IDS CERTIFICATE CO /MN/, POS AM, 1998-04-23

IDS CERTIFICATE CO /MN/
POS AM, 1998-04-23

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

FORM S-1
AMERICAN EXPRESS INVESTORS CERTIFICATE

POST-EFFECTIVE AMENDMENT NO. 16 TO
REGISTRATION STATEMENT NO. 33-26844
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, (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)
<PAGE>

American Express Investors Certificate
Prospectus
April 29, 1998

Provides high fixed rates with capital preservation.

This prospectus describes American Express Investors Certificate distributed by
American Express Financial Advisors Inc. American Express Bank International
(AEBI) has an arrangement with American Express Financial Advisors Inc. under
which the certificate is offered to AEBI's clients who are neither citizens nor
residents of the United States, and to certain U.S. trusts. The certificate is
currently available through AEBI offices located in Florida and New York. The
certificate is also available to certain clients of Coutts & Co. (USA)
International (Coutts) through its office in California.

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.

IDS CERTIFICATE COMPANY IS NOT A BANK OR FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR 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.
<PAGE>
Issuer:
IDS Certificate Company
Unit 557
IDS Tower 10
Minneapolis, MN 55440-0010

Distributor:
American Express Financial Advisors Inc.
IDS Tower 10
Minneapolis, MN 55440-0010

Selling Agents:
American Express Bank International
American Express Tower
World Financial Center
New York, NY 10285-2300

Coutts & Co (USA) International
701 Brickell Avenue
23rd Floor
Miami, FL 33131

Where to get information about the Issuer

The Issuer is subject to the reporting requirements of the Securities Exchange
Act of 1934. Reports and other information on the Issuer 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
<PAGE>
Pacific Regional Office
5670 Wilshire Blvd.
11th Floor
Los Angeles, CA 90036

Initial interest rates

The Issuer guarantees a fixed rate of interest for each term. For the initial
term, the rate will be within a specified range of certain average interest
rates generally referred to as the London Interbank Offered Rates (LIBOR) as
explained under "About the certificate."
<TABLE>
<CAPTION>

Here are the interest rates in effect on the date of this prospectus, April 29,
1998*:

Actual
Simple Compound Effective
Interest Yield for Annualized
Term Rate* the Term** Yield***
- --------------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
1 month 4.156% 4.156% 4.236%
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

2 month 4.149 4.156 4.229
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

3 month 4.173 4.188 4.254
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

6 month 4.186 4.223 4.267
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

12 month 4.260 4.344 4.344
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

24 month 4.413 4.503 4.503
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

36 month 4.413 4.503 4.503
- --------------------------- -------------------------- -------------------------- --------------------------

* These are the rates for investments of $100,000. Rates may depend on factors described in "Rates
for new purchases" under "About the certificate."
** Assuming monthly compounding for the number of months in the term and a $100,000 purchase.
*** Assuming monthly compounding for 12 months and a $100,000 purchase.
</TABLE>
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 the Issuer and
may also differ from the rates shown here. See "Rates for new purchases" under
"About the certificate" for further information.

The Issuer reserves the right to issue other securities with different terms.
<PAGE>
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
Promotions and pricing flexibility p
Rates for new purchases p
Rates for future terms p
Additional investments p
Earning interest p

How to invest and withdraw funds p
Buying your certificate p
How to make investments at term end p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Transfer of ownership p
For more information p
Giving instructions and written notification p
Purchases by bank wire p

Tax treatment of your investment p
Withholding taxes p

Trusts p

How your money is used and protected p
Invested and guaranteed by the Issuer p
Regulated by government p
Backed by our investments p
Investment policies p

<PAGE>

How your money is managed p
Relationship between the Issuer and American
Express Financial Corporation p
Capital structure and certificates issued p
Investment management and services p
Distribution p
About American Express Bank International and Coutts p
Transfer Agent p
Employment of other American Express affiliates p
Directors and officers p
Independent auditors p

Appendix p

Annual financial information p
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>
About the certificate

Investment amounts and terms

After determining the amount you wish to invest, you select a term of one, two,
three, six, 12, 24 or 36 months for which the Issuer will guarantee a specific
interest rate. The Issuer guarantees the principal of your certificate. At the
end of the term, you may have interest earned on the certificate during its term
credited to your certificate or paid to you. Investments in the certificate may
continue for successive terms up to a total of 20 years from the issue date of
the certificate. 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.

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 "Full and partial
withdrawals."

For example: Assume your initial investment (face amount) of $500,000 earned
$7,500 of interest during the term. You have not taken any interest as cash or
made any withdrawals. You have invested an additional $250,000 prior to the
beginning of the next term. Your principal for the next term will equal:
<PAGE>
$500,000 Face amount (initial investment)
plus 7,500 Interest credited to your account
minus (0) Interest paid to you in cash
plus 250,000 Additional investment to your certificate
minus (0) Withdrawals and applicable penalties or fees
$757,500 Principal at the beginning of the next term.

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). Interest may be paid to you monthly in
cash if you maintain a principal balance of at least $500,000.

The Issuer 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:

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

adding these daily amounts to get a monthly total; and

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.
<PAGE>
Promotions and pricing flexibility

From time to time, the Issuer 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 products or services offered by American Express Company, Coutts
& Co. (USA) International or their affiliates. These promotions will generally
be for a specified period of time. We also may offer different rates based on
your amount invested.

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. The Issuer guarantees that the rate in effect for your
initial term will be within a 100 basis point (1%) range tied to certain average
interest rates for comparable length dollar deposits available on an interbank
basis in the London market, and generally referred to as the London Interbank
Offered Rates (LIBOR). For investments of $1 million or more, initial rates for
specific terms are determined as follows:

1 month Within a range of 80 basis points below to 20 basis points above the
one-month LIBOR rate.

2 months Within a range of 80 basis points below to 20 basis
points above the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)

3 months Within a range of 80 basis points below to 20 basis points above the
three-month LIBOR rate.

6 months Within a range of 80 basis points below to 20 basis points above the
six-month LIBOR rate.

12 months Within a range of 80 basis points below to 20 basis points above the
12-month LIBOR rate.

24 months Within a range of 50 basis points below to 50 basis points above the
12-month LIBOR rate. (A 24-month LIBOR rate is not published.)

36 months Within a range of 50 basis points below to 50 basis points above the
12-month LIBOR rate. (A 36-month LIBOR rate is not published.)

For investments from $250,000 to $999,999 initial rates for specific terms are
determined as follows:

1 month Within a range of 100 basis points below to zero basis points above
the one-month LIBOR rate.
<PAGE>
2 months Within a range of 100 basis points below to zero basis points above
the one-month LIBOR rate. (A two-month LIBOR rate is not published.)

3 months Within a range of 100 basis points below to zero basis points above
the three-month LIBOR rate.

6 months Within a range of 100 basis points below to zero basis points above
the six-month LIBOR rate.

12 months Within a range of 100 basis points below to zero basis points above
the 12-month LIBOR rate.

24 months Within a range of 85 basis points below to 15 points above the
12-month LIBOR rate. (A 24-month LIBOR rate is not published.)

36 months Within a range of 85 basis points below to 15 points above the
12-month LIBOR rate. (A 36-month LIBOR rate is not published.)

For investments of $100,000 to $249,999, initial rates for specific terms are
determined as follows:

1 month Within a range of 180 basis points below to 80 basis points below the
one-month LIBOR rate.

2 months Within a range of 180 basis points below to 80 basis points below
the one-month LIBOR rate. (A two-month LIBOR rate is not published.)

3 months Within a range of 180 basis points below to 80 basis points below the
three-month LIBOR rate.

6 months Within a range of 180 basis points below to 80 basis points below the
six-month LIBOR rate.

12 months Within a range of 180 basis points below to 80 basis points below the
12-month LIBOR rate.

24 months Within a range of 175 basis points below to 75 basis points below the
12-month LIBOR rate. (A 24-month LIBOR rate is not published.)

36 months Within a range of 175 basis points below to 75 basis points below the
12-month LIBOR rate. (A 36-month LIBOR rate is not published.)

<PAGE>
For example, if the LIBOR rate published on the date rates are determined with
respect to a six-month deposit is 6.50%, the rate declared on a six-month
American Express Investors Certificate greater than $250,000 but less than $1
million would be between 5.50% and 6.50%. If the LIBOR rate published for a
given week with respect to 12-month certificates is 7.00%, the Issuer's rates in
effect that week for the 24- and 36-month American Express Investors
Certificates greater than $250,000 would be between 6.15% and 7.15%. When your
application is accepted, you will be sent a confirmation showing the rate that
your investment will earn for the first term.

LIBOR is the interbank-offered rates for dollar deposits at which major
commercial banks will lend for specific terms in the London market. Generally,
LIBOR rates quoted by major London banks will be the same. However, market
conditions, including movements in the U.S. prime rate and the internal funding
position of each bank, may result in minor differences in the rates offered by
different banks. LIBOR is a generally accepted and widely quoted interest-rate
benchmark. The average LIBOR rate used by the Issuer is published in The Wall
Street Journal.

Rates for new purchases are reviewed and may change daily. The guaranteed rate
that is in effect for your chosen term on the day your application is accepted
at the Issuer's corporate office in Minneapolis, Minnesota, U.S.A. will apply to
your certificate. The interest rates printed in the front of this prospectus may
or may not be in effect on the date your application to invest is accepted.
Rates for new purchases may vary depending on the amount you invest, but will
always be within the 100 basis point range described above. You may obtain the
current interest rates by calling your AEBI or Coutts representative.

In determining rates based on the amount of your investment, the Issuer may
offer a rate based on your aggregate investment determined by totaling only the
amounts invested in each certificate that has a current balance exceeding a
specified level. The current balance considered in this calculation may be
exclusive of interest. Part of the balance may be required to be invested in
terms of a specified minimum length. The aggregate investment may be required to
be for terms that average at least a specified minimum length. The certificates
whose balances are aggregated must have identical ownership. The rate may be
available only for a certificate whose current balance exceeds a specified level
or that is offered through a specified distributor or selling agent.

