
qualified assets of $3,453,508 at Dec. 31, 1996 and $3,838,482 at
Dec. 31, 1995, excluding net unrealized appreciation on
available-for-sale securities of $22,214 and $45,265 at Dec.
31,1996 and 1995, respectively and payable for securities purchased
of $61,979 and $nil at Dec. 31, 1996 and 1995,
respectively.

Qualified assets are valued in accordance with such provisions of
Minnesota Statutes as are applicable to investments of life
insurance companies. Qualified assets for which no provision for
valuation is made in such statutes are valued in accordance with
rules, regulations or orders prescribed by the SEC. These values
are the same as financial statement carrying values, except for
debt securities classified as available for sale and all marketable
equity securities, which are carried at fair value in the financial
statements but are valued at amortized cost for qualified asset and
deposit maintenance purposes.

B) Pursuant to provisions of the certificates, the 1940 Act, the
central depositary agreement and to requirements of various states,
qualified assets of IDSC were deposited as follows:
<TABLE><CAPTION>

Dec. 31, 1996

Required
Deposits deposits Excess
<S> <C> <C> <C>
Deposits to meet certificate
liability requirements:
States $362 $330 $32
Central Depositary 3,355,041 3,203,076 151,965

Total $3,355,403 $3,203,406 $151,997

<PAGE>
PAGE 54
Notes to Financial Statements (continued)
Dec. 31, 1995

Required
Deposits deposits Excess
Deposits to meet certificate
liability requirements:
States $414 $384 $30
Central Depositary 3,678,295 3,548,334 129,961

Total $3,678,709 $3,548,718 $129,991

</TABLE>

The assets on deposit at Dec. 31, 1996 and 1995 consisted of
securities having a deposit value of $3,117,715 and $3,435,074,
respectively; mortgage loans of $218,697 and $229,554,
respectively; and other assets of $18,991 and $14,081,
respectively. Mortgage loans on deposit include an affiliated
mortgage loan at Dec. 31, 1995.

American Express Trust Company is the central depositary for IDSC.
See note 7C.

3. Investments in securities

A) Fair values of investments in securities represent market
prices or estimated fair values when quoted prices are not
available. Estimated fair values are determined by IDSC using
established procedures, involving review of market indexes, price
levels of current offerings and comparable issues, price estimates
and market data from independent brokers and financial files. The
procedures are reviewed annually. IDSC's vice president -
investments reports to the board of directors on an annual basis
regarding such pricing sources and procedures to provide assurance
that fair value is being achieved.

The following is a summary of securities held to maturity and
securities available for sale at Dec. 31, 1996 and Dec. 31, 1995.
<TABLE><CAPTION>

Dec. 31, 1996
Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses
<S> <C> <C> <C> <C>
HELD TO MATURITY
U.S. Government and agencies obligations $362 $365 $4 $1
Mortgage-backed securities 38,435 38,834 743 344
Corporate debt securities 266,642 274,235 8,447 854
Stated maturity preferred stock 558,482 576,603 19,513 1,392

$863,921 $890,037 $28,707 $2,591
AVAILABLE FOR SALE
Mortgage-backed securities $1,009,738 $1,021,603 $14,164 $2,299
State and municipal obligations 55,876 57,726 1,850 -
Corporate debt securities 1,000,316 1,008,077 10,808 3,047
Stated maturity preferred stock 52,458 52,139 109 428
Perpetual preferred stock 68,000 68,282 317 35
Common stock 4,366 5,141 775 -

$2,190,754 $2,212,968 $28,023 $5,809
<PAGE>
PAGE 55
Notes to Financial Statements (continued)

Dec. 31, 1995

Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses
<S> <C> <C> <C> <C>
HELD TO MATURITY
U.S. Government and agencies obligations $415 $427 $12 $-
Mortgage-backed securities 54,477 55,708 1,234 3
Corporate debt securities 333,861 348,860 15,029 30
Stated maturity preferred stock 614,152 643,436 30,072 788

$1,002,905 $1,048,431 $46,347 $821
AVAILABLE FOR SALE
Mortgage-backed securities $1,321,051 $1,340,956 $21,349 $1,444
State and municipal obligations 101,399 105,680 4,281 -
Corporate debt securities 918,792 939,878 22,638 1,552
Stated maturity preferred stock 21,229 21,365 192 56
Common stock 755 612 - 143

$2,363,226 $2,408,491 $48,460 $3,195
</TABLE>

The amortized cost and fair value of securities held to maturity
and available for sale, by contractual maturity, at Dec. 31, 1996,
are shown below. Cash flows will differ from contractual
maturities because issuers may have the right to call or prepay
obligations.

Amortized Fair
cost value

HELD TO MATURITY
Due within 1 year $34,448 $34,948
Due after 1 through 5 years 400,592 414,987
Due after 5 years through 10 years 211,557 217,449
Due after 10 years 178,889 183,819
825,486 851,203
Mortgage-backed securities 38,435 38,834

$863,921 $890,037

AVAILABLE FOR SALE
Due within 1 year $109,402 $109,963
Due after 1 through 5 years 642,863 647,886
Due after 5 years through 10 years 204,675 207,250
Due after 10 years 151,710 152,843

1,108,650 1,117,942

Mortgage-backed securities 1,009,738 1,021,603

Perpetual preferred stock 68,000 68,282
Common stock 4,366 5,141

$2,190,754 $2,212,968

During the years ended Dec. 31, 1996 and 1995, there were no
securities classified as trading securities.

<PAGE>
PAGE 56
Notes to Financial Statements (continued)

The proceeds from sales of available-for-sale securities and the
gross realized gains and gross realized losses on those sales
during the years ended Dec. 31, 1996, 1995 and 1994, were as
follows:

1996 1995 1994

Proceeds $313,976 $83,970 $265,008

Gross realized gains 456 36 363
Gross realized losses 5,836 1,854 10,140

Sales of held-to-maturity securities, due to significant credit
deterioration, during the years ended Dec. 31, 1996, 1995 and 1994,
were as follows:

1996 1995 1994

Amortized cost $22,297 $22,782 $3,158

Gross realized gains 3,200 2 5
Gross realized losses 513 479 -

During the year ended Dec. 31, 1996, no securities were
reclassified from held to maturity to available for sale. During
the year ended Dec. 31, 1995, securities with an amortized cost
and fair value of $111,967 and $116,882, respectively, were
reclassified from held to maturity to available for sale. The
reclassification was made on Dec. 4, 1995, as a result of
adopting the FASB Special Report, A Guide to Implementation of
Statement 115 on Accounting for Certain Investments in Debt and
Equity Securities.

