FIDELITY NEWBURY STREET TRUST, 485APOS, 1997-10-30

FIDELITY NEWBURY STREET TRUST
485APOS, 1997-10-30

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-78458)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 34 [X]
and
REGISTRATION STATEMENT (No. 811-3518)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 34 [X]
Newbury Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(X) on December 30, 1997 pursuant to paragraph (a)(1) of Rule 485
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed
post-effective amendment.
PRIME FUND - DAILY MONEY CLASS
TREASURY FUND - DAILY MONEY CLASS
TAX-EXEMPT FUND - DAILY MONEY CLASS
NEWBURY STREET TRUST

CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a *
b *
c Performance
d Performance
4 a(i) Charter
(ii) Investment Principles and Risks; Securities and Investment
Practices
b Securities and Investment Practices
c Who May Want To Invest; Investment Principles and Risks;
Securities and Investment Practices
5 a Charter
b(i) Cover Page; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses
c,d Cover Page; Charter; Breakdown of
Expenses; FMR and Its Affiliates
e Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Transaction Details;
Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions; Transaction Details
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor
Services; Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
7 a Charter; Cover Page
b How to Buy Shares; Transaction Details;Expenses
c *
d How to Buy Shares
e *
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details;
Exchange Restrictions
9 *

PRIME FUND - DAILY MONEY CLASS
TREASURY FUND - DAILY MONEY CLASS
TAX-EXEMPT FUND - DAILY MONEY CLASS
NEWBURY STREET TRUST

CROSS REFERENCE SHEET
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contracts
c *
d Management Contracts
e *
f Distribution and Service Plans
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plans
a(iii),b,c *
22 Performance
23 *
*Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated
December 30, 1997. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials, for reference on the SEC's Internet Web Site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of any of
these documents, call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
DMFI-pro-1297
Prime Fund and Treasury each seek to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
PRIME FUND -
DAILY MONEY
CLASS
(FUND NUMBER 083)
TREASURY FUND
- -DAILY MONEY
CLASS
(FUND NUMBER 058)
TAX-EXEMPT
FUND - DAILY
MONEY CLASS
(FUND NUMBER 084)

Tax-Exempt Fund seeks to obtain as high a level of current income,
exempt from federal income taxes, as is consistent with a portfolio of
high quality, short-term municipal obligations selected on the basis
of liquidity and stability of principal.
PROSPECTUS
DECEMBER 30, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS

KEY FACTS WHO MAY WANT TO INVEST

EXPENSES DAILY MONEY CLASS'S YEARLY
OPERATING EXPENSES.

FINANCIAL HIGHLIGHTS A SUMMARY OF
EACH FUND'S FINANCIAL DATA.

PERFORMANCE HOW EACH FUND HAS DONE
OVER TIME.

THE FUNDS IN DETAIL CHARTER HOW EACH FUND IS ORGANIZED.

INVESTMENT PRINCIPLES AND RISKS EACH
FUND'S OVERALL APPROACH TO INVESTING.

BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND WHAT
THEY INCLUDE.

YOUR ACCOUNT TYPES OF ACCOUNTS DIFFERENT WAYS TO
SET UP YOUR ACCOUNT, INCLUDING
TAX-SHELTERED RETIREMENT PLANS.

HOW TO BUY SHARES OPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.

HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.

INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.

SHAREHOLDER AND ACCOUNT DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES

TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF PURCHASES
AND REDEMPTIONS.