Interest rates for the term you have selected will not change once the term has
begun, unless a withdrawal reduces your account value to a point where we pay a
lower interest rate, as described in "Full and partial withdrawals" under "How
to invest and withdraw funds."
<PAGE>
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 for
subsequent terms, a primary consideration will be the prevailing investment
climate, including the LIBOR rates. Nevertheless, the Issuer has complete
discretion as to what interest rates it will declare beyond the initial term.
The Issuer will send you notice at the end of each term of the rate your
certificate will earn for the new term. You have a 15-day grace period to
withdraw your certificate without a withdrawal charge. If LIBOR is no longer
publicly available or feasible to use, the Issuer may use another, similar index
as a guide for setting rates.

Additional investments

You may add to your investment when your term ends. If your new term is a
one-month term, you may add to your investment on the first day of your new term
(the renewal date) or the following business day if the renewal date is a
non-business day. If your new term is greater than one month, you may add to
your investment within the 15 days following the end of your term. A $25,000
minimum additional investment is required, payable in U.S. currency. Your
confirmation will show the applicable rate. However, unless you receive prior
approval from the Issuer, your investment may not bring the aggregate net
investment of any one or more certificates held by you (excluding any interest
added during the life of the certificate and less withdrawals) over $5 million.
Additional investments of at least $25,000 may be made by bank wire.

The Issuer must receive your additional investment within the 15 days following
the end of a certificate's current term (unless your new investment is a
one-month term), if you wish to increase your principal investment as of the
first day of the new term. Interest accrues from the first day of the new term
or the day your additional investment is accepted by the Issuer, whichever is
later, at the rate then in effect for your account. If your new term is a
one-month term, your additional investment must be received by the end of the
certificate's current term.

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 Issuer accepts the additional
investment.

Earning interest

At the end of each certificate month, interest is compounded and credited to
your account. A certificate month is the monthly anniversary of the issue date.
Interest may be paid to you monthly in cash if you maintain a principal balance
of at least $500,000.
<PAGE>
The amount of interest you earn each certificate month is determined by applying
the interest rate then in effect to the daily balance of your certificate, and
subtracting from that total the interest accrued on any amount withdrawn during
the month. Interest is calculated on a 360-day year basis. This means interest
is calculated on the basis of a 30-day month even though terms are determined on
a calendar month.

How to invest and withdraw funds

Buying your certificate

This certificate is available only to AEBI clients who are neither citizens nor
residents of the United States (or which are foreign corporations, partnerships,
estates or trusts) and to U.S. trusts organized under the laws of any state in
the United States, so long as the following are true in the case of such a U.S.
trust:

the trust is unconditionally revocable by the grantor or grantors (the
person or persons who put the money into the trust);

there are no more than 10 grantors of the trust;

all the grantors are neither citizens nor residents of the United States;

each grantor provides an appropriately certified Form W-8 (or approved
substitute), as described under "Tax treatment of your investment;"

the trustee of the trust is a bank organized under the laws of the United
States or any state in the United States; and

the trustee supplies IDSC with appropriate tax documentation.

The certificate is available through AEBI offices located in Florida and New
York, and to the limited extent as described in the section "Selling agreements
with AEBI and Coutts," through a Coutts office located in California. An AEBI or
Coutts representative will help you prepare your purchase application. The
Issuer will process the application at our corporate offices in Minneapolis, MN,
U.S.A. When your application is accepted and we have received your initial
investment, we will send you a confirmation of your purchase, indicating your
account number and applicable rate of interest for your first term, as described
under "Rates for new purchases." See "Purchase policies" below.

Important: When opening an account, you must provide a Form W-8 or approved
substitute. See "Taxes on your earnings."
<PAGE>
Purchase policies:
You have 15 days from the date of purchase to cancel your investment
without penalty by notifying your AEBI or Coutts representative, or by
writing or calling the Client Service Organization at the address or phone
number on the cover of this prospectus. If you decide to cancel your
certificate within this 15-day period, you will not earn any interest.

The Issuer has complete discretion to determine whether to accept an
application and sell a certificate.

How to make investments at term end

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 #00-29-882 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.

Minimum amount you may wire: $1,000.

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

Purchases made by wire are accepted by AEFC only from banks located in the
United States.

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

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.

The Issuer, AEFC, its subsidiaries, AEBI, and Coutts are not responsible
for any delays that occur in wiring funds, including delays in processing
by the bank.
<PAGE>
You must pay any fee the bank charges for wiring.

Full and partial withdrawals

You may receive all or part of your money at any time. However:

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.

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

Partial withdrawals during a term must be at least $10,000. You may not
make a partial withdrawal if it would reduce your certificate balance to
less than $100,000. If you request such a withdrawal, we will contact you
for revised instructions.

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.

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.

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

Penalties for early withdrawal during a term:

When you request a full or partial withdrawal, we pay the amount you request:

first from interest credited during the current term;

then from the principal of your certificate.

Any withdrawals during a term exceeding the interest credited are deducted from
the principal and are used in determining any withdrawal charges. However, the
2% penalty is waived upon the death of the certificate owner.

Withdrawal penalties: When a penalty applies, a 2% withdrawal penalty will be
deducted from the account's remaining balance.
<PAGE>
For example, assume you invest $1 million in a certificate and select a
six-month term. Four months later assume you have earned $27,000 in interest.
The following demonstrates how the withdrawal charge is deducted:

When you withdraw a specific amount of money in excess of the interest credited,
the Issuer has to withdraw somewhat more from your account to cover the
withdrawal charge. For instance, suppose you request a $100,000 check on a $1
million investment. The first $27,000 paid to you is interest earned that term,
and the remaining $73,000 paid to you is principal. The Issuer would send you a
check for $100,000 and deduct a withdrawal charge of $1,460 (2% of $73,000) from
the remaining balance of your certificate. Your new balance would be $925,540.

Total investments $ 1,000,000
Interest credited $ 27,000
Total balance $ 1,027,000

Requested check $ 100,000
Credited interest withdrawn $ (27,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,460

Balance prior to withdrawal $ 1,027,000
Requested withdrawal check $ (100,000)
Withdrawal charge $ (1,460)
Total balance after withdrawal $ 925,540

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

Penalty exceptions: The 2% penalty is waived upon death of the certificate
owner.

For more information on withdrawal charges, talk with your AEBI or Coutts
representative.

When your certificate term ends

On or shortly after the end of the term you have selected for your certificate,
the Issuer will send you a notice indicating the interest rate that will apply
to the certificate for the new term. When your certificate term ends, the Issuer
will automatically renew your certificate for the same term unless you notify
your AEBI or Coutts representative otherwise. If you wish to select a different
term, you must notify your representative 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.
<PAGE>
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.

For most terms, 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:

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 the Issuer mails a check to you. A check
may be mailed earlier if the bank provides evidence that your check has
cleared.

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

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 other IDS certificates
available through AEBI or Coutts.

Transfer of ownership

While this certificate is not a negotiable instrument, it may be transferred or
assigned on the Issuer's records if proper written notice is received by the
Issuer. Ownership may be assigned or transferred to individuals or an entity
who, for U.S. tax purposes, is considered to be neither a citizen nor resident
of the United States. You may also pledge the certificate to AEBI or another
American Express Company affiliate or to Coutts as collateral security. Your
AEBI or Coutts representative can help you transfer ownership.
<PAGE>
For more information

For information on purchases, withdrawals, exchanges, transfers of ownership,
proper instructions and other service questions regarding your certificate,
please consult your AEBI relationship manager or Coutts client relationship
officer, or call the Issuer's toll free client service number listed on the back
cover.

Giving instructions and written notification

Your AEBI or Coutts representative will be happy to handle instructions
concerning your account. Written instructions may be provided to either your
representative's office or directly to the Issuer.

Proper written notice to your AEBI or Coutts representative or the Issuer must:

be addressed to your AEBI or Coutts office or the Issuer's corporate
office, in which case it must identify your AEBI or Coutts office,

include your account number and sufficient information for the Issuer to
carry out your request, and

be signed and dated by all registered owners.

The Issuer will acknowledge your written instructions. If your instructions are
incomplete or unclear, you will be contacted for revised instructions.

In the absence of any other written mandate or instructions you have provided to
AEBI or Coutts, you may elect in writing, on your initial or any subsequent
purchase application, to authorize AEBI or Coutts to act upon the sole verbal
instructions of any one of the named owners, and in turn to instruct the Issuer
with regard to any and all actions in connection with the certificate referenced
in the application as it may be modified from time to time by term changes,
renewals, additions or withdrawals. The individual providing verbal instructions
must be a named owner of the certificate involved. In providing such
authorization you agree that the Issuer, its transfer agent, AEBI and Coutts
will not be liable for any loss, liability, cost or expense arising in
connection with implementing such instructions, reasonably believed by the
Issuer, AEBI or Coutts, or their representatives, to be genuine. You may revoke
such authority at any time by providing proper written notice to your AEBI or
Coutts office.

All amounts payable to or by the Issuer in connection with this certificate are
payable at the Issuer's corporate office unless you are advised otherwise.
<PAGE>
Purchases by bank wire

You may wish to lock in a specific interest rate by using a bank wire to
purchase a certificate. Your representative can instruct you about how to use
this procedure. Using this procedure will allow you to start earning interest at
the earliest possible time. The minimum that may be wired to purchase a new
certificate is $100,000.

Wire orders will be accepted only in U.S. currency and only on days your bank,
the Issuer and Norwest Bank Minneapolis are open for business. The payment must
be received by the Issuer before 12 noon Central U.S.A. time to be credited that
day. Otherwise, it will be processed the next business day. The wire purchase
will not be made until the wired amount is received and the purchase is accepted
by the Issuer. Wire transfers not originating from AEBI and Coutts are accepted
by IDSC's corporate office only when originating from banks located in the
United States of America. Any delays that may occur in wiring the funds,
including delays in processing by the banks, are not the responsibility of the
Issuer. Wire orders may be rejected if they do not contain complete information.