B) Investments in securities with fixed maturities comprised 85%
and 90% of IDSC's total invested assets at Dec. 31, 1996 and 1995,
respectively. Securities are rated by Moody's and Standard & Poors
(S&P), or by Parent's internal analysts, using criteria similar to
Moody's and S&P, when a public rating does not exist. A summary of
investments in securities with fixed maturities by rating of
investment is as follows:

Rating 1996 1995

Aaa/AAA 41% 44%
Aa/AA 1 2
Aa/A 1 2
A/A 20 23
A/BBB 6 6
Baa/BBB 24 20
Below investment grade 7 3

100% 100%

<PAGE>
PAGE 57
Notes to Financial Statements (continued)

Of the securities rated Aaa/AAA, 87% at Dec. 31, 1996 and 92% at
Dec. 31, 1995 are U.S. Government Agency mortgage-backed securities
that are not rated by a public rating agency. Approximately 11% at
Dec. 31, 1996 and 1995 of other securities with fixed maturities
are rated by Parent's internal analysts. At Dec. 31, 1996 and 1995
no one issuer, other than U.S. Government Agency mortgage-backed
securities, is greater than 1% of IDSC's total investment in
securities with fixed maturities.

C) IDSC reserves freedom of action with respect to its acquisition
of restricted securities that offer advantageous and desirable
investment opportunities. In a private negotiation, IDSC may
purchase for its portfolio all or part of an issue of restricted
securities. Since IDSC would intend to purchase such securities
for investment and not for distribution, it would not be acting as
a distributor if such securities are resold by IDSC at a later
date.

The fair values of restricted securities are determined by the
board of directors using the procedures and factors described in
note 3A.

In the event IDSC were to be deemed to be a distributor of the
restricted securities, it is possible that IDSC would be required
to bear the costs of registering those securities under the
Securities Act of 1933, although in most cases such costs would be
borne by the issuer of the restricted securities.

4. Investments in first mortgage loans on real estate

At Dec. 31, 1996 and 1995, IDSC's recorded investment in impaired
mortgage loans was $847 and $1,004, respectively, and the reserve
for loss on those amounts was $611. During 1996 and 1995, the
average recorded investment in impaired mortgage loans was $925 and
$1,052, respectively.

IDSC recognized $88 and $53 of interest income related to impaired
mortgage loans for the years ended Dec. 31, 1996 and 1995,
respectively.

There were no changes in the reserve for loss on mortgage loans of
$611 during the years ended Dec. 31, 1996 and 1995.

At Dec. 31, 1996 and 1995, approximately 6% of IDSC's invested
assets were first mortgage loans on real estate. A summary of
first mortgage loans by region and type of real estate is as
follows:

Region 1996 1995

South Atlantic 22% 22%
East North Central 21 22
West North Central 17 19
Mountain 15 9
Middle Atlantic 14 17
<PAGE>
PAGE 58
Notes to Financial Statements (continued)

West South Central 5 5
Pacific 3 3
New England 3 3

100% 100%

Property Type 1996 1995

Retail/shopping centers 36% 32%
Apartments 33 39
Industrial buildings 13 12
Office buildings 9 8

Retirement homes - 1

Other 9 8

100% 100%

The carrying amounts and fair values of first mortgage loans on
real estate are as follows at Dec. 31. The fair values are
estimated using discounted cash flow analysis, using market
interest rates currently being offered for loans with similar
maturities.
<TABLE><CAPTION>
Dec. 31, 1996 Dec. 31, 1995
Carrying Fair Carrying Fair
amount value amount value
<S> <C> <C> <C> <C>
First mortgage loans on real estate $219,308 $221,253 $234,005 $248,860
Reserve for losses (611) - (611) -

Net first mortgage loans on real estate $218,697 $221,253 $233,394 $248,860
</TABLE>
At Dec. 31, 1996 and 1995, commitments for fundings of first
mortgage loans, at market interest rates, aggregated $9,300 and
$nil, respectively. IDSC employs policies and procedures to
ensure the creditworthiness of the borrowers and that funds will be
available on the funding date. IDSC's loan fundings are restricted
to 80% or less of the market value of the real estate at the time
of the loan funding. Management believes there is no fair value
for these commitments.

5. Certificate reserves

Reserves maintained on outstanding certificates have been computed
in accordance with the provisions of the certificates and Section
28 of the 1940 Act. The average rates of accumulation on
certificate reserves at Dec. 31, 1996 and 1995 were:
<TABLE><CAPTION>
1996
Average Average
gross additional
Reserve accumulation credit
balance rate rate
<S> <C> <C> <C>
Installment certificates:
Reserves to mature:
With guaranteed rates $32,512 3.50% 1.35%
Without guaranteed rates (A) 311,832 - 2.97
Additional credits and accrued interest 21,931 3.14 -
Advance payments and accrued interest (C) 1,198 3.15 1.70<PAGE>
PAGE 59
Notes to Financial Statements (continued)

Other 55 - -
Fully paid certificates:
Reserves to mature:
With guaranteed rates 187,272 3.23 1.79
Without guaranteed rates (A) and (D) 2,560,418 - 5.03
Additional credits and accrued interest 167,673 3.23 -
Due to unlocated certificate holders 300 - -
$3,283,191

1995
Average Average
gross additional
Reserve accumulation credit
balance rate rate

Installment certificates:
Reserves to mature:
With guaranteed rates $40,232 3.50% 1.35%
Without guaranteed rates (A) 290,183 - 3.23
Additional credits and accrued interest 21,555 3.13 -
Advance payments and accrued interest 1,394 3.13 1.72
Other 55 - -
Fully paid certificates:
Reserves to mature:
With guaranteed rates 210,365 3.24 1.85
Without guaranteed rates (A) and (D) 2,916,936 - 5.70
Additional credits and accrued interest 147,468 3.26 -
Due to unlocated certificate holders 386 - -

$3,628,574
</TABLE>
A) There is no minimum rate of accrual on these reserves. Interest
is declared periodically, quarterly or annually, in accordance with
the terms of the separate series of certificates.

B) On certain series of single payment certificates, additional
interest is predeclared for periods greater than one year. At Dec.
31, 1996, $11,989 of retained earnings had been appropriated for
the predeclared additional interest, which represents the
difference between certificate reserves on these series, calculated
on a statutory basis, and the reserves maintained per books.

C) Certain series of installment certificates guarantee accrual of
interest on advance payments at an average of 3.15%. IDSC has
increased the rate of accrual to 4.85% through April 30, 1998. An
appropriation of retained earnings amounting to $50 has been made,
which represents the estimated additional accrual that will result
from the increase granted by IDSC.

D) IDS Stock Market Certificate enables the certificate owner to
participate in any relative rise in a major stock market index
without risking loss of principal. Generally the certificate has a
term of 12 months and may continue for up to 14 successive terms.
The reserve balance at Dec. 31, 1996 and 1995 was $309,570 and
$211,093, respectively.

E) The carrying amounts and fair values of certificate reserves
consisted of the following at Dec. 31, 1996 and 1995. Fair values
of certificate reserves with interest rate terms of one year or
less approximated the carrying values less any applicable surrender
charges.