EXCHANGE RESTRICTIONS

KEY FACTS

WHO MAY WANT TO INVEST
Each fund offers individual and institutional investors a convenient
way to invest in professionally managed portfolios of money market
instruments.
Prime Fund and Treasury Fund are designed for investors who would like
to earn current income while preserving the value of their investment.
Tax-Exempt Fund is designed for investors who would like to earn
federally tax-exempt income at current money market rates while
preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury
Fund offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a
portion of your investments. Each fund (except for Treasury Fund -
Advisor B Class and Advisor C Class) offers free checkwriting to give
you easy access to your money.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio. Each
fund offers Daily Money Class shares and Capital Reserves Class
shares. Treasury Fund also offers Advisor B Class (Class B) shares and
Advisor C Class (Class C) shares. Daily Money Class and Capital
Reserves Class shares do not have a sales charge, but do pay a 12b-1
fee. Class B and Class C shares do not have a front-end sales charge,
but do have a contingent deferred sales charge (CDSC), and pay a 12b-1
fee. Class B and Class C shares may be purchased directly only in
connection with the Fidelity Advisor Systematic Exchange Program (the
Program) for purposes of exchanging into Class B or Class C shares, as
applicable, of the Fidelity Advisor funds. You may obtain more
information about Capital Reserves Class shares, Class B shares and
Class C shares, which are not offered through this prospectus, from
your investment professional or by calling Fidelity Client Services at
1-800-843-300 1.
The performance of one class of shares of a fund may be different
from the performance of another class of shares of the same fund
because of different sales charges and class expenses. Contact your
investment professional to discuss which class is appropriate for
you.
In determining which class of shares is appropriate for you, you
should consider, among other factors, the amount you plan to invest,
the length of time you intend to hold your shares, and the package of
services provided to you by your investment professional and the
overall costs of those services.
In general, Daily Money Class shares have lower costs than Capital
Reserves Class, Class B and Class C shares because Daily Money Class
shares do not have a sales charge and have lower 12b-1 fees. Class B
shares have higher costs than Class C shares over a short holding
period because Class B shares have a higher CDSC that declines over
six years, and Class B shares have lower costs than Class C shares
over a longer period because Class B shares convert to Daily Money
Class shares after seven years. If you sell your Class B shares within
six years, you will normally pay a CDSC that varies depending on how
long you have held your shares. If you sell your Class C shares within
one year, you will normally pay a 1.00% CDSC. Class C shares do not
convert to another class of shares. Please note that purchase amounts
of more than $250,000 will not be accepted for Class B shares and
purchase amounts of more than $1,000,000 will not be accepted for
Class C shares.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Daily Money Class shares of a fund.
SALES CHARGE ON PURCHASES AND NONE
REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE ON REDEMPTIONS NONE

REDEMPTION FEE NONE

EXCHANGE FEE NONE

ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR). Each fund also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements
and financial reports.
12b-1 fees are paid by the Daily Money Class of each fund to the
distributor for services and expenses in connection with the
distribution of Daily Money Class shares of each fund.
Each class's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown
of Expenses" on page ).
The following figures are based on historical expenses, adjusted to
reflect current fees, of Daily Money Class of each fund and are
calculated as a percentage of average net assets of Daily Money Class
of each fundA portion of the brokerage commissions that a fund pays is
used to reduce that fund's expenses. In addition, each fund has
entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total Daily Money Class operating expenses presented
in the table would have been ______% for Prime Fund, ______% for
Treasury Fund and _____% for Tax-Exempt Fund.
PRIME FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

TREASURY FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

TAX-EXEMPT FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

* The management fees rate represents the net rate retained by FMR
after payments made to the distributor and reimbursement of certain
other expenses. The management fee rate before payments made to the
distributor and reimbursement of certain other expenses by FMR is
___%.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Daily Money Class shares of a fund,
assuming a 5% annual return and full redemption at the end of each
time period. Total expenses shown below include any shareholder
transaction expenses and Daily Money Class's annual operating
expenses.
1 YEAR 3 YEARS 5 YEARS 10 YEARS