While the Issuer does not charge a service fee for incoming wires, you must pay
any charge assessed by your bank for the wire service. If a wire order is
rejected, all money received will be returned promptly less any costs incurred
in rejecting it.

Tax treatment of your investment

Interest paid on your certificate is "portfolio interest" as defined in U.S.
Internal Revenue Code Section 871(h) if earned by a nonresident alien who has
supplied the Issuer with Form W-8, Certificate of Foreign Status. Form W-8 must
be supplied with both a current mailing address and an address of foreign
residency, if different. The Issuer will not accept purchases of certificates by
nonresident aliens without an appropriately certified Form W-8 (or approved
substitute). The Form W-8 must be resupplied every three calendar years. If you
have supplied a Form W-8 that certifies that you are a nonresident alien, the
interest income 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. We
are required to attach your Form W-8 to the forms sent to the Internal Revenue
Service (IRS). Your interest income will be reported to the IRS even though it
is not taxed by the U.S. Government. The United States participates in various
tax treaties with foreign countries. Those treaties provide that tax information
may be shared upon request between the United States and such foreign
governments.

Withholding taxes

If you fail to provide a Form W-8 as required above, you will be subject to
backup withholding on interest payments and surrenders.
<PAGE>
Estate tax: If you are a nonresident alien and you die while owning a
certificate, then, depending on the circumstances, the Issuer generally will not
act on instructions with regard to the certificate unless the Issuer first
receives, at a minimum, a statement from persons the Issuer believes are
knowledgeable about your estate. The statement must be in a form satisfactory to
the Issuer 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 the
Issuer 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 described in "Buying your certificate" under "How to
invest and withdraw funds," the policies and procedures described above will
apply with regard to each grantor.

How your money is used and protected

Invested and guaranteed by the Issuer

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:

interest to certificate owners; and

various expenses, including taxes, fees to AEFC for advisory and other
services and distribution fees to American Express Financial Advisors Inc.
<PAGE>
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 American Express Investors 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, 1997, the
amortized cost of these investments exceeded the required carrying value of our
outstanding certificates by more than $176 million.

Backed by our investments

The Issuer's investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1997:

Type of investment Net amount invested

Corporate and other bonds 43%
Government agency bonds 34
Preferred stocks 17
Mortgages 5
Municipal bonds 1

As of Dec. 31, 1997 about 91% 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.

<PAGE>

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, 1997 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 the Issuer 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."

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 Corporation. 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, 1997, IDSC held about 9% of its investment portfolio (including
bonds, preferred stocks and mortgages) in investments rated below investment
grade.

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.

<PAGE>
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.

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. We
expect that outstanding securities loans will not exceed 10 percent of IDSC's
assets.

When-issued securities-
Some of our investments in debt securities are purchased on a when-issued or
similar 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. When-issued
securities are subject to market fluctuations and they may affect IDSC's
investment portfolio the same as owned securities.

<PAGE>

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 may 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. The Issuer may enter into
other financial transactions, including futures and other derivatives, for the
purpose of managing the interest rate exposures associated with the Issuer's
assets or liabilities. 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.
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.

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

How your money is managed

Relationship between the Issuer and American Express Financial Corporation

The Issuer 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 the Issuer 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. The Issuer
and AEFC have never failed to meet their certificate payments.
<PAGE>

During its many years in operation, AEFC has become a leading manager of
investments in mortgages and securities. As of Dec. 31, 1997, AEFC managed
investments, including its own, of more than $173 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 8,500 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:

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

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

Capital structure and certificates issued

The Issuer 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 the fiscal year ended Dec. 31, 1997, the Issuer had issued (in face
amount) $165,818,152 of installment certificates and $1,470,915,530 of single
payment certificates. As of Dec. 31, 1997, the Issuer had issued (in face
amount) $13,493,767,867 of installment certificates and $17,259,360,607 of
single payment certificates since its inception in 1941.

Investment management and services

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

providing investment research;

making specific investment recommendations; and
<PAGE>
executing purchase and sale orders according to our policy of obtaining
the best price and execution.

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 the Issuer 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).
Effective Jan. 1, 1998, the fee on any amount over $ 1 billion will be 0.107%.

Advisory and services fee computation:

Included assets Percentage of total book value

First $250 million 0.750%
Next 250 million 0.650
Next 250 million 0.550
Next 250 million 0.500
Any amount over 1 billion 0.107

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

Advisory and services fee for the past three years:

Percentage of
Year Total fees included assets
1997 $17,232,602 0.50%
1996 16,989,093 0.50
1995 16,472,458 0.50

Estimated advisory and services fees for 1998 are $9,361,000.

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

costs incurred by us in connection with real estate and mortgages;

taxes;

depository and custodian fees;
<PAGE>
brokerage commissions;

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;

fees and expenses of our directors who are not officers or employees
of AEFC;

provision for certificate reserves (interest accrued on certificate owner
accounts); and

expenses of customer settlements not attributable to sales function.

Distribution

Under a Distribution Agreement with American Express Financial Advisors
Inc., the Issuer pays an annualized fee equal to 1% of the amount outstanding
for the distribution of this certificate. Payments are made at the end of each
term on certificates with a one-, two- or three-month term. Payments are made
each quarter from issuance date on certificates with a six-, 12-, 24- or
36-month term.

Total distribution fees paid to American Express Financial Advisors Inc. for all
series of certificates amounted to $30,072,811 during the year ended Dec. 31,
1997. The Issuer expects to pay American Express Financial Advisors Inc.
distribution fees amounting to $27,916,000 during 1998.

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

American Express Financial Advisors Inc. pays selling expenses in connection
with services to the Issuer. The Issuer's board of directors, including a
majority of directors who are not interested persons of AEFC or IDSC, approved
this distribution agreement.

Selling agreements with AEBI and Coutts: In turn, under Selling Agent Agreements
with AEBI and Coutts, American Express Financial Advisors compensates each for
their services as Selling Agents of this certificate as follows:

AEBI is paid an annualized fee ranging from 0.50% to 1.25% of the reserve
balance of each certificate, depending on the amount outstanding for each such
certificate, with this exception: the fee will be 0.30% of the reserve balance
of each certificate with an amount outstanding of $1 million or more when:

the aggregate reserve balance for that certificate, and any other
certificate with identical ownership and an amount outstanding of $1
million or more, is at least $20 million;
<PAGE>
the aggregate reserve balance is invested for terms that average at
least six months; and

at least $5 million of this aggregate reserve balance is invested for a
term of 12 months or longer.

Coutts is paid an annualized fee ranging from 0.425% to 0.68% of the reserve
balance of each certificate owned by a client who is a former client of AEBI,
depending on the amount outstanding for each certificate. These clients must
have continuously owned a certificate since Nov. 10, 1994. Coutts is also
compensated on additional investments and exchanges made by such clients to
other certificates only to the extent that clients have the right to make
additional investments or exchanges.

American Express Financial Advisors has entered into a consulting agreement with
AEBI under which AEBI provides consulting services related to any selling agent
agreements between American Express Financial Advisors and other Edge Act
corporations. For these services, American Express Financial Advisors pays AEBI
a fee for this certificate ranging from 0.075% to 0.12% of the reserve balance
of each certificate, depending on the amount outstanding for each certificate
for which another Edge Act corporation is the selling agent.

Such payments will be made periodically in arrears.

These fees are not assessed to your certificate account.

About AEBI and Coutts

AEBI is an Edge Act corporation organized under the provisions of Section 25(a)
of the Federal Reserve Act. It is a wholly owned subsidiary of American Express
Bank Ltd. (AEBL). As an Edge Act corporation, AEBI is subject to the provisions
of Section 25(a) of the Federal Reserve Act and Regulation K of the Board of
Governors of the Federal Reserve System (the Federal Reserve). It is supervised
and regulated by the Federal Reserve.

AEBI has an extensive international high net-worth client base that is serviced
by a marketing staff in New York and Florida. The banking and financial products
offered by AEBI include checking, money market and time deposits, credit
services, check collection services, foreign exchange, funds transfer,
investment advisory services and securities brokerage services. As of Dec. 31,
1997, AEBI had total assets of $608 million and total equity of $162 million.
<PAGE>
Coutts is an Edge Act corporation organized under the provisions of Section
25(a) of the Federal Reserve Act. It is an indirect wholly owned subsidiary of
National Westminster Bank PLC. As an Edge Act corporation, Coutts is subject to
the provisions of Section 25(a) of the Federal Reserve Act and Regulation K of
the Board of Governors of the Federal Reserve System (the Federal Reserve). It
is supervised and regulated by the Federal Reserve.

Although AEBI and Coutts are banking entities, the American Express Investors
Certificate is not a bank product, nor is it backed or guaranteed by AEBI or
Coutts, by AEBL, by NatWest PLC or by any other bank, nor is it guaranteed or
insured by the FDIC or any other federal agency. AEBI is registered where
necessary as a securities broker-dealer.

Transfer Agent

Under a Transfer Agency Agreement, American Express Client Service Corporation
(AECSC), a wholly-owned subsidiary of AEFC maintains certificate owner accounts
and records. IDSC pays AECSC a monthly fee of one-twelfth of $10.353 per
certificate owner account for this service.

Employment of other American Express affiliates

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

we receive prices and executions at least as favorable as those offered
by qualified independent brokers performing similar services;

the affiliate charges us commissions consistent with those charged to
comparable unaffiliated customers for similar transactions; and

the affiliate's employment is consistent with the terms of the current
Investment Advisory and Services Agreement and federal securities laws.

Directors and officers

The Issuer'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 $38,000 during 1997 to directors not employed by AEFC.
<PAGE>
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>
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.

Jeffrey S. Horton
Born in 1961. Vice president and treasurer since December 1997.
Vice president and corporate treasurer of AEFC since December 1997. Controller,
American Express Technologies - Financial Services of AEFC from July 1997 to
December 1997. Controller, Risk Management Products of AEFC from May 1998 to
July 1997. Director of finance and analysis, Corporate Treasury of AEFC from
June 1990 to May 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.
<PAGE>
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.

The Issuer 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.