<PAGE>
PAGE 60
Notes to Financial Statements (continued)

The fair values for other certificate reserves are determined by a
discounted cash flow analysis using interest rates currently
offered for certificates with similar remaining terms, less
any applicable surrender charges.
<TABLE><CAPTION>

1996 1995
Carrying Fair Carrying Fair
amount value amount value
<S> <C> <C> <C> <C>
Reserves with terms of one year or less $2,637,144 $2,635,835 $2,900,947 $2,899,542
Other 646,047 630,141 727,627 765,110

Total certificate reserves 3,283,191 3,265,976 3,628,574 3,664,652
Unapplied certificate transactions 1,217 1,217 1,545 1,545
Certificate loans and accrued interest (43,980) (43,980) (51,707) (51,707)

Total $3,240,428 $3,223,213 $3,578,412 $3,614,490
</TABLE>

6. Dividend restriction

Certain series of installment certificates outstanding provide that
cash dividends may be paid by IDSC only in calendar years for which
additional credits of at least one-half of 1% on such series of
certificates have been authorized by IDSC. This restriction has
been removed for 1997 and 1998 by IDSC's declaration of additional
credits in excess of this requirement.

7. Fees paid to Parent and affiliated companies ($ not in
thousands)

A) The basis of computing fees paid or payable to Parent for
investment advisory and other general and administrative services
is:

The investment advisory and services agreement with Parent provides
for a graduated scale of fees equal on an annual basis to 0.75% on
the first $250 million of total book value of assets of IDSC, 0.65%
on the next $250 million, 0.55% on the next $250 million, 0.50% on
the next $250 million and 0.45% on the amount in excess of $1
billion. The fee is payable monthly in an amount equal to
one-twelfth of each of the percentages set forth above. Excluded
from assets for purposes of this computation are first mortgage
loans, real estate and any other asset on which IDSC pays an
outside service fee.

B) The basis of computing fees paid or payable to American Express
Financial Advisors Inc. (an affiliate) for distribution services
is:

Fees payable to American Express Financial Advisors Inc. on sales
of IDSC's certificates are based upon terms of agreements giving
American Express Financial Advisors Inc. the exclusive right to
distribute the certificates covered under the agreements. The
agreements provide for payment of fees over a period of time. The
aggregate fees payable under the agreements per $1,000 face amount
of installment certificates and $1,000 purchase price of single
payments, and a summary of the periods over which the fees are
payable, shown by series are: <PAGE>
PAGE 61
<TABLE><CAPTION>

Number of
certificate
years over
Aggregate fees payable which
subsequent
First Subsequent years' fees
Total year years are payable
<S> <C> <C> <C> <C>
Installment certificates(a) $30.00 $6.00 $24.00 4
Single-payment certificates 60.00 60.00 - -
Future Value certificates 50.00 50.00 - -
</TABLE>

(a) At the end of the sixth through the 10th year, an additional
fee is payable of 0.5% of the daily average balance of the
certificate reserve maintained during the sixth through the 10th
year, respectively.

Fees on Cash Reserve and Flexible Savings certificates are paid at
a rate of 0.25% of the purchase price at the time of issuance and
0.25% of the reserves maintained for these certificates at the
beginning of the second and subsequent quarters from issue date.

Fees on the Investors Certificate are paid at an annualized rate of
1% of the reserves maintained for the certificates. Fees are paid
at the end of each term on certificates with a one, two or
three-month term. Fees are paid each quarter from date of issuance
on certificates with a six, 12, 24 or 36-month term.

Fees on the Preferred Investors Certificate are paid at an
annualized rate of 0.66% of the reserves maintained for the
certificates. Fees are paid at the end of each term on
certificates with a one, two or three-month term. Fees are paid
each quarter from date of issuance on certificates with a six, 12,
24 or 36-month term.

Fees on the Stock Market Certificate are paid at a rate of 1.25% of
the purchase price on the first day of the certificate's term and
1.25% of the reserves maintained for these certificates at the
beginning of each subsequent term.

C) The basis of computing depositary fees paid or payable to
American Express Trust Company (an affiliate) is:

<TABLE><CAPTION>
<S> <C>
Maintenance charge per account 5 cents per $1,000 of assets on deposit

Transaction charge $20 per transaction

Security loan activity:
Depositary Trust Company
receive/deliver $20 per transaction
Physical receive/deliver $25 per transaction
Exchange collateral $15 per transaction
</TABLE>
A transaction consists of the receipt or withdrawal of securities
and commercial paper and/or a change in the security position. The
charges are payable quarterly except for maintenance, which is an
annual fee. <PAGE>
PAGE 62
Notes to Financial Statements (continued)

D) The basis for computing fees paid or payable to American
Express Bank Ltd. (an affiliate) for the distribution of the IDS
Special Deposits certificate on an annualized basis is:

1.25% of the reserves maintained for the certificates on an amount
from $100,000 to $249,000, 0.80% on an amount from $250,000 to
$499,000, 0.65% on an amount from $500,000 to $999,000 and 0.50% on
an amount $1,000,000 or more. Fees are paid at the end of each
term on certificates with a one, two or three-month term. Fees are
paid at the end of each quarter from date of issuance on
certificates with a six, 12, 24 or 36-month term.

8. Income taxes

Income tax expense (benefit) as shown in the statement of
operations for the three years ended Dec. 31, consists of:

1996 1995 1994

Federal:
Current ($5,560) ($6,285) ($8,743)
Deferred (1,124) (2,652) 3,933
(6,684) (8,937) (4,810)
State 27 (43) 100

Total tax benefit ($6,657) ($8,980) ($4,710)

Income tax expense (benefit) differs from that computed by using
the U.S. Statutory rate of 35%. The principal causes of the
difference in each year are shown below:
<TABLE><CAPTION>

1996 1995 1994
<S> <C> <C> <C>

Federal tax expense at U.S. statutory rate $5,711 $6,307 $12,642
Tax-exempt interest (1,517) (3,339) (4,205)
Dividend exclusion (10,865) (12,166) (13,862)
Other, net (13) 261 615

Federal tax benefit ($6,684) ($8,937) ($4,810)
</TABLE>
Deferred income taxes result from the net tax effects of temporary
differences. Temporary differences are differences between the tax
bases of assets and liabilities and their reported amounts in the
financial statements that will result in differences between income
for tax purposes and income for financial statement purposes in
future years. Principal components of IDSC's deferred tax assets
and liabilities as of Dec. 31, are as follows.

<PAGE>
PAGE 63
Notes to Financial Statements (continued)

Deferred tax assets: 1996 1995

Certificate reserves $13,028 $10,312
Investment reserves 540 843
Investments - 348
Other, net 19 -

Total deferred tax assets $13,587 $11,503

Deferred tax liabilities: 1996 1995

Deferred distribution fees $8,934 $9,900
Investment unrealized gains 7,775 15,843
Purchased/written call options 3,429 1,623
Dividends receivable 745 892
Investments 714 -
Return of capital dividends 87 305
Other, net - 229

Total deferred tax liabilities 21,684 28,792

Net deferred tax liabilities $8,097 $17,289

9. Derivative financial instruments

IDSC enters into transactions involving derivative financial
instruments as an end user(nontrading). IDSC uses these
instruments to manage its exposure to interest rate risk, including
hedging specific transactions. IDSC manages risks associated with
these instruments as described below.