PRIME FUND $ $ $ $

TREASURY FUND $ $ $ $

TAX-EXEMPT FUND--- $ $ $ $

THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
: FMR has voluntarily agreed to reimburse Daily Money Class of each
fund to the extent that total operating expenses (as a percentage of
its respective average net assets) exceed 0.65% of its average net
assets. If these agreements were not in effect, the other expenses and
total operating expenses, as a percentage of average net assets, of
Daily Money Class of each fund would have been, ______% for Prime
Fund, ______% for Treasury Fund and _______% for Tax-Exempt Fund.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Prime Fund and
Treasury Fund have been audited by ___________, independent
accountants. The financial highlights table that follows for
Tax-Exempt Fund has been audited by ____________, independent
accountants. The funds' financial highlights, financial statements,
and reports of the auditors are included in each fund's Annual Report,
and are incorporated by reference into (are legally a part of) the
funds' SAI. Contact Fidelity Client Services (Client Services) or your
investment professional for a free copy of an Annual Report or the
SAI.
[TO BE FILED BY SUBSEQUENT AMENDMENT]
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Newbury Street Trust, an open-end management
investment company organized as a Delaware business trust on December
30, 1991.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee
the funds' activities, review contractual arrangements with companies
that provide services to the funds, and review the funds' performance.
The trustees serve as trustees for other Fidelity funds. The
majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. The transfer agent will mail proxy
materials in advance, including a voting card and information about
the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which handles their business affairs.
FMR Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of October 31, 1997 , FMR advised funds having approximately
______million shareholder accounts with a total value of more than
$______ billion.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for Daily Money Class
shares of Prime Fund and Treasury Fund. UMB Bank, n.a. (UMB) is the
transfer agent for Tax-Exempt Fund and is located at 1010 Grand
Avenue, Kansas City, Missouri. UMB employs FIIOC to perform transfer
agent servicing functions for Daily Money Class shares of
Tax-Exempt Fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members
of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940
Act to form a controlling group with respect to FMR Corp.
As of _______,approximately ____%, ____% and ____% of Daily Money
Fund of each fund's total outstanding shares, respectively, were held
by FMR and an FMR affiliate.
As of _________, approximately ____%, ____% and ___% of Daily Money
Class of each fund's total outstanding shares were held by ______;
approximately ___% of the Daily Money Class of each fund's total
outstanding shares were held by __________; and approximately ___% of
the Daily Money Class of each fund's total outstanding shares were
held by ___________.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
PRIME FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. dollar-denominated money market
securities of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, U.S.
Government securities, and repurchase agreements. The fund also may
enter into reverse repurchase agreements.
TREASURY FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase
agreements for these securities. The fund does not enter into reverse
repurchase agreements.
TAX-EXEMPT FUND seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality,
short-term municipal obligations selected on the basis of liquidity
and stability of principal.
The fund invests in high-quality municipal money market securities of
all types. The fund normally invests so that at least 80% of its
income distributions is exempt from federal income tax. The fund does
not currently intend to purchase municipal securities whose interest
is subject to the federal alternative minimum tax.
FMR normally invests Tax-Exempt Fund's assets according to its
investment strategy and does not expect to invest in federally taxable
obligations. Tax-Exempt Fund also reserves the right to hold a
substantial amount of uninvested cash or to invest more than normally
permitted in federally taxable obligations for temporary, defensive
purposes.
The funds earn income at current money market rates. Each fund
stresses preservation of capital, liquidity, and income (tax-free
income in the case of Tax-Exempt Fund) and does not seek the higher
yields or capital appreciation that more aggressive investments may
provide. Each fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market
conditions.
Prime Fund, Treasury Fund and Tax-Exempt Fund comply with
industry-standard requirements on the quality, maturity, and
diversification of their investments, which are designed to help
maintain a stable $1.00 share price. Of course, there is no guarantee
that the funds will maintain a stable $1.00 share price. The funds
will purchase only high-quality securities that FMR believes present
minimal credit risks and will observe maturity restrictions on
securities they buy. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and
the value of your investment) to change.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings are detailed in each fund's financial