Independent 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, 1997. 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.
<PAGE>
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>
(Back cover)

Quick telephone reference

Selling Agent:

American Express Bank International

Region offices

101 East 52nd Street
29th Floor
New York, NY 10022
(212) 415-9500

1221 Brickell Avenue
8th Floor
Miami, FL 33131
(305) 350-2502

Selling agent

Coutts & Co. (USA) International
701 Brickell Avenue
23rd Floor
Miami, FL 33131
(305) 789-3700

American Express Investors Certificate
IDS Tower 10
Minneapolis, MN 55440-0010

Distributed by American Express Financial Advisors Inc.
<PAGE>
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, 1997 1996 1995 1994 1993

($ thousands)

Statement of Operations Data:

<S> <C> <C> <C> <C> <C>
Investment income $258,232 $251,481 $256,913 $207,975 $236,859
Investment expenses 70,137 62,851 62,817 58,690 65,404

Net investment income before provision for
certificate reserves and income tax benefit 188,095 188,630 194,096 149,285 171,455
Net provision for certificate reserves 165,136 171,968 176,407 107,288 123,516

Net investment income before income
tax benefit 22,959 16,662 17,689 41,997 47,939
Income tax benefit 3,682 6,537 9,097 2,663 3,365

Net investment income 26,641 23,199 26,786 44,660 51,304

Realized gain (loss) on investments - net:

Securities of unaffiliated issuers 980 (444) 452 (7,514) (9,870)
Other - unaffiliated - 101 (120) 1,638 (418)

Net realized gain (loss) on investments
before income taxes 980 (343) 332 (5,876) (10,288)
Income tax (expense) benefit (343) 120 (117) 2,047 4,617

Net realized gain (loss) on investments 637 (223) 215 (3,829) (5,671)
Net income - wholly owned subsidiary 328 1,251 373 241 120

Net income $27,606 $24,227 $27,374 $41,072 $45,753

Cash dividends declared $- $65,000 $- $40,200 $64,500

Balance Sheet Data:

Total assets $4,053,648 $3,563,234 $3,912,131 $3,040,857 $2,951,405
Certificate loans 37,098 43,509 51,147 58,203 67,429
Certificate reserves 3,724,978 3,283,191 3,628,574 2,887,405 2,777,451
Stockholder's equity 239,510 194,550 250,307 141,852 161,138

IDS Certificate Company (IDSC) is 100% owned by American Express Financial Corporation (Parent).
</TABLE>

<PAGE>

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 year 1997, total assets and certificate reserves increased due
to certificate sales exceeding certificate maturities and surrenders. The excess
of certificate sales over maturities and surrenders resulted primarily from a
special introductory offer of the 7- and 13-month term Flexible Savings
certificate. The increase in total assets in 1997 reflects also, an increase of
$27 million in net unrealized appreciation on investment securities classified
as available for sale.

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.

1997 Compared to 1996:

Gross investment income increased 2.7% due primarily to a higher average
balance of invested assets.

Investment expenses increased 12% in 1997. The increase resulted primarily
from higher amortization of premiums paid for index options of $4.4 million,
higher distribution fees of $1.8 million and $3.2 million of interest expense on
reverse repurchase and interest rate swap agreements entered into in 1997. These
higher expenses were partially offset by $2.3 million lower amortization of
premiums paid for interest rate caps, corridors and floors due primarily to the
expiration of the cap and corridor agreements in 1996 and early 1997.

Net provision for certificate reserves decreased 4.0% due primarily to the
net of lower accrual rates and a higher average balance of certificate reserves
during 1997.

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.

<PAGE>

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.

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.

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.

Certificate sales remained strong in 1997 reflecting clients' ongoing
desire for safety of principal. Sales of certificates totaled $1.5 billion in
1997 compared to $1.0 billion in 1996 and $1.8 billion in 1995. The higher
certificate sales in 1997 over 1996 resulted primarily from a special
introductory promotion of IDSC's 7- and 13-month term Flexible Savings
certificate which produced sales of $238 million. Certificate sales in 1997
benefited also, from higher sales of the Preferred Investors certificate of $113
million and sales of the Special Deposits certificate of $85 million. The
Preferred Investors certificate was first offered for sale early in the last
quarter of 1996. The Special Deposits certificate was first offered for sale to
private banking clients of American Express Bank Ltd. in Hong Kong late in the
third quarter of 1997. Certificate sales in 1995 benefited from a special
introductory promotion of IDSC's 11-month term Flexible Savings certificate
which produced sales of $562 million.

The special promotion of the 7- and 13-month term Flexible Savings
certificate was offered from Sept. 10, 1997 to Nov. 25, 1997, and applied only
to sales of new certificate accounts during the promotion period. Certificates
sold during the promotion period received a special interest rate, determined on
a weekly basis, of one percentage point above the Bank Rate Monitor Top 25
Market Average(TM) of comparable length certificates of deposit.

<PAGE>

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 $1.3 billion during 1997
compared to $1.7 billion in 1996 and $1.0 billion in 1995. The higher
certificate maturities and surrenders in 1996 resulted 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, 1997, securities classified as held to maturity and carried at
amortized cost were $.8 billion. Securities classified as available for sale and
carried at fair value were $2.9 billion. These securities, which comprise 92% of
IDSC's total invested assets, are well diversified. Of these securities, 98%
have fixed maturities of which 91% 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.

<PAGE>

During the year ended Dec. 31, 1997, IDSC sold held-to-maturity securities with
an amortized cost and fair value of $33.0 million and $33.9 million,
respectively. The securities were sold due to significant deterioration in the
issuers' creditworthiness. During the same period in 1997, securities classified
as available for sale were sold with an amortized cost and fair value of $161
million. The securities were sold in general management of the investment
portfolio.

There were no transfers of available-for-sale or held-to-maturity
securities during the years ended Dec. 31, 1997 and 1996. 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".

Market risk and derivative financial instruments:

The sensitivity analysis of two different tests of market risk discussed
below estimate the effects of hypothetical sudden and sustained changes in the
applicable market conditions on the ensuing one year's earnings. The market
changes, assumed to occur as of Dec. 31, 1997, are a 100 basis point increase in
market interest rates and a 10% decline in a major stock market index.
Computation of the prospective effects of hypothetical interest rate and major
stock market index changes are based on numerous assumptions, including relative
levels of market interest rates and the major stock market index level, as well
as the levels of assets and liabilities. The hypothetical changes and
assumptions will be different than what actually occurs in the future.
Furthermore, the computations do not anticipate actions that may be taken by
management if the hypothetical market changes actually occurred over time. As a
result, actual earnings affects in the future will differ from those quantified
below.

IDSC primarily invests in intermediate-term and long-term fixed income
securities to provide its certificate owners with a competitive rate of return
on their certificates while managing risk. These investment securities provide
IDSC with a historically dependable and targeted margin between the interest
rate earned on investments and the interest rate credited to certificate owners'
accounts. IDSC does not invest in securities to generate trading profits for its
own account.

IDSC's Investment Committee, which comprises senior business managers,
meets regularly to review models projecting different interest rate scenarios
and their impact on IDSC's profitability. The committee's objective is to
structure IDSC's portfolio of investment securities based upon the type and
behavior of the certificates in the certificate reserve liabilities, to achieve
targeted levels of profitability and meet certificate contractual obligations

Rates credited to certificate owners' accounts are generally reset at
shorter intervals than the maturity of underlying investments. Therefore, IDSC's
margins may be negatively impacted by increases in the general level of interest
rates. Part of the committee's strategies include the purchase of derivatives,
such as interest rate caps, corridors, floors and swaps, for hedging purposes.
On a certain series of certificates, interest is credited to the certificate
owners' accounts based upon the relative change in a major stock market index

<PAGE>

between the beginning and end of the certificates' term. As a means of
hedging its obligations under the provisions of these certificates, the
committee purchases and writes call options on the major stock market index. See
note 9 to the financial statements for additional information regarding
derivative financial instruments.

The negative impact on IDSC's earnings of the 100 basis point increase in
interest rates described above would be approximately $5.9 million pretax. It
assumes repricings and customer behavior based on the application of proprietary
models to the book of business at Dec. 31, 1997. The 10% decrease in a major
stock market index level would have a minimal impact on IDSC's earnings because
the income effect is a decrease in option income and a corresponding decrease in
interest credited to the Stock Market certificate owners' accounts.

Year 2000 Issue:

The Year 2000 issue is the result of computer programs having been written
using two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDSC. All of the systems
used by IDSC are maintained by its Parent and are utilized by multiple
subsidiaries and affiliates of the Parent. IDSC's business is heavily dependent
upon the Parent's computer systems, and has significant interactions with
systems of third parties.

A comprehensive review of the Parent's computer systems and business
processes, including those specific to IDSC, has been conducted to identify the
major systems that could be affected by the Year 2000 issue. Steps are being
taken to resolve any potential problems including modification to existing
software and the purchase of new software. These measures are scheduled to be
completed and tested on a timely basis. The Parent's goal is to complete
internal remediation and testing of each system by the end of 1998 and to
continue compliance efforts through 1999.

The Parent is evaluating the Year 2000 readiness of advisors and other
third parties whose system failures could have an impact on IDSC's operations.
The potential materiality of any such impact is not known at this time.

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, 1997 and 1996 was
5.2%. IDSC's current regulatory requirement is a ratio of 5.0%.

<PAGE>

Annual Financial Information

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>

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, 1997 and 1996, and the related statements of operations,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1997. 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, 1997 and 1996 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, 1997 and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.

ERNST & YOUNG LLP
Minneapolis, Minnesota
February 5, 1998

<PAGE>

Balance Sheets, Dec. 31,

Assets

<S> <C> <C>
Qualified Assets (note 2) 1997 1996
($ thousands)

Investments in unaffiliated issuers (notes 3, 4 and 10):

Cash and cash equivalents $- $111,331
Held-to-maturity securities 758,143 863,921
Available-for-sale securities 2,911,524 2,212,968
First mortgage loans on real estate 212,433 218,697
Certificate loans - secured by certificate reserves 37,098 43,509
Investments in and advances to affiliates 6,772 6,444

Total investments 3,925,970 3,456,870

Receivables:

Dividends and interest 48,817 44,013
Investment securities sold 1,635 654

Total receivables 50,452 44,667

Other (notes 9 and 10) 56,127 36,164

Total qualified assets 4,032,549 3,537,701

Other Assets

Deferred distribution fees and other 21,099 25,533

Total assets $4,053,648 $3,563,234

See notes to financial statements.