Market risk is the possibility that the value of the derivative
financial instrument will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate or a major market index. IDSC is not impacted by market risk
related to derivatives held because derivatives are largely used to
manage risk and, therefore, the cash flows and income effects of
the derivatives are inverse to the effects of the underlying hedged
transactions.

Credit exposure is the possibility that the counterparty will not
fulfill the terms of the contract. IDSC monitors credit exposure
related to derivative financial instruments through established
approval procedures, including setting concentration limits by
counterparty, reviewing credit ratings and requiring collateral
where appropriate. At Dec. 31, 1996, IDSC's counterparties to the
interest rate corridors are rated AA or better by nationally
recognized rating agencies. The counterparties to the call options
are seven major broker/dealers.

The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
do not represent market risk or credit exposure and are not
recorded on the balance sheet. <PAGE>
PAGE 64
Notes to Financial Statements (continued)

Credit exposure related to derivative financial instruments is
measured by the replacement cost of those contracts at the balance
sheet date. The replacement cost represents the fair value
of the instrument, and is determined by market values, dealer
quotes or pricing models.

IDSC's holdings of derivative financial instruments were as follows
at Dec. 31, 1996 and 1995.
<TABLE><CAPTION>
1996
Notional Total
or contract Carrying Fair credit
amount value value exposure
<S> <C> <C> <C> <C>
Assets:
Interest rate corridors $200,000 $- $188 $188
Purchased call options 242,243 36,164 34,987 34,987
Total $442,243 $36,164 $35,175 $35,175

Liabilities:
Written call options $225,386 $9,552 $17,571 $-

1995
Notional Total
or contract Carrying Fair credit
amount value value exposure

Assets:
Interest rate caps and corridors $970,000 $3,362 $2,128 $2,128
Purchased call options 152,406 27,138 24,161 24,161
Total $1,122,406 $30,500 $26,289 $26,289

Liabilities:
Written call options $141,782 $9,333 $10,394 $-
</TABLE>
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The interest rate
corridors expire in Jan. and Feb. of 1997. The options expire
throughout 1997.

Interest rate caps/corridors and options are used to manage IDSC's
exposure to rising interest rates. These instruments are used
primarily to protect the margin between the interest rate
earned on investments and the interest rate credited to related
investment certificate owners.

The interest rate caps/corridors are reset quarterly and IDSC earns
interest on the notional amount to the extent the London Interbank
Offering Rate exceeds the reference rates specified in the
cap/corridor agreements. These reference rates ranged from 4% to
9%. The cost of interest rate caps/corridors is amortized over the
terms of the agreements on a straight line basis and is included in
other qualified assets. The amortization, net of any interest
earned, is included in investment expenses.

IDSC offers a series of certificates which pay interest based upon
the relative change in a major stock market index between the
beginning and end of the certificates' term. The certificate
owners have the option of participating in the full amount of
increase in the index during the term (subject to a specified
maximum) or a lesser percentage of the increase plus a guaranteed
minimum rate of interest. As a means of hedging its obligations
under the provisions of these certificates, IDSC purchases and<PAGE>
PAGE 65
Notes to Financial Statements (continued)

writes call options on the major market index. The options are
cash settlement options, that is, there is no underlying security
to deliver at the time the contract is closed out.

The option contracts are less than one year in term. The premiums
paid or received on these index options are reported in other
qualified assets or other liabilities, as appropriate, and are
amortized into investment expense over the life of the option. The
intrinsic value of these index options is also reported in other
qualified assets or other liabilities, as appropriate. The
unrealized gains and losses related to the changes in the intrinsic
value of these options are recognized currently in provision for
certificate reserves.

Following is a summary of open option contracts at Dec. 31, 1996
and 1995.

1996
Face Average Index at
amount strike price Dec.31,1996

Purchased call options $242,243 669 741
Written call options 225,386 736 741

1995
Face Average Index at
amount strike price Dec.31,1995

Purchased call options $152,406 539 616
Written call options 141,782 601 616

10. Fair values of financial instruments

IDSC discloses fair value information for most on- and off-balance
sheet financial instruments for which it is practicable to estimate
that value. The fair value of the financial instruments presented
may not be indicative of their future fair values. The estimated
fair value of certain financial instruments such as cash and cash
equivalents, receivables for dividends and interest, investment
securities sold and other trade receivables, accounts payable due
to Parent and affiliates, payable for investment securities
purchased and other accounts payable and accrued expenses are
approximated to be the carrying amounts disclosed in the balance
sheets. Non-financial instruments, such as deferred distribution
fees, are excluded from required disclosure. IDSC's off-balance
sheet intangible assets, such as IDSC's name and future earnings of
the core business are also excluded. IDSC's management believes
the value of these excluded assets is significant. The fair value
of IDSC, therefore, cannot be estimated by aggregating the amounts
presented.

<PAGE>
PAGE 66
A summary of fair values of financial instruments as of Dec. 31, is
as follows:
<TABLE><CAPTION>

1996 1995

Carrying Fair Carrying Fair
value value value value
<S> <C> <C> <C> <C>

Financial assets
Assets for which carrying values
approximate fair values $155,396 $155,396 $148,746 $148,746
Investment securities (note 3) 3,076,889 3,103,005 3,411,396 3,456,922
First mortgage loans on real estate (note 4) 218,697 221,253 233,394 248,860
Derivative financial instruments (note 9) 36,164 35,175 30,500 26,289
Financial liabilities
Liabilities for which carrying values
approximate fair values 76,040 76,040 14,247 14,247
Certificate reserves (note 5) 3,240,428 3,223,213 3,578,412 3,614,490
Derivative financial instruments (note 9) 9,552 17,571 9,333 10,394

</TABLE>
<PAGE>
PAGE 67

IDS Cash Reserve Certificate
Prospectus
April 30, 1997

Earn attractive rates with ready access to your cash reserves

IDS Cash Reserve Certificates are issued by IDS Certificate Company
(IDSC). You can purchase this certificate with an initial
investment of at least $1,000 or monthly investments of at least
$50. Your principal and interest are guaranteed by IDSC. Your
certificate earns a fixed rate of interest, declared every three
months. Investments in the certificate may continue for successive
three-month terms up to a total of 20 years from the issue date of
the certificate. Unless you receive prior authorization from IDSC,
your total investment, excluding interest earned, cannot exceed $1
million. Your interest rate will be determined as described in
"About the certificate."

This prospectus describes terms and conditions of your IDS Cash
Reserve Certificate. It contains facts that can help you decide if
the certificate is the right investment for you. Read the
prospectus before you invest and keep it for future reference. No
one has the authority to change the terms and conditions of the IDS
Cash Reserve Certificate as described in the prospectus, or to bind
IDSC by any statement not in it.

