SUPPLEMENT TO THE
DAILY TAX-EXEMPT MONEY FUND
PROSPECTUS
DATED DECEMBER 20, 1995
The following information replaces the fourth paragraph under the heading
"Other Expenses" in the "Breakdown of Expenses" section, on page P-9
until December 31, 1996:
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. The Plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of shares of the fund. The Board of Trustees has
authorized FMR to pay FDC a distribution fee from its management fee
revenue, past profits or other resources, at an annual rate of up to 0.38%
of the fund's average net assets for payments made to investment
professionals based on average aggregate balances maintained, and, in
special circumstances, up to 0.40% of the fund's average net assets. This
additional 0.02% will be paid to investment professionals who maintain
assets in excess of $600 million in a single omnibus account.
For the fiscal year ended October 31, 1995, FMR paid FDC monthly at an
annual rate of 0.26% of the fund's average net assets throughout the month.
Effective September 30, 1996, the following information replaces the
similar information in the "How to Buy Shares" section on page P-10:
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Effective January 1, 1997, the following information replaces the fourth
paragraph under the heading "Other Expenses" in the "Breakdown of Expenses"
section, on page P-9:
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. The Plan
recognizes that FMR will make payments out of its resources, including
management fees, to pay or reimburse FDC for payments made to third
parties, such as banks or broker-dealers, for their services in connection
with the distribution and servicing of shares of the fund. Pursuant to the
Plan, the Board of Trustees has authorized FDC to compensate third parties
who maintain an average monthly balance of $10 million or more in a single
omnibus account at an annual rate of 0.40% of average net assets
maintained, and to compensate all other third parties who maintain
aggregate assets of $50,000 or more at an annual rate of 0.25% of average
net assets maintained.
Third parties that were compensated at amounts exceeding 0.25% under the
schedule in effect prior to January 1, 1997 that do not yet maintain
omnibus accounts may be compensated at the prior compensation rates for up
to one year from January 1, 1997.