<PAGE>

Balance Sheets, Dec. 31, (continued)

Liabilities and Stockholder's Equity

Liabilities 1997 1996
($ thousands)
Certificate Reserves (notes 5 and 10):
Installment certificates:

Reserves to mature $343,219 $344,344
Additional credits and accrued interest 19,554 21,931
Advance payments and accrued interest 968 1,198
Other 56 55
Fully paid certificates:

Reserves to mature 3,186,191 2,747,690
Additional credits and accrued interest 174,699 167,673
Due to unlocated certificate holders 291 300

Total certificate reserves 3,724,978 3,283,191

Accounts Payable and Accrued Liabilities:

Due to Parent (note 7A) 1,639 1,424
Due to Parent for federal income taxes 495 1,737
Due to affiliates (note 7B, 7C and 7D) 331 279
Reverse repurchase agreements 22,000 -
Payable for investment securities purchased 19,601 61,979
Accounts payable, accrued expenses and other (notes 9 and 10) 29,919 11,977

Total accounts payable and accrued liabilities 73,985 77,396

Deferred federal income taxes (note 8) 15,175 8,097

Total liabilities 3,814,138 3,368,684

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 143,844 143,844
Retained earnings:

Appropriated for predeclared additional credits/interest 6,375 11,989
Appropriated for additional interest on advance payments 50 50
Unappropriated 55,948 22,728
Unrealized holding gains on investment

securities - net (note 3A) 31,793 14,439

Total stockholder's equity 239,510 194,550

Total liabilities and stockholder's equity $4,053,648 $3,563,234

See notes to financial statements.
</TABLE>

<PAGE>

Statements of Operations

Year ended Dec. 31, 1997 1996 1995
($ thousands)
<S> <C> <C> <C>
Investment Income:

Interest income from investments:
Bonds and notes:

Unaffiliated issuers $191,190 $184,653 $181,902
Mortgage loans on real estate:
Unaffiliated 18,053 19,583 22,171
Affiliated - 36 56
Certificate loans 2,200 2,533 2,963
Dividends 44,543 44,100 48,614
Other 2,246 576 1,207

Total investment income 258,232 251,481 256,913

Investment Expenses:

Parent and affiliated company fees (note 7):

Distribution 34,507 32,732 33,977
Investment advisory and services 17,233 16,989 16,472
Depositary 238 228 242
Options (note 9) 14,597 10,156 8,038
Interest rate caps, corridors and floors (note 9) 35 2,351 3,725
Reverse repurchase agreements 1,217 - -
Interest rate swap agreements (note 9) 1,956 - -
Other 354 395 363

Total investment expenses 70,137 62,851 62,817

Net investment income before provision
for certificate reserves and income tax benefit $188,095 $188,630 $194,096

See notes to financial statements.

<PAGE>

Statements of Operations (continued)

Year ended Dec. 31, 1997 1996 1995
($ thousands)
Provision for Certificate Reserves (notes 5 and 9):
According to the terms of the certificates:

Provision for certificate reserves $9,796 $10,445 $11,009
Interest on additional credits 1,244 1,487 2,300
Interest on advance payments 50 61 73
Additional credits/interest authorized by IDSC:

On fully paid certificates 150,752 155,411 157,857
On installment certificates 4,323 5,637 6,288

Total provision for certificate reserves before reserve
recoveries 166,165 173,041 177,527
Reserve recoveries from terminations
prior to maturity (1,029) (1,073) (1,120)

Net provision for certificate reserves 165,136 171,968 176,407

Net investment income before income tax benefit 22,959 16,662 17,689
Income tax benefit (note 8) 3,682 6,537 9,097

Net investment income 26,641 23,199 26,786

Realized gain (loss) on investments - net:

Securities of unaffiliated issuers 980 (444) 452
Other-unaffiliated - 101 (120)

Net realized gain (loss) on investments before income taxes 980 (343) 332

Income tax (expense) benefit (note 8):

Current (304) 772 160
Deferred (39) (652) (277)

Total income tax (expense) benefit (343) 120 (117)

Net realized gain (loss) on investments 637 (223) 215

Net income - wholly owned subsidiary 328 1,251 373

Net income $27,606 $24,227 $27,374

See notes to financial statements.

<PAGE>

Statements of Stockholder's Equity

Year ended Dec. 31, 1997 1996 1995
($ 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 $143,844 $168,844 $140,344
Contribution from Parent - - 28,500
Cash dividends declared - (25,000) -

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

Retained Earnings:

Appropriated for predeclared additional credits/interest (note 5B):
Balance at beginning of year $11,989 $18,878 $18,398
Transferred (to) from unappropriated retained earnings (5,614) (6,889) 480

Balance at end of year $6,375 $11,989 $18,878

Appropriated for additional interest on advance payments (note 5C):
Balance at beginning and end of year $50 $50 $50

Unappropriated (note 6):

Balance at beginning of year $22,728 $31,612 $4,718
Net income 27,606 24,227 27,374
Transferred from (to) appropriated retained earnings 5,614 6,889 (480)
Cash dividends declared - (40,000) -

Balance at end of year $55,948 $22,728 $31,612

Unrealized holding gains and losses on investment securities net (notes 1 and
3A):

Balance at beginning of year $14,439 $29,423 ($23,158)
Change during year 17,354 (14,984) 52,581

Balance at end of year $31,793 $14,439 $29,423

Total stockholder's equity $239,510 $194,550 $250,307

See notes to financial statements.

<PAGE>

Statements of Cash Flows

Year ended Dec. 31, 1997 1996 1995
($ thousands)
Cash flows from operating activities:

Net income $27,606 $24,227 $27,374
Adjustments to reconcile net income to net
cash provided by operating activities:

Net income of wholly owned subsidiary (328) (1,251) (373)
Net provision for certificate reserves 165,136 171,968 176,407
Interest income added to certificate loans (1,414) (1,631) (1,902)
Amortization of premiums/discounts-net 15,484 14,039 19,232
Provision for deferred federal income taxes (2,266) (1,124) (2,652)
Net realized (gain) loss on investments before income taxes (980) 343 (332)
(Increase) decrease in dividends and interest receivable (4,804) 5,619 (7,371)
Decrease (increase) in deferred distribution fees 4,434 2,761 (1,144)
Decrease in other assets - - 466
Increase (decrease) in other liabilities 443 (679) (1,549)

Net cash provided by operating activities 203,311 214,272 208,156

Cash flows from investing activities:
Maturity and redemption of investments:

Held-to-maturity securities 76,678 163,066 315,766
Available-for-sale securities 408,019 537,565 325,521
Other investments 79,929 52,189 46,004
Sale of investments:
Held-to-maturity securities 33,910 24,984 22,305
Available-for-sale securities 160,207 356,194 48,372
Other investments - 385 21
Certificate loan payments 4,814 6,003 6,061
Purchase of investments:
Held-to-maturity securities (4,565) (49,984) (208,140)
Available-for-sale securities (1,283,620) (617,138) (1,397,983)
Other investments (62,831) (28,617) (17,234)
Certificate loan fundings (5,021) (5,288) (7,776)

Net cash (used in) provided by investing activities ($592,480) $439,359 ($867,083)

See notes to financial statements.

<PAGE>

Statements of Cash Flows (continued)

Year ended Dec. 31, 1997 1996 1995
($ thousands)

Cash flows from financing activities:

Payments from certificate owners $1,580,013 $1,129,023 $1,577,884
Capital contribution from Parent - - 28,500
Proceeds from reverse repurchase agreements 433,000 - -
Certificate maturities and cash surrenders (1,324,175) (1,663,196) (1,030,712)
Payments under reverse repurchase agreements (411,000) - -
Dividends paid - (65,000) -

Net cash provided by (used in) financing activities 277,838 (599,173) 575,672

Net (decrease) increase in cash and cash equivalents (111,331) 54,458 (83,255)
Cash and cash equivalents beginning of year 111,331 56,873 140,128

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

Supplemental disclosures including non-cash transactions:

Cash (paid) received for income taxes ($104) $7,195 $6,854
Certificate maturities and surrenders through
loan reductions 8,032 8,554 10,673

See notes to financial statements.
</TABLE>

<PAGE>

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 eight types of certificates with specified maturities
ranging from ten 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 two 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 non-investment
company subsidiaries of 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.

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.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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.

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 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.

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 judgment
as to the ultimate collectibility of principal, interest payments received are
either recognized as income or applied to the recorded investment in the loan.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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 prior to maturity, unamortized deferred
distribution fees are recognized in expense and any related surrender charges
are recognized as a reduction in provision for certificate reserves.

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 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 $3,694,204 and $3,259,260 at Dec. 31, 1997 and
1996, respectively. IDSC had qualified assets of $3,964,036 at Dec. 31, 1997 and
$3,453,508 at Dec. 31, 1996, excluding net unrealized appreciation on
available-for-sale securities of $48,912 and $22,214 at Dec. 31, 1997 and 1996,
respectively and payable for securities purchased of $19,601 and $61,979 at Dec.
31, 1997 and 1996, 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.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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, 1997

Required
Deposits deposits Excess

<S> <C> <C> <C>
Deposits to meet certificate
liability requirements:

States $363 $328 $35
Central Depositary 3,826,505 3,650,121 176,384

Total $3,826,868 $3,650,449 $176,419

Dec. 31, 1996

Required
Deposits deposits Excess

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
</TABLE>

The assets on deposit at Dec. 31, 1997 and 1996 consisted of securities
having a deposit value of $3,580,866 and $3,117,715, respectively; mortgage
loans of $212,433 and $218,697, respectively; and other assets of $33,569 and
$18,991, respectively.