reports, which are sent to shareholders twice a year. For a free SAI
or financial report, call Fidelity Client Services at 1-800-843-3001
or your investment professional.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
municipalities, local and state governments, and other entities.
These securities may carry fixed, variable, or floating interest
rates. Some money market securities employ a trust or similar
structure to modify the maturity, price characteristics, or quality of
financial assets so that they are eligible investments for money
market funds. If the structure does not perform as intended, adverse
tax or investment consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments issued or guaranteed by the U.S. Treasury or by an agency
or instrumentality of the U.S. Government. Not all U.S. Government
securities are backed by the full faith and credit of the United
States. For example, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the
entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Likewise, securities for which
foreign entities provide credit or liquidity support may involve
different risks than those supported by domestic entities. Extensive
public information about the foreign entity may not be available, and
unfavorable political, economic, or governmental developments in the
foreign country involved could affect the repayment of principal or
payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are
trading practices in which payment and delivery for the security take
place at a later date than is customary for that type of security.
The market value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Prime Fund will invest more than 25% of its total assets
in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Tax-Exempt Fund will not invest in a money market fund
and does not currently intend to invest in repurchase agreements.
Treasury Fund and Prime Fund do not currently intend to invest in a
money market fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one industry
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: Prime Fund may not invest more than 5% of its total
assets in any one issuer, except that it may invest up to 25% of its
total assets in the highest quality securities of a single issuer for
up to three business days.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Fund may invest more than 25% of its total assets in
tax-free securities that finance similar types of projects.
BORROWING.A fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Prime Fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an
amount exceeding 331/3% of its total assets. Each of Treasury Fund and
Tax-Exempt Fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
LENDING A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets. Treasury Fund and Tax-Exempt Fund do not lend
money to other funds advised by FMR.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
Each of Prime Fund and Treasury Fund seeks to obtain as high a level
of current income as is consistent with the preservation of capital
and liquidity.
Tax-Exempt Fund seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality,
short-term municipal obligations selected on the basis of liquidity
and stability of principal. The fund normally invests so that at least
80% of its income distributions is free from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer. This
limitation does not apply to U.S. Government Securities or to
securities of other investment companies.
Prime Fund will invest more than 25% of its total assets in the
financial services industry.
Prime Fund may borrow only for temporary or emergency purposes, or
engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Tax-Exempt Fund may borrow only
for temporary or emergency purposes, but not in an amount exceeding
331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in
that class's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to an affiliate who
provides assistance with these services. Each fund also pays OTHER
EXPENSES, which are explained on page ___.
FMR may, from time to time, agree to reimburse each fund's for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by the fund if expenses fall below
the specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each
fund pays a fee at an annual rate of 0.25% of its average net assets.
FMR Texas is the funds' sub-advisor and has primary responsibility for
managing their investments. FMR is responsible for providing other
management services. FMR pays FMR Texas 50% of its management fee
(before expense reimbursements) for FMR Texas's services. FMR paid
FMR Texas fees equal to _______% of Prime Fund's, ________% of
Treasury Fund's and _______% of Tax-Exempt Fund's average net assets
for the fiscal year ended October 31, 1997.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Daily Money Class of Prime Fund and
Treasury Fund (the Taxable Funds). Fidelity Service Company, Inc.
(FSC) calculates the net asset value per share (NAV) and dividends for
Daily Money Class of each Taxable Fund and maintains the
general accounting records for each Taxable Fund.
For the fiscal year ended October 31, 1997, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) amounted to the following. These amounts are before expense
reductions, if any.
TRANSFER PRICING AND
AGENCY FEES
BOOKKEEPING
PAID DAILY FEES PAID BY
MONEY CLASS FUND