IDS Certificate Company
IDS Tower 10
Minneapolis, MN 55440-0010
800-437-3133 (toll free) or (612) 671-3800
(Minneapolis/St. Paul area)

TTY numbers:
800-846-4293 (toll free) or (612) 671-1630
(Minneapolis/St. Paul area)

An American Express company

Web site address: http://www.americanexpress.com/advisors
<PAGE>
PAGE 68
Where to get information about IDSC

IDS Certificate Company is subject to the reporting requirements of
the Securities Exchange Act of 1934. Reports and other information
on IDSC are filed with the Securities and Exchange Commission (SEC)
and are available on the SEC Internet web site
(http://www.sec.gov). Copies can be obtained from the Public
Reference Section of the SEC, 450 5th St., N.W., Washington, D.C.
20549, at prescribed rates. Or you can inspect and copy
information in person at the SEC's Public Reference Section and at
the following regional offices:

Northeast Regional Office
7 World Trade Center, Suite 1300
New York, NY 10048

Midwest Regional Office
500 West Madison St. Suite 1400
Chicago, IL 60661

Pacific Regional Office
5670 Wilshire Blvd., 11th Floor
Los Angeles, CA 90036

Initial interest rates

IDSC guarantees a fixed interest rate for each three-month term
during the life of the certificate. For your initial term, IDSC
guarantees that when the rate for new purchases takes effect, the
rate will be within a specified range of the average rate for
three-month certificates of deposit as published in the most recent
BANK RATE MONITOR Top 25 Market AverageTM, North Palm Beach, FL
33408, as explained under "About the certificate."

Here are the interest rates in effect on the date of this
prospectus, April 30, 1997:

Investment Simple Effective
amount interest rate* annualized yield**
$50 to $999 2.96% 3.00%
$1,000 to $24,999 4.13 4.20
$25,000 or more 4.33 4.41

*Rates may depend on factors described in "Rates for new purchases"
under "About the certificate."

**Assuming monthly compounding.

These rates may or may not be in effect when you apply to purchase
your certificate. Rates for later three-month terms are set at the
discretion of IDSC and may also differ from the rates shown here.

We reserve the right to issue other securities with different
terms.
<PAGE>
PAGE 69
Contents

Table of contents

About the certificate p
Investment amounts and terms p
Face amount and principal p
Value at maturity p
Receiving cash during the term p
Interest p
Rates for new purchases p

How to invest and withdraw funds p
Buying your certificate p
Additional investments p
Three ways to make investments p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Two ways to request a withdrawal or transfer p
Three ways to receive payment when you withdraw funds p
Retirement plans: special policies p
Transfer of ownership p
For more information p

Taxes on your earnings
Retirement accounts p
Gifts to minors p
How to determine the correct TIN p
Foreign investors p
Trusts p

How your money is used and protected
Invested and guaranteed by IDSC p
Regulated by government p
Backed by our investments p
Investment policies p
Certain investment considerations p

Appendix p

Annual financial information
Summary of selected financial information p
Management's discussion and analysis of financial
condition and results of operations p
Report of independent auditors p
<PAGE>
PAGE 70
Financial statements p

Notes to financial statements p
<PAGE>
PAGE 71
About the certificate

Investment amounts and terms

You may purchase the IDS Cash Reserve Certificate with an initial
investment of at least $1,000 or monthly investments of at least
$50 through scheduled bank authorization or payroll deduction.
Your total investments over the life of the certificate may not
exceed $1 million unless you receive prior authorization from IDSC.

The certificate may be used as an investment for your Individual
Retirement Account (IRA), 401(k) plan account or other qualified
retirement plan account. A minimum investment of $50 per month is
required for these types of accounts. If so used, the amount of
your contribution (investment) will be subject to any limitations
of the plan and applicable federal law.

Face amount and principal

The face amount of the certificate is the amount of your initial
investment, and will remain the same over the life of the
certificate.

The principal is the amount that is reinvested at the beginning of
each subsequent term, and is calculated as follows:

Principal equals Face Amount (initial investment)
plus At the end of a term, interest credited to
your account during the term
minus Any interest paid to you in cash
plus Any additional investments to your
certificate
minus Any withdrawals, fees and applicable
penalties.

For example: Assume your initial investment (face amount) of
$5,000 has earned $75 of interest during the term. You have not
taken any interest as cash, or made any withdrawals. You have
invested an additional $2,500 at the beginning of the next term.
Your principal for the next term will equal:

$5,000.00 Face Amount (initial investment)
plus $75.00 Interest credited to your account
minus ($0.00) Interest paid to you in cash
plus $2,500.00 Additional investment to your certificate
minus ($0.00) Withdrawals and applicable penalties
or fees

$7,575.00 Principal at the beginning of the next
term.

Value at maturity

Your certificate matures 20 years from its issue date. At
maturity, the value of your certificate will be the total of your
actual investment, plus credited interest not paid to you in cash,
less withdrawals, penalties and fees. When your certificate
matures, you will receive a distribution for your principal, plus <PAGE>
PAGE 72
any credited interest, less any withdrawals, penalties and fees.
Bank authorizations will automatically be stopped at maturity or
full withdrawal.

Receiving cash during the term

Interest

IDSC declares and guarantees a fixed rate of interest for each
three month term during the life of your certificate. We calculate
the amount of interest you earn each certificate month by:

o applying the interest rate then in effect to your balance
each day;

o adding these daily amounts to get a monthly total; and

o subtracting interest accrued on any amount you withdraw
during the certificate month.

Interest is calculated on a 30-day month and 360-day year basis.

Rates for new purchases

When your application is accepted, and we have received your
initial investment, we will send you a confirmation showing the
rate that your investment will earn for the first term. For
accounts of $1,000 to $24,999.99 IDSC guarantees that this rate
will be within a range from 20 basis points (0.20%) below to 80
basis points (0.80%) above the average interest rate published for
three-month CDs in the BANK RATE MONITOR Top 25 Market AverageTM
(the BRM Average). For example, if the average rate most recently
published is 4.00%, our rate in effect for that week for amounts of
$1,000 to $24,999.99 would be between 3.80% to 4.80%. For accounts
of $25,000 or more, this rate will be within a range from 0 basis
points (0.0%) below to 100 basis points (1.00%) above the same
index rate. For accounts of less than $1,000, this rate will be
within a range of 125 basis points (1.25%) below to 25 basis points
(0.25%) below this average interest rate.

The BANK RATE MONITOR is a weekly magazine published in North Palm
Beach, FL 33408, by Advertising News Service Inc., an independent
national news organization that collects and disseminates
information about bank products and interest rates. Advertising
News Service Inc. has no connection with IDSC, American Express
Financial Corporation (AEFC), or any of their affiliates.
<PAGE>
PAGE 73
The BRM Average is an index of rates and annual effective yields
offered on various length certificates of deposit by large banks
and thrifts in 25 metropolitan areas. The frequency of compounding
varies among the banks and thrifts. Certificates of deposit in the
BRM Average are government insured fixed-rate time deposits.

The BANK RATE MONITOR may be available in your local library. To
obtain information on the current BRM Average rates, call the
Client Service Organization at the telephone numbers listed on the
back cover between 8 a.m. and 6 p.m. your local time.