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.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

The following is a summary of securities held to maturity and securities
available for sale at Dec. 31, 1997 and Dec. 31, 1996.

<TABLE><CAPTION>
Dec. 31, 1997
Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses

<S> <C> <C> <C> <C>
HELD TO MATURITY

U.S. Government and
agencies obligations $363 $369 $6 $-
Mortgage-backed securities 29,340 29,969 629 -
Corporate debt securities 242,050 248,455 6,493 88
Stated maturity preferred stock 486,390 505,522 19,332 200

$758,143 $784,315 $26,460 $288
AVAILABLE FOR SALE

Mortgage-backed securities $1,251,283 $1,274,417 $23,336 $202
State and municipal obligations 41,116 42,526 1,410 -
Corporate debt securities 1,417,668 1,438,640 22,636 1,664
Stated maturity preferred stock 63,214 64,444 1,284 54
Perpetual preferred stock 88,726 91,497 2,771 -
Common stock 605 - - 605

$2,862,612 $2,911,524 $51,437 $2,525

Dec. 31, 1996
Gross Gross
Amortized Fair unrealized unrealized
cost value gains losses
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
</TABLE>
<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

The amortized cost and fair value of securities held to maturity and
available for sale, by contractual maturity, at Dec. 31, 1997, 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

<S> <C> <C>
HELD TO MATURITY
Due within 1 year $78,343 $78,991
Due after 1 through 5 years 381,844 393,317
Due after 5 years through 10 years 168,247 175,540
Due after 10 years 100,369 106,498
728,803 754,346

Mortgage-backed securities 29,340 29,969

$758,143 $784,315

AVAILABLE FOR SALE

Due within 1 year $53,744 $54,074
Due after 1 through 5 years 785,191 794,535
Due after 5 years through 10 years 469,792 480,813
Due after 10 years 213,271 216,188
1,521,998 1,545,610

Mortgage-backed securities 1,251,283 1,274,417
Perpetual preferred stock 88,726 91,497
Common stock 605 -

$2,862,612 $2,911,524

</TABLE>

During the years ended Dec. 31, 1997 and 1996, there were no securities
classified as trading securities.

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, 1997, 1996 and 1995, were as follows:
<TABLE><CAPTION>

1997 1996 1995
<S> <C> <C> <C>
Proceeds $161,188 $313,976 $83,970
Gross realized gains 1,292 456 36
Gross realized losses 1,637 5,836 1,854

</TABLE>

Sales of held-to-maturity securities, due to significant credit
deterioration, during the years ended Dec. 31, 1997, 1996 and 1995, were as
follows:
<TABLE><CAPTION>

1997 1996 1995
<S> <C> <C> <C>
Amortized cost $32,969 $22,297 $22,782
Gross realized gains 1,621 3,200 2
Gross realized losses 680 513 479

</TABLE>

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

During the years ended Dec. 31, 1997 and 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 89% and 85% of
IDSC's total invested assets at Dec. 31, 1997 and 1996, 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 1997 1996
Aaa/AAA 44% 41%
Aa/AA 1 1
Aa/A 1 1
A/A 14 20
A/BBB 6 6
Baa/BBB 25 24
Below investment grade 9 7
100% 100%

Of the securities rated Aaa/AAA, 83% at Dec. 31, 1997 and 87% at Dec. 31,
1996 are U.S. Government Agency mortgage-backed securities that are not rated by
a public rating agency. Approximately 9% at Dec. 31, 1997 and 11% at Dec. 31,
1996 of other securities with fixed maturities are rated by Parent's internal
analysts. At Dec. 31, 1997 and 1996 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 incurred by the issuer of the restricted securities.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

4. Investments in first mortgage loans on real estate

At Dec. 31, 1997 and 1996, IDSC's recorded investment in impaired mortgage
loans was $363 and $847, respectively, and the reserve for loss on those amounts
was $261 and $611, respectively. During 1997, 1996 and 1995, the average
recorded investment in impaired mortgage loans was $743, $925 and $1,052,
respectively.

IDSC recognized $37, $88 and $53 of interest income related to impaired
mortgage loans for the years ended Dec. 31, 1997, 1996 and 1995, respectively.

During the years ended Dec. 31, 1997, 1996 and 1995, there were no changes
in the reserve for loss on mortgage loans of $611.

At Dec. 31, 1997 and 1996, approximately 5% and 6%, respectively, 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 1997 1996
South Atlantic 23% 22%
West North Central 21 17
East North Central 18 21
Mountain 13 15
Middle Atlantic 11 14
West South Central 6 5
New England 5 3
Pacific 3 3

100% 100%

Property Type 1997 1996

Retail/shopping centers 31% 36%
Apartments 23 33
Office buildings 20 9
Industrial buildings 17 13
Other 9 9

100% 100%
<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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.

Dec. 31, 1997 Dec. 31, 1996

Carrying Fair Carrying Fair
amount value amount value

First mortgage loans on real estate $213,044 $216,951 $219,308 $221,253
Reserve for losses (611) - (611) -

Net first mortgage loans on
real estate $212,433 $216,951 $218,697 $221,253

At Dec. 31, 1997 and 1996, commitments for fundings of first mortgage
loans, at market interest rates, aggregated $9,375 and $9,300, 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, 1997
and 1996 were:
1997

Average Average
Reserve gross additional
balance accumulation credit
rate rate
Installment certificates:

Reserves to mature:
With guaranteed rates $24,316 3.50 1.35%
Without guaranteed rates (A) 318,903 - 2.96
Additional credits and accrued interest 19,554 3.17 -
Advance payments and accrued interest (C) 968 3.17 1.68
Other 56 -
Fully paid certificates:
Reserves to mature:
With guaranteed rates 165,258 3.21 1.83
Without guaranteed rates (A) and (D) 3,020,933 - 5.03
Additional credits and accrued interest 174,699 3.21 -
Due to unlocated certificate holders 291 - -

$3,724,978
<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

1996

Average Average
Reserve gross additional
balance accumulation credit
rate rate

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 1,198 3.15 1.70
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

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, 1997, $6,375 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 3.17%. IDSC has increased the rate of
accrual to 4.85% through April 30, 1999. 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, 1997 and
1996 was $416,485 and $309,570, respectively.

E) The carrying amounts and fair values of certificate reserves consisted
of the following at Dec. 31, 1997 and 1996. Fair values of certificate reserves
with interest rate terms of one year or less approximated the carrying values
less any applicable surrender charges.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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>

1997 1996

Carrying Fair Carrying Fair
amount value amount value

<S> <C> <C> <C> <C>
Reserves with terms of one year or less $3,186,971 $3,185,396 $2,637,144 $2,635,835
Other 538,007 551,988 646,047 673,772

Total certificate reserves 3,724,978 3,737,384 3,283,191 3,309,607
Unapplied certificate transactions 868 868 1,217 1,217
Certificate loans and accrued interest (37,495) (37,495) (43,980) (43,980)

Total $3,688,351 $3,700,757 $3,240,428 $3,266,844
</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 1998 and 1999 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 0.750% on the first $250
million of total book value of assets of IDSC, 0.650% on the next $250 million,
0.550% on the next $250 million, 0.500% on the next $250 million and 0.107% on
the amount in excess of $1 billion. Effective Jan. 1, 1998, the fee on the
amount in excess of $1 billion was changed from 0.450% to 0.107%. 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.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

From time to time, IDSC may sponsor or participate in sales promotions
involving one or more of the certificates and their respective terms. These
promotions may offer a special interest rate to attract new clients or retain
existing clients. To cover the cost of these promotions, distribution fees paid
to American Express Financial Advisors may be lowered. For the promotion of
IDSC's 7-month and 13-month term Flexible Savings certificate which occurred
Sept. 10, 1997 to Nov. 25, 1997, the distribution fee for sales of these
certificates was lowered to 0.067%.

The aggregate fees payable under the agreements per $1,000 face amount of
installment certificates and a summary of the periods over which the fees are
payable are:
<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>
On sales effective April 30, 1997 $25.00 $ 2.50 $22.50 9

On sales prior to April 30, 1997(a) 30.00 6.00 24.00 4
</TABLE>

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

Effective April 30, 1997, fees on Cash Reserve and Flexible Savings
Certificates are paid at a rate of 0.20% of the purchase price at the time of
issuance and 0.20% of the reserves maintained for these certificates at the
beginning of the second and subsequent quarters from issue date. For
certificates sold prior to April 30, 1997, fees were paid at a rate of 0.25% of
the purchase price at the time of issuance and are paid at the rate of 0.25% of
the reserves maintained for these certificates at the beginning of the second
and subsequent quarters from issue date.

Fees on the Future Value Certificate were paid at the rate of 5% of the
purchase price at time of issuance. Effective May 1, 1997, the Future Value
Certificate is no longer being offered for sale.

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.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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.

Effective April 30, 1997, fees on the IDS and American Express Stock Market
Certificates are paid at the rate of 0.70% of the purchase price on the first
day of the certificate's term and 0.70% of the reserves maintained for these
certificates at the beginning of each subsequent term. For certificates sold
prior to April 30, 1997, fees were paid at a rate of 1.25% of the purchase price
on the first day of the certificate's term and are paid at a rate of 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:

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

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.

D) The basis for computing fees paid or payable to American Express Bank Ltd.
(an affiliate) for the distribution of the American Express 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.

E) The basis of computing transfer agent fees paid or payable to American
Express Client Service Corporation (AECSC) (an affiliate) is:

Under a Transfer Agency Agreement effective Jan. 1, 1998, AECSC will
maintain certificate owner accounts and records. IDSC will pay AECSC a monthly
fee of one-twelfth of $10.353 per certificate owner account.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

8. Income taxes

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

1997 1996 1995
Federal:
Current $1,138 $5,560 $6,285
Deferred 2,266 1,124 2,652
3,404 6,684 8,937
State (65) (27) 43

Total income tax benefit $3,339 $6,657 $8,980

Income tax benefit (expense) 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:
1997 1996 1995

Federal tax expense at U.S. statutory rate ($8,378) ($5,711) ($6,307)
Tax-exempt interest 724 1,517 3,339
Dividend exclusion 11,044 10,865 12,166
Other, net 14 13 (261)

Federal tax benefit $3,404 $6,684 $8,937

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.