PRIME FUND % %

TREASURY FUND % %

UMB is the transfer and service agent for Tax-Exempt Fund. UMB has
entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for
Daily Money Class of Tax-Exempt Fund. UMB has also entered into a
sub-agreement with FSC. FSC calculates the NAV and dividends for Daily
Money Class of Tax-Exempt Fund and maintains the general accounting
records for Tax-Exempt Fund. Under the terms of the sub-agreements,
FIIOC and FSC receive all related fees paid to UMB by Daily Money
Class of Tax-Exempt Fund.
For the fiscal year ended October 31, 1997, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) amounted to the following. These amounts are before expense
reductions, if any.
TRANSFER PRICING AND
AGENCY FEES
BOOKKEEPING
PAID BY THE
FEES PAID BY
DAILY MONEY FUND
CLASS

TAX-EXEMPT FUND % %

Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Daily Money Class of each fund has adopted a DISTRIBUTION AND SERVICE
PLAN. Under the plans, Daily Money Class of each fund is authorized to
pay FDC a monthly distribution fee as compensation for its services
and expenses in connection with the distribution of Daily Money Class
shares. Daily Money Class of each fund currently pays FDC a monthly
distribution fee at an annual rate of 0.25% of its average net assets
throughout the month.
FDC may compensate intermediaries that provide shareholder support
services, engage in the sale of Daily Money Class shares or to pay
distribution expenses at an annual rate of up to 0.25% of average net
assets they maintain.
The Daily Money Class plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Daily Money Class shares, including payments made to
intermediaries that provide shareholder support services or engage in
the sale of Daily Money Class shares. Currently, the Board of Trustees
of each fund has authorized such payments to intermediaries at an
annual rate of up to 0.10% of the average net assets they
maintain.
Independent of the Daily Money Class plans, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of
the average net assets they maintain. The recordkeeping fee will be
paid by FMR or its affiliates, not by the fund, and will not be paid
for distribution services.
YOUR ACCOUNT

TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed at the right.
The account guidelines that follow may not apply to certain funds or
to certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing
through a retirement account or if your employer offers a fund through
a retirement program, you may be subject to additional fees. For more
information, please refer to your program materials, contact your
employer, or call your retirement benefits number or Client Service at
1-800-843-3001 or your invest professional directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE
FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of
legal age and under 70 1/2(checkmark)(solid club) with earned income
to invest up to $2,000 per tax year. Individuals can also invest in a
spouse's IRA if the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 4 01(K) PLANS allow employees of corporations of all
sizes to contribute a percentage of their wages on a tax-deferred
basis. These accounts need to be established by the trustee of the
plan.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employed income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employed income (and their eligible employees) with many of
the advantages of a 401(k) plan, but with fewer administrative
requirements.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA). Contact your
investment professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Contact your investment professional.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each class is the class's net asset
value per share (NAV). Each fund is managed to keep its NAV stable at
$1.00.
Your shares will be purchased at the next NAV calculated after your
order is received and accepted. Each class's NAV is normally
calculated each business day at 4:00 p.m Eastern time.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Share certificates are not available for Daily Money Class shares.
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
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Class A or
Class T of a Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional.
BY MAIL. You or your investment professional must send a check payable
to the fund in which you plan to invest. When making subsequent
investments by check, please write your fund account number on the
check. All investments by check should be sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For
wiring information and instructions, you should call the investment
professional through which you trade or if you trade directly through
Fidelity, call Fidelity Client Services. There is no fee imposed by
the funds for wire purchases. However, if you buy shares through an
investment professional, the investment professional may impose a fee
for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received and accepted by the transfer agent at the
applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on the day of purchase except for Automated
Purchase Orders.
You are advised to wire funds as early in the day as possible. and to
provide advance notice to Fidelity Client Services for large
purchases.
AUTOMATED PURCHASE ORDERS. You may purchase shares through
investment professionals utilizing an automated order placement and
settlement system that guarantees payment for orders on a specified
date.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $100
Through regular investment plans* $100
MINIMUM BALANCE $500
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $500
*For more information about regular investment plans, please refer to
"Investor Services," page __.
There is no minimum account balance or initial or subsequent
investment minimum for certain retirement accounts funded through
salary deduction, or accounts opened with the proceeds of
distributions from such Fidelity retirement accounts. Refer to the
program materials for details.
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each class is the class's NAV.
Your shares will be sold at the next NAV calculated after your
order is received and accepted. Each class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these [two] pages .
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your
request must be made in writing, except for exchanges to Class A or
Class T shares of a Fidelity Advisor fund or shares of other Fidelity
funds, which can be requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$500 worth of shares in the account to keep it open.
It is the responsibility of your investment professional to transmit
your order to redeem shares to Fidelity before the close of business
on the day you place your order.
BY TELEPHONE. Redemption requests may be made by calling Fidelity
Client Services at 1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to
the address given above. The letter should specify the name of the
fund, the number of shares to be sold, name, account numbers, address,
and should include the additional requirements listed below that apply
to each particular account.