Rates for new purchases are reviewed and may change weekly.
Normally, the rate you receive will be the higher of:

o the rate in effect on the date of your application; or
o the rate in effect on the date your application is
accepted by IDSC.

However if your application bears a date more than seven days
before its receipt by IDSC, the rate you receive will be the higher
of:

o the rate in effect on the date your application is
accepted by IDSC; or
o the rate in effect seven days prior to receipt.

Except for specific promotions, IDSC guarantees an initial rate 25
basis points above the rate offered to the general public on this
IDS certificate if it is purchased by using the CD transfer service
offered by American Express Financial Advisors Inc. to help you
transfer money from a bank or thrift CD account to American Express
Financial Advisors Inc. investments. To be eligible for this rate,
you must transfer at least $10,000 from a CD account to IDSC to
purchase one or more IDS Cash Reserve Certificates and/or IDS
Flexible Savings Certificates, and this rate will only apply to
those certificates.

Promotions and pricing flexibility: From time to time, IDSC may
sponsor or participate in promotions involving one or more of the
certificates and their respective terms. For example, we may offer
different rates to new clients, to existing clients, or to
individuals who purchase or use other products or services offered
by American Express Company or its affiliates. Rates also may vary
depending on the amount you invest, your geographic location and
whether the certificate is purchased for an IRA or qualified
retirement plan account.

These promotions will generally be for a specified period of time.
If we offer a promotion, the rates for new purchases will be within
the range of rates described under "Rates for new purchases,"
above.

Rates for future terms: Interest on your certificate for future
three-month terms may be greater or less than the rates you receive
during the first three months. In setting future rates, a primary
consideration will be the prevailing investment climate, including
three-month CD rates as reflected in the BRM Average. <PAGE>
PAGE 74
Nevertheless, we have complete discretion as to what interest shall
be declared beyond the initial three-month term. If the BRM
Average is no longer publicly available or feasible to use, IDSC
may use another similar index as a guide for setting rates.

Performance: From February 1992 through February 1997, IDS Cash
Reserve yields were generally higher than average bank and thrift
three-month CD yields, as measured by the BRM Average (prior to
January 13, 1993, yields were measured by the BRM National Index,
an average of CD yields in 10 cities).

Yields from February 1992 through February 1997
8% _____ IDS Cash Reserve Certificate
..... Money Market Deposit Account
6% ***** Certificate of Deposit - Three Month

4% Three lines comparing the yields for IDS Cash Reserve
Certificate versus money market deposit accounts and
2% three-month certificates of deposit, with IDS Cash
Reserve's line generally above the other two.

91 92 93 94 95 96

This graph compares past yields offered on IDS Cash Reserve
Certificate to those of three-month CDs and money market deposit
accounts and should not be considered a prediction of future
performance.

How to invest and withdraw funds

Buying your certificate

Additional investments

You may make additional investments at any time. Additional
investments must be at least $50 and your total investment, less
withdrawals, may not exceed $1 million (unless you receive prior
authorization from IDSC to invest more). You will earn interest on
additional investments from the date we accept them. IDSC will
send a confirmation of additional investments.

Important: When opening an account, you must provide IDSC with
your correct Taxpayer Identification Number (Social Security or
Employer Identification Number). See "Taxes on your earnings."
<PAGE>
PAGE 75
Purchase policies:

o If you purchase a certificate with a personal check or other
non-guaranteed funds, AEFC will wait one day for the process
of converting your check to federal funds (e.g., monies of
member banks with the Federal Reserve Bank) before your
purchase will be accepted and you begin earning interest.

o IDSC has complete discretion to determine whether to accept an
application and sell a certificate.

o You must maintain a balance of at least $1,000 in your Cash
Reserve Certificate account unless you are using an authorized
systematic pay-in or payout arrangement. If you use a
scheduled pay-in arrangement, your minimum balance requirement
is $50.

o If you make no investments for a period of at least six
consecutive months and your principal is less than $1,000, we
will send you a notice of our intent to cancel the
certificate. After the notice, if an investment is not made
within 60 days your certificate will be canceled, and we will
send you a check for its full value.

A number of special policies apply to purchases, withdrawals and
exchanges within IRAs, 401(k) plans and other qualified retirement
plans. See "Retirement plans: special policies."

Three ways to make investments
1
By scheduled investment plan

Contact your financial advisor to set up one of the following
scheduled plans for monthly investments:

o bank authorization (automatic deduction from your bank
account)
o automatic payroll deduction
o direct deposit of social security check
o other plan approved by IDSC
o monthly minimum investment must be $50
<PAGE>
PAGE 76
To cancel a bank authorization, you must instruct IDSC in writing
or over the phone. We must receive notice at least three business
days before the date funds would normally be withdrawn from your
bank account.

2
By mail

For monthly or lump sum investments, send your check along with
your name and account number to:

Regular mail: Express mail:
American Express Financial American Express Financial
Advisors Inc. Advisors Inc.
Client Service Organization Client Service Organization
IDS Tower 10 733 Marquette Ave.
Minneapolis, MN 55440-0010 Minneapolis, MN 55402

3
By wire

If you have an established account, you may wire money to:

Norwest Bank Minneapolis
Routing No. 091000019
Minneapolis, MN
Attn: Domestic Wire Dept.

Give these instructions: Credit IDS Account #00-30-015 for
personal account # (your account number) for (your name).

If this information is not included, the order may be rejected and
all money received, less any costs AEFC incurs, will be returned
promptly.

o Minimum amounts each wire investment: $1,000.

o Wire orders can be accepted only on days when your bank, AEFC,
IDSC and Norwest Bank Minneapolis are open for business.

o Wire purchases are completed when wired payment is received
and we accept the purchase.

o Bank wire purchases are not sent until the next business day.

o IDSC, AEFC and its other subsidiaries 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.
<PAGE>
PAGE 77
Full and partial withdrawals

You may withdraw your certificate for its full value or make a
partial withdrawal of $100 or more at any time. If you purchase
this certificate for an IRA, 401(k), or other retirement plan
account, early withdrawals or cash payments of interest taken
prematurely may be subject to IRS penalty taxes.

o Complete withdrawal of your certificate is made by giving us
proper instructions.

To complete these transactions, see "Two ways to request a
withdrawal or transfer."

o Interest payments in cash may be sent to you at the end of
each certificate month, quarter, or on a semiannual or annual
basis.

o Scheduled partial withdrawals may be sent to you monthly,
quarterly, semiannually or annually. The minimum withdrawal
amount is $50.

o Withdrawals before the end of the certificate month will
result in loss of interest on the amount withdrawn. You'll
get the best result by timing a withdrawal at the end of the
certificate month.

o Withdrawals that reduce your certificate's principal below a
break point for a lower interest rate will cause the remaining
principal to earn the lower interest rate for the rest of the
term from the date of the withdrawal.

o You may not make a withdrawal from your certificate if that
withdrawal causes your balance to fall below $1,000 unless you
are making bank authorization or payroll deduction payments or
taking systematic payments from your certificate. In these
instances, the remaining balance will earn the lower interest
rate in effect for balances of less than $1,000.