Deferred tax assets: 1997 1996
Certificate reserves $13,488 $13,028
Investment reserves 502 540
Other, net 19 19

Total deferred tax assets $14,009 $13,587

Deferred tax liabilities: 1997 1996

Deferred distribution fees $7,382 $8,934
Investment unrealized gains 17,119 7,775
Purchased/written call options 3,557 3,429
Dividends receivable 654 745
Investments 429 714
Return of capital dividends 43 87

Total deferred tax liabilities $29,184 $21,684

Net deferred tax liabilities $15,175 $8,097
<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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 and equity price 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 risk is the possibility that the counterparty will not fulfill the
terms of the contract. IDSC monitors credit risk 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, 1997, IDSC's counterparties to the
interest rate floors and swaps are rated A or better by nationally recognized
rating agencies. The counterparties to the purchased 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 or credit risk
and are not recorded on the balance sheet.

Credit risk 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, 1997 and 1996.
1997
Notional Total
or contract Carrying Fair credit
amount value value risk

Assets:

Interest rate floors $500,000 $205 $251 $251
Purchased call options 389 55,922 54,609 54,609
Total $500,389 $56,127 $54,860 $54,860

Liabilities:

Interest rate swaps $1,000,000 $416 $2,138 $-
Written call options 376 24,739 32,990 -
Total $1,000,376 $25,155 $35,128 $-
<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

1996

Notional Total
or contract Carrying Fair credit
amount value value risk
Assets:

Interest rate caps and corridors $200,000 $- $188 $188
Purchased call options 362 36,164 34,987 34,987
Total $200,362 $36,164 $35,175 $35,175

Liabilities:

Written call options $337 $9,552 $17,571 $-

The fair values of derivative financial instruments are based on market
values, dealer quotes or pricing models. The interest rate floors expire in
April of 1999 and $500,000 notional amount of the interest rate swaps expires in
May of 1998 and $500,000 expire in April of 1999. The options expire throughout
1998.

Interest rate caps, corridors, floors and swaps, 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 earned on investments and
the interest rate credited to related investment certificate owners.

The interest rate floors are reset monthly and IDSC earns interest on the
notional amount to the extent the U.S. Treasury securities at "constant
maturity" for a period of one year exceed the reference rates specified in the
floor agreements. These reference rates range from 4.6% to 4.7%. The cost of
interest rate floors 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.

The interest rate caps and corridors were reset quarterly and IDSC earned
interest on the notional amount to the extent the London Interbank Offering Rate
exceeded the reference rates specified in the cap and corridor agreements. These
reference rates ranged from 4% to 9%. The cost of interest rate caps and
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.

The interest rate swaps are reset monthly. IDSC pays a fixed rate on the
notional amount ranging from 5.46% to 6.72% and receives a floating rate on the
notional amount tied to the U.S. Treasury securities at "constant maturity" for
a period of one year. There is no cost carried on the balance sheet. The
carrying amount shown above represents the net interest receivable/payable under
the swap agreements. Interest earned and interest expensed under the agreements
is shown net in investment expenses.

<PAGE>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

IDSC offers a series of certificates which pays 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 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.

Each purchased (written) call option contract confers upon the holder the
right (obligation) to receive (pay) an amount equal to one hundred dollars times
the difference between the level of the major stock market index on the date the
call option is exercised and the strike price of the option.

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, 1997 and 1996.

1997

Contract Average Index at
amount strike price Dec.31,1997

Purchased call options $389 876 970
Written call options 376 969 970

1996

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

Purchased call options $362 669 741
Written call options 337 736 741

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>

Notes to Financial Statements ($ in thousands unless indicated otherwise)

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

1997 1996

Carrying Fair Carrying Fair
value value value value

<S> <C> <C> <C> <C>
Financial assets:

Assets for which carrying values

approximate fair values $49,940 $49,940 $155,396 $155,396
Investment securities (note 3) 3,669,667 3,695,839 3,076,889 3,103,005
First mortgage loans on real estate (note 4) 212,433 216,951 218,697 221,253
Derivative financial instruments (note 9) 56,127 54,860 36,164 35,175

Financial liabilities:
Liabilities for which carrying values

approximate fair values 48,255 48,255 76,040 76,040
Certificate reserves (note 5) 3,688,351 3,700,757 3,240,428 3,266,844
Derivative financial instruments (note 9) 25,155 35,128 9,552 17,571
</TABLE>

11. Year 2000 issue (Unaudited)

<PAGE>
American Express Investors Certificate (for selected investors)
Prospectus
April 29, 1998

Provides high fixed rates with capital preservation.

American Express Investors Certificates are issued by IDS Certificate Company
(the Issuer or IDSC). The American Express Investors Certificate is a security
purchased with a single investment. You may purchase this certificate by
selecting a term of one, two, three, six, 12, 24 or 36 months, and an initial
investment of at least $100,000 but not more than $5 million (unless you receive
prior authorization from the Issuer to invest more), exclusive of interest.
However, this prospectus is designed for selected persons who, with
authorization of the Issuer, plan to invest at least $50 million in certain
combinations of these certificates. Unless you plan to invest at least $50
million in total with at least $5 million (exclusive of interest) for a term of
12 months or longer, you should discuss with your relationship manager whether
this is the right prospectus for you. Your principal and interest are guaranteed
by the Issuer. The Issuer guarantees a fixed rate of interest depending upon the
term you select. 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."

This prospectus describes terms and conditions of your American Express
Investors 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 American Express Investors Certificate as described
in the prospectus, or to bind the Issuer by any statement not in it.
<PAGE>
IDS CERTIFICATE COMPANY IS NOT A BANK OR FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR 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.

Issuer:
IDS Certificate Company
Unit 557
IDS Tower 10
Minneapolis, MN 55440-0010

Distributor:
American Express Financial Advisors Inc.
IDS Tower 10
Minneapolis, MN 55440-0010

Selling Agents:
American Express Bank International
American Express Tower
World Financial Center
New York, NY 10285-2300

Coutts & Co (USA) International
701 Brickell Avenue
23rd Floor
Miami, FL 33131

Where to get information about the Issuer

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

Here are the interest rates in effect on the date of this prospectus, April 29,
1998*:

<TABLE>
<CAPTION>
Actual
Simple Compound Effective
Interest Yield for Annualized
Term Rate* the Term** Yield***
- --------------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
1 month 4.156% 4.156% 4.236%
- --------------------------- -------------------------- -------------------------- --------------------------
- --------------------------- -------------------------- -------------------------- --------------------------

36 month 4.413 4.503 4.503
- --------------------------- -------------------------- -------------------------- --------------------------

* These are the rates for investments of $100,000. Rates may depend on factors described in "Rates
for new purchases" under "About the certificate."
** Assuming monthly compounding for the number of months in the term and a $100,000 purchase.
*** Assuming monthly compounding for 12 months and a $100,000 purchase.
</TABLE>
<PAGE>
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 the Issuer and
may also differ from the rates shown here. See "Rates for new purchases" under
"About the certificate" for further information.

The Issuer reserves the right to issue other securities with different terms.
<PAGE>
Contents

Table of contents

Tax treatment of your investment p
Withholding taxes p
Trusts p

How your money is used and protected p
Invested and guaranteed by the Issuer p
Regulated by government p
Backed by our investments p
Investment policies p

<PAGE>

Appendix p

Annual financial information p
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>
About the certificate

Investment amounts and terms

You may purchase the American Express Investors Certificate with an initial
payment of at least $100,000 payable in U.S. currency. Unless you receive prior
authorization, your total amount paid in any one or more certificates, in the
aggregate over the life of the certificates, less withdrawals, cannot exceed $5
million. Unless you plan to invest at least $50 million in total, with at least
$5 million (exclusive of interest) for a term of 12 months or longer, you should
discuss with your relationship manager whether this is the right prospectus for
you.

Face amount and principal

Principal may change during a term as described in "Full and partial
withdrawals."

Value at maturity

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

The Issuer 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:

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

adding these daily amounts to get a monthly total; and

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.
<PAGE>
Promotions and pricing flexibility

Rates for new purchases

1 month Within a range of 80 basis points below to 20 basis points above the
one-month LIBOR rate.

2 months Within a range of 80 basis points below to 20 basis points above the
one-month LIBOR rate. (A two-month LIBOR rate is not published.)

3 months Within a range of 80 basis points below to 20 basis points above the
three-month LIBOR rate.

6 months Within a range of 80 basis points below to 20 basis points above the
six-month LIBOR rate.

12 months Within a range of 80 basis points below to 20 basis points above the
12-month LIBOR rate.

24 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)

36 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published.)

For investments from $250,000 to $999,999 initial rates for specific terms are
determined as follows:

1 month Within a range of 100 basis points below to zero basis points above
the one-month LIBOR rate.
<PAGE>
2 months Within a range of 100 basis points below to zero basis
points above the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)

3 months Within a range of 100 basis points below to zero basis points above
the three-month LIBOR rate.

6 months Within a range of 100 basis points below to zero basis points above
the six-month LIBOR rate.

12 months Within a range of 100 basis points below to zero basis points above
the 12-month LIBOR rate.

24 months Within a range of 85 basis points below to 15 points above the
12-month LIBOR rate. (A 24-month LIBOR rate is not published.)

36 months Within a range of 85 basis points below to 15 points above the
12-month LIBOR rate. (A 36-month LIBOR rate is not published.)

For investments of $100,000 to $249,999, initial rates for specific terms are
determined as follows:

1 month Within a range of 180 basis points below to 80 basis points below
the one-month LIBOR rate.

2 months Within a range of 180 basis points below to 80 basis
points below the one-month LIBOR rate. (A two-month LIBOR rate
is not published.)

3 months Within a range of 180 basis points below to 80 basis points below the
three-month LIBOR rate.

6 months Within a range of 180 basis points below to 80 basis points below the
six-month LIBOR rate.

12 months Within a range of 180 basis points below to 80 basis points below
the 12-month LIBOR rate.

24 months Within a range of 175 basis points below to 75 basis
points below the 12-month LIBOR rate. (A 24-month LIBOR rate
is not published.)

36 months Within a range of 175 basis points below to 75 basis
points below the 12-month LIBOR rate. (A 36-month LIBOR rate
is not published.)

Additional investments

Earning interest

How to invest and withdraw funds

Buying your certificate

the trust is unconditionally revocable by the grantor or grantors (the
person or persons who put the money into the trust);

there are no more than 10 grantors of the trust;

all the grantors are neither citizens nor residents of the United States;

each grantor provides an appropriately certified Form W-8 (or approved
substitute), as described under "Tax treatment of your investment;"

the trustee of the trust is a bank organized under the laws of the
United States or any state in the United States; and

the trustee supplies IDSC with appropriate tax documentation.

The Issuer has complete discretion to determine whether to accept an
application and sell a certificate.

How to make investments at term end

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 #00-29-882 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.

Minimum amount you may wire: $1,000.

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

Purchases made by wire are accepted by AEFC only from banks located in the
United States.

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

Full and partial withdrawals

You may receive all or part of your money at any time. However:

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

If you request a withdrawal or a series of withdrawals exceeding
$50,000,000 in any 30 day period, the Issuer at its option may, prior to
the maturity of any of these certificates, defer any payment or payments to
the certificate owner for a period of not more than 30 days. If the Issuer
exercises this option, interest will accrue on any such payment or
payments, for the period of deferment, at a rate at least equal to that
applicable to the last term of the certificate.

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.

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.

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

Penalties for early withdrawal during a term:

When you request a full or partial withdrawal, we pay the amount you request:

first from interest credited during the current term;

then from the principal of your certificate.
<PAGE>

Withdrawal penalties: When a penalty applies, a 2% withdrawal penalty will be
deducted from the account's remaining balance.

For example, assume you invest $1 million in a certificate and select a
six-month term. Four months later assume you have earned $27,000 in interest.
The following demonstrates how the withdrawal charge is deducted:

Total investments $ 1,000,000
Interest credited $ 27,000
Total balance $ 1,027,000

Requested check $ 100,000
Credited interest withdrawn $ (27,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,460

Balance prior to withdrawal $ 1,027,000
Requested withdrawal check $ (100,000)
Withdrawal charge $ (1,460)
Total balance after withdrawal $ 925,540

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

Penalty exceptions: The 2% penalty is waived upon death of the certificate
owner.

For more information on withdrawal charges, talk with your AEBI or Coutts
representative.
<PAGE>
When your certificate term ends

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.

For most terms, 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:

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

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 other IDS certificates
available through AEBI or Coutts.
<PAGE>
Transfer of ownership

For more information

Giving instructions and written notification

Your AEBI or Coutts representative will be happy to handle instructions
concerning your account. Written instructions may be provided to either your
representative's office or directly to the Issuer.

Proper written notice to your AEBI or Coutts representative or the Issuer must:

be addressed to your AEBI or Coutts office or the Issuer's corporate
office, in which case it must identify your AEBI or Coutts office,

include your account number and sufficient information for the Issuer to
carry out your request, and

be signed and dated by all registered owners.

The Issuer will acknowledge your written instructions. If your instructions are
incomplete or unclear, you will be contacted for revised instructions.

In the absence of any other written mandate or instructions you have provided to
AEBI or Coutts, you may elect in writing, on your initial or any subsequent
purchase application, to authorize AEBI or Coutts to act upon the sole verbal
instructions of any one of the named owners, and in turn to instruct the Issuer
with regard to any and all actions in connection with the certificate referenced
in the application as it may be modified from time to time by term changes,
renewals, additions or withdrawals. The individual providing verbal instructions
must be a named owner of the certificate involved. In
<PAGE>
providing such authorization you agree that the Issuer, its transfer agent, AEBI
and Coutts will not be liable for any loss, liability, cost or expense arising
in connection with implementing such instructions, reasonably believed by the
Issuer, AEBI or Coutts, or their representatives, to be genuine. You may revoke
such authority at any time by providing proper written notice to your AEBI or
Coutts office.

All amounts payable to or by the Issuer in connection with this certificate are
payable at the Issuer's corporate office unless you are advised otherwise.

Purchases by bank wire

Tax treatment of your investment

Interest paid on your certificate is "portfolio interest" as defined in U.S.
Internal Revenue Code Section 871(h) if earned by a nonresident alien who has
supplied the Issuer with Form W-8, Certificate of Foreign Status. Form W-8 must
be supplied with both a current mailing address and an address of foreign
residency, if different. The Issuer will not accept purchases of certificates by
nonresident aliens without an appropriately certified Form W-8 (or approved
substitute). The Form W-8 must be resupplied every three calendar years. If you
have supplied a Form W-8 that certifies that you are a nonresident alien, the
interest income 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
<PAGE>
Withholding. We are required to attach your Form W-8 to the forms sent to the
Internal Revenue Service (IRS). Your interest income will be reported to the IRS
even though it is not taxed by the U.S. Government. The United States
participates in various tax treaties with foreign countries. Those treaties
provide that tax information may be shared upon request between the United
States and such foreign governments.

Withholding taxes

If you fail to provide a Form W-8 as required above, you will be subject to
backup withholding on interest payments and surrenders.

Estate tax: If you are a nonresident alien and you die while owning a
certificate, then, depending on the circumstances, the Issuer generally will not
act on instructions with regard to the certificate unless the Issuer first
receives, at a minimum, a statement from persons the Issuer believes are
knowledgeable about your estate. The statement must be in a form satisfactory to
the Issuer 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 the
Issuer 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.

Trusts

If the investor is a trust described in "Buying your certificate" under "How to
invest and withdraw funds," the policies and procedures described above will
apply with regard to each grantor.

How your money is used and protected

Invested and guaranteed by the Issuer

The American Express Investors Certificate is issued and guaranteed by the
Issuer, a wholly owned subsidiary of American Express Financial Corporation
(AEFC). We are by far the largest issuer of face amount certificates in the
United States, with total assets of more than $4.0 billion and a net worth in
excess of $239 million on Dec. 31, 1997.
<PAGE>
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:

interest to certificate owners; and

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.

Regulated by government

The Issuer's investments are varied and of high quality. This was the
composition of our portfolio as of Dec. 31, 1997:

Type of investment Net amount invested

Corporate and other bonds 43%
Government agency bonds 34
Preferred stocks 17
Mortgages 5
Municipal bonds 1

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."

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
<PAGE>
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 Corporation. 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, 1997, IDSC held about 9% of its investment portfolio (including
bonds, preferred stocks and mortgages) in investments rated below investment
grade.

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.

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. We expect that investments in real estate, either directly or through a
subsidiary of IDSC, will be less than 5 percent of IDSC's assets.
<PAGE>
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. We
expect that outstanding securities loans will not exceed 10 percent of IDSC's
assets.

How your money is managed

Relationship between the Issuer and American Express Financial Corporation

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

international banking services (through American Express Bank Ltd. and
its subsidiaries including American Express Bank International).
<PAGE>
Capital structure and certificates issued

The Issuer 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.

Investment management and services

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

providing investment research;

making specific investment recommendations; and

executing purchase and sale orders according to our policy of obtaining
the best price and execution.

Advisory and services fee computation:

Included assets Percentage of total book value

First $250 million 0.750%
Next 250 million 0.650
Next 250 million 0.550
Next 250 million 0.500
Any amount over 1 billion 0.107

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

<PAGE>
Advisory and services fee for the past three years:

Percentage of
Year Total fees included assets
1997 $17,232,602 0.50%
1996 16,989,093 0.50
1995 16,472,458 0.50

Estimated advisory and services fees for 1998 are $9,361,000.

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

costs incurred by us in connection with real estate and mortgages;

taxes;

depository and custodian fees;

brokerage commissions;

fees and expenses of our directors who are not officers or employees
of AEFC;

provision for certificate reserves (interest accrued on certificate
owner accounts); and

expenses of customer settlements not attributable to sales function.

Distribution

Under a Distribution Agreement with American Express Financial Advisors Inc.,
the Issuer pays an annualized fee equal to 1% of the amount outstanding for the
distribution of this certificate. Payments are made at the end of each term on
certificates with a one-, two- or three-month term. Payments are made each
quarter from issuance date on certificates with a six-, 12-, 24- or 36-month
term.
<PAGE>

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

the aggregate reserve balance for that certificate, and any other
certificate with identical ownership and an amount outstanding of $1
million or more, is at least $20 million;

the aggregate reserve balance is invested for terms that average at
least six months; and

at least $5 million of this aggregate reserve balance is invested for a
term of 12 months or longer.

These fees are not assessed to your certificate account.

About AEBI and Coutts

Coutts is an Edge Act corporation organized under the provisions of Section
25(a) of the Federal Reserve Act. It is an indirect wholly owned subsidiary of
National Westminster Bank PLC. As an Edge Act corporation, Coutts is subject to
the provisions of Section 25(a) of the Federal Reserve Act and Regulation K of
the Board of Governors of the Federal Reserve System (the Federal Reserve). It
is supervised and regulated by the Federal Reserve.

Transfer Agent

<PAGE>
Employment of other American Express affiliates

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

we receive prices and executions at least as favorable as those offered
by qualified independent brokers performing similar services;

the affiliate charges us commissions consistent with those charged to
comparable unaffiliated customers for similar transactions; and

the affiliate's employment is consistent with the terms of the current
Investment Advisory and Services Agreement and federal securities laws.

Directors and officers

The Issuer'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 $38,000 during 1997 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.

Richard W. Kling*
Born in 1940. Director since 1996.
Chairman of the board of directors since 1996. Director of IDS Life Insurance
Company since 1984; president since 1994. Executive vice president of Marketing
and Products of AEFC from 1988 to 1994. Senior vice president of AEFC since
1994. Director of IDS Life Series Fund, Inc. and member of the board of managers
of IDS Life Variable Annuity Funds A and B.
<PAGE>
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.

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.

*"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.
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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.