When your certificate term ends

Shortly before the end of your certificate's term we will send you
a notice indicating the interest rate that will apply to the new
term. Unless you tell us otherwise, your certificate will
automatically continue for another term. The interest rate that
will apply to your new term will be the rate in effect on the day
the new term begins. This rate of interest will not be changed
during that term unless your certificate's principal falls below a
break point for a lower interest rate.
<PAGE>
PAGE 78
Other full and partial withdrawal policies:

o If your certificate is pledged as collateral, any withdrawal
will be delayed until we get approval from the secured party.

o Any payments to you may be delayed under applicable rules,
regulations or orders of the SEC.

Transfers to other accounts

Two ways to request a withdrawal or transfer

1
By phone

o Call the Client Service Organization at the telephone numbers
listed on the back cover between 8 a.m. and 6 p.m. your local
time.

o Maximum phone request: $50,000.

o Transfers into an American Express Financial Advisors Inc.
account with the same ownership.

o A telephone withdrawal request will not be allowed within 30
days of a phoned-in address change.

You may request that telephone withdrawals not be authorized from
your account by writing the Client Service Organization.
<PAGE>
PAGE 79
2
By mail

Send your name, account number and request for a withdrawal or
transfer to:

Regular mail:
American Express Financial Advisors Inc.
Client Service Organization
IDS Tower 10
Minneapolis, MN 55440-0010

Express mail:
American Express Financial Advisors Inc.
Client Service Organization
733 Marquette Ave.
Minneapolis, MN 55440-0010

Written requests are required for:

o Transactions over $50,000.

o Pension plans and custodial accounts where the minor has
reached the age at which custodianship should terminate.

o Transfers to another American Express Financial Advisors Inc.
account with different ownership (all current registered
owners must sign the request).

Three ways to receive payment when you withdraw funds

1
By regular or express mail

o Mailed to address on record; please allow seven days for
mailing.

o Payable to name(s) you requested.

2
By wire

o Minimum wire withdrawal: $1,000.

o Request that money be wired to your bank.

o Bank account must be in same ownership as IDSC account.
<PAGE>
PAGE 80
o Pre-authorization required. Complete the bank wire
authorization section in the application or use a form
supplied by your American Express financial advisor. All
registered owners must sign.

o A service fee, if any, may be deducted from your balance (for
partial withdrawals) or from the proceeds of a full
withdrawal.

3
By electronic transfer

o Available only for pre-authorized scheduled partial
withdrawals and other full or partial withdrawals.

o No charge.

o Deposited electronically in your bank account.

o Allow two to five business days from request to deposit.

Retirement plans: special policies

o If your certificate is held in a Custodial Retirement Plan (or
Keogh plan), special rules may apply at maturity. If no other
investment instructions are provided directing how to handle
your certificate at maturity, the full value of the
certificate will automatically transfer to a new or existing
cash management account according to the rules outlined in the
Custodial Retirement Plan document.

o Retirement plan withdrawals may be subject to withdrawal
penalties or loss of interest even if they are not subject to
federal tax penalties.

o If you withdraw all funds from your last account in an IRA at
American Express Trust Company, a $50 termination fee will
apply.

o The IRA termination fee will be waived if a withdrawal occurs
after you have reached age 59 1/2 or upon the owner's death.
<PAGE>
PAGE 81
Transfer of ownership

For more information

Taxes on your earnings

Retirement accounts

Consult your tax advisor to see how these rules apply to you before
you request a distribution from your plan or IRA.

Gifts to minors

The certificate may be given to a minor under either the Uniform
Gifts or Uniform Transfers to Minors Act (UGMA/UTMA), whichever
applies in your state. UGMAs/UTMAs are irrevocable. Generally,
under federal tax laws, income over $1,200 on property owned by <PAGE>
PAGE 82
children under age 14 will be taxed at the parents' marginal tax
rate, while income on property owned by children 14 or older will
be taxed at the child's rate.

If you don't provide the TIN to IDSC, or the TIN you report is
incorrect, you could be subject to backup withholding of 31% of
your interest earnings. You could also be subject to further
penalties, such as:

You could also be subject to backup withholding because you failed
to report interest on your tax return as required.

To help you determine the correct TIN to use on various types of
accounts, please use this chart:

How to determine the correct TIN

Use the Social Security or
For this type of account: Employer Identification Number of:

Individual or joint account The individual or individuals
listed on the account

Custodian account of a minor The minor
(Uniform Gifts/Transfers to
Minors Act)

A living trust The grantor-trustee (the person
who puts the money into the trust)

An irrevocable trust, pension The legal entity (not the personal
trust or estate representative or trustee, unless
no legal entity is designated in
the account title)

Sole proprietorship The owner

Partnership The partnership

Corporate The corporation

Association, club or The organization
tax-exempt organization
<PAGE>
PAGE 83

Foreign investors

If you are not a citizen or resident of the United States, you must
supply IDSC with Form W-8, Certificate of Foreign Status when you
purchase your certificate, and you must resupply it every three
years. You must also supply both a current mailing address and an
address of foreign residency, if different. IDSC will not accept
purchases of certificates by nonresident aliens without an
appropriately certified Form W-8 (or approved substitute). Also,
if you do not supply Form W-8 you will be subject to backup
withholding on interest payments and withdrawals.

Trusts

If the investor is a trust, the policies and procedures described
above will apply with regard to each grantor who is a nonresident
alien.
<PAGE>
PAGE 84
How your money is used and protected

Invested and guaranteed by IDSC

The IDS Cash Reserve Certificate is issued and guaranteed by IDSC,
a wholly owned subsidiary of AEFC. We are by far the largest
issuer of face amount certificates in the United States, with total
assets of more than $3.5 billion and a net worth in excess of $194
million on Dec. 31, 1996.

We back our certificates by investing the money received and
keeping the invested assets on deposit. Our investments generate
interest and dividends, out of which we pay:

o interest to certificate owners; and

o various expenses, including taxes, fees to AEFC for
advisory and other services and distribution fees to
American Express Financial Advisors Inc.

Regulated by government

Because the IDS Cash Reserve Certificate is a security, its offer
and sale are subject to regulation under federal and state
securities laws. (It is a face-amount certificate -- not a bank
product, an equity investment, a form of life insurance or an
investment trust.)

Backed by our investments

Our investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1996:
<PAGE>
PAGE 85
Type of investment Net amount invested

Corporate and other bonds 38%
Government agency bonds 31
Preferred stocks 20
Mortgages 6
Cash and cash equivalents 3
Municipal bonds 2

As of Dec. 31, 1996, about 93% of our securities portfolio
(including bonds and preferred stocks) is rated investment grade.
For additional information regarding securities ratings, please
refer to Note 3B in the financial statements.

Investment policies

Debt securities-
Most of our investments are in debt securities as referenced in the
table in "Backed by our investments" under "How your money is used
and protected."

Purchasing securities on margin -
We will not purchase any securities on margin or participate on a
joint basis or a joint-and-several basis in any trading account in
securities.

Borrowing money -
From time to time we have established a line of credit if
management believed borrowing was necessary or desirable. We may
pledge some of our assets as security. We may occasionally use
repurchase agreements as a way to borrow money. Under these <PAGE>
PAGE 86
agreements, we sell debt securities to our lender, and repurchase
them at the sales price plus an agreed-upon interest rate within a
specified period of time.

Illiquid securities -
A security is illiquid if it cannot be sold in the normal course of
business within seven days at approximately its current market
value. Some investments cannot be resold to the U.S. public
because of their terms or government regulations. All securities,
however, can be sold in private sales, and many may be sold to
other institutions and qualified buyers or on foreign markets.
IDSC's investment advisor will follow guidelines established by the
board and consider relevant factors such as the nature of the
security and the number of likely buyers when determining whether a
security is illiquid. No more than 15% of IDSC's investment
portfolio will be held in securities that are illiquid. In valuing
its investment portfolio to determine this 15% limit, IDSC will use
statutory accounting under an SEC order. This means that, for this
purpose, the portfolio will be valued in accordance with applicable
Minnesota law governing investments of life insurance companies,
rather than generally accepted accounting principles.
<PAGE>
PAGE 87
Restrictions -
There are no restrictions on concentration of investments in any
particular industry or group of industries or on rates of portfolio
turnover.

Certain investment considerations

As of Dec. 31, 1996, IDSC held about 7% of its investment portfolio
(including bonds, preferred stocks, mortgages and cash equivalents)
in investments rated below investment grade.

When-issued securities are subject to market fluctuations and they
may affect IDSC's investment portfolio the same as owned
securities.

How your money is managed

Relationship between IDSC and American Express Financial
Corporation

o travel related services (including American Express(R) Card
and Travelers Cheque operations through American Express
Travel Related Services Company, Inc. and its subsidiaries);
and

o international banking services (through American Express Bank
Ltd. and its subsidiaries including American Express Bank
International).

Capital structure and certificates issued

IDSC has authorized, issued and has outstanding 150,000 shares of
common stock, par value of $10 per share. AEFC owns all of the
outstanding shares.

As of Dec. 31, 1996, IDSC had issued (in face amount)
$13,327,949,715 of installment certificates and $15,788,445,077 of
single payment certificates.

Investment management and services

Under an Investment Advisory and Services Agreement, AEFC acts as
our investment advisor and is responsible for:

o providing investment research;
o making specific investment recommendations; and
o executing purchase and sale orders according to our policy of
obtaining the best price and execution.
<PAGE>
PAGE 89
All these activities are subject to direction and control by our
board of directors and officers. Our agreement with AEFC requires
annual renewal by our board, including a majority of directors who
are not interested persons of AEFC or IDSC as defined in the
federal Investment Company Act of 1940.

For its services, we pay AEFC a monthly fee, equal on an annual
basis to a percentage of the total book value of certain assets
(included assets).

Advisory and services fee computation:

Included assets Percentage of total book value

First $250 million 0.75%
Next 250 million 0.65
Next 250 million 0.55
Next 250 million 0.50
Any amount over 1 billion 0.45

Included assets are all assets of IDSC except mortgage loans, real
estate, and any other asset on which we pay an advisory or service
fee.

Advisory and services fee for the past three years:

Percentage of
Year Total fees included assets
1996 $16,989,093 0.50%
1995 $16,472,458 0.50
1994 $13,565,432 0.51

Estimated advisory and services fees for 1997 are $16,621,000.

Other expenses payable by IDSC: The Investment Advisory and
Services Agreement provides that we will pay:

Under a Distribution Agreement with American Express Financial
Advisors Inc., we pay for the distribution of this certificate,
effective April 30, 1997, as follows:

o 0.20% of the initial payment on the issue date of the
certificate; and
o 0.20% of the certificate's reserve at the beginning of the
second and subsequent quarters from issue date.

This fee is not assessed to your certificate account.

See Note 1 to Financial statements regarding deferral of
distribution fee expense.

Employment of other American Express affiliates

AEFC may employ an affiliate of American Express Company as
executing broker for our portfolio transactions only if:

Directors and officers

IDSC's directors, chairman, president and controller are elected
annually for a term of one year. The other executive officers are
appointed by the president.

We paid a total of $37,000 during 1996 to directors not employed by
AEFC.
<PAGE>
PAGE 91
Board of directors

David R. Hubers*
Born in 1943. Director since 1987.
President and chief executive officer of AEFC since 1993. Senior
vice president and chief financial officer of AEFC from 1984 to
1993.

Charles W. Johnson
Born in 1929. Director since 1989.
Director, Communications Holdings, Inc. Former vice president and
group executive, Industrial Systems, with Honeywell, Inc. Retired
1989.

John V. Luck, Ph.D.
Born in 1926. Director since 1987.
Former senior vice president - Science and Technology with General
Mills, Inc. Employed with General Mills, Inc. since 1968. Retired
1988.

Harrison Randolph
Born in 1916. Director since 1968.
Engineering, manufacturing and management consultant since 1978.

Gordon H. Ritz
Born in 1926. Director since 1968.
Director, Mid-America Publishing and Atrix International, Inc.
Former president, Com Rad Broadcasting Corp. Former director,
Sunstar Foods.
<PAGE>
PAGE 92

*"Interested Person" of IDSC as that term is defined in Investment
Company Act of 1940.

Executive officers

Stuart A. Sedlacek
Born in 1957. President since 1994.

Timothy S. Meehan
Born in 1957. Secretary since 1995.
Secretary of AEFC and American Express Financial Advisors Inc.
since 1995. Senior counsel to AEFC since 1995. Counsel from 1990
to 1995.

Jay C. Hatlestad
Born in 1957. Vice president and controller of IDSC since 1994.
Manager of Investment Accounting of IDS Life Insurance Company from
1986 to 1994.

Bruce A. Kohn
Born in 1951. Vice president and general counsel since 1993.
Senior counsel to AEFC since 1996. Counsel to AEFC from 1992 to
1996. Associate counsel from 1987 to 1992.

The officers and directors as a group beneficially own less than 1%
of the common stock of American Express Company.

IDSC has provisions in its bylaws relating to the indemnification
of its officers and directors against liability, as permitted by
law. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of
the SEC such indemnification is against public policy as expressed
in the Act and is therefore unenforceable. <PAGE>
PAGE 93
Auditors

Other certificates issued by IDSC: Your American Express financial
advisor can give you more information on five other certificates
issued by IDSC. These certificates offer a wide range of
investment terms and features.

IDS Flexible Savings Certificate - A single payment certificate
that permits additional investments and on which IDSC guarantees
interest in advance for a term of six, 12, 18, 24, 30 or 36 months.

IDS Preferred Investors Certificate - A single payment certificate
that combines a competitive fixed rate of return with IDSC's
guarantee of principal for large investments of $250,000 to $5
million.

Appendix