<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS

INDIVIDUAL, JOINT TENANTS, LETTER OF INSTRUCTION SIGNED BY ALL PERSON(S) REQUIRED TO
SOLE PROPRIETORSHIP, CUSTODIAL, (UNIFORM GIFTS OR SIGN FOR THE ACCOUNT EXACTLY AS IT IS REGISTERED,
TRANSFERS TO MINORS ACT), GENERAL PARTNERS ACCOMPANIED BY SIGNATURE GUARANTEE(S).

CORPORATIONS, ASSOCIATIONS LETTER OF INSTRUCTION AND A CORPORATE RESOLUTION, SIGNED
BY PERSON(S) REQUIRED TO SIGN FOR THE ACCOUNT
ACCOMPANIED BY SIGNATURE GUARANTEE(S).

TRUSTS A LETTER OF INSTRUCTION SIGNED BY THE TRUSTEE(S) WITH
SIGNATURE GUARANTEE(S). (IF THE TRUSTEE'S NAME IS NOT
REGISTERED ON THE ACCOUNT, ALSO PROVIDE A COPY OF THE
TRUST DOCUMENT, CERTIFIED WITHIN THE LAST 60 DAYS.)

</TABLE>

If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should call
your investment professional or Fidelity Client Services for further
instructions.
BY WIRE. Redemptions may be made by calling Fidelity Client Services:
Nationwide 1-800-843-3001
You must designate on your account application the U.S. commercial
bank account(s) into which you wish the redemption proceeds to be
deposited. Fidelity Client Services will then notify you that this
feature has been activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should
send a letter of instruction, including a signature guarantee, to
Fidelity Client Services at the address shown on page__.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption
proceeds. However, if you sell shares through an investment
professional, the investment professional may impose a fee for wire
redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire
System to your bank account of record. If your redemption wire request
is received and accepted by the transfer agent by 4:00 p.m. Eastern
time for Prime Fund and Treasury Fund and 12:00 noon Eastern time for
Tax-Exempt Fund, redemption p roceeds will normally be wired on
that day. All other redemption proceeds from redemption wire requests
will normally be wired on the following business day.
A fund reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. The minimum amount for a check is $500. Do not,
however, try to close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through
Friday, 8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly/monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity Client Services at 1-800-843-3001 if you need
additional copies of financial reports, prospectuses or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with Fidelity for institutions that wish to open multiple
accounts (a master account and sub-accounts). You may be required to
enter into a separate agreement with FIIOC. Charges for these
services, if any, will be determined based on the level of services to
be rendered.
One easy way to pursue your financial goals is to invest money
regularly. The funds offer a convenient service that lets you transfer
money between fund accounts, automatically. While regular investment
plans do not guarantee a profit and will not protect you against loss
in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term
financial goals. Certain restrictions apply for retirement accounts.
Call your investment professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND

<TABLE>
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 MONTHLY, QUARTERLY, (SMALL SOLID BULLET) TO ESTABLISH, CALL YOUR
SEMI-ANNUALLY, OR ANNUALLY INVESTMENT PROFESSIONAL AFTER
BOTH ACCOUNTS ARE OPENED.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR
FREQUENCY OF YOUR INVESTMENT,
CONTACT YOUR INVESTMENT
PROFESSIONAL DIRECTLY OR, IF YOU
PURCHASED YOUR SHARES THROUGH
A BROKER-DEALER OR INSURANCE
REPRESENTATIVE, CALL
1-800-522-7297. IF YOU
PURCHASED YOUR SHARES THROUGH
A BANK REPRESENTATIVE, CALL
1-800-843-3001.
(SMALL SOLID BULLET) THE ACCOUNT FROM WHICH THE
EXCHANGES ARE TO BE PROCESSED
MUST HAVE A MINIMUM BALANCE
OF $10,000. THE ACCOUNT INTO
WHICH THE EXCHANGE IS BEING
PROCESSED MUST HAVE A
MINIMUM OF $1,000.
(SMALL SOLID BULLET) BOTH ACCOUNTS MUST HAVE THE
SAME REGISTRATIONS AND TAXPAYER
ID NUMBERS.
(SMALL SOLID BULLET) CALL AT LEAST 2 BUSINESS DAYS
PRIOR TO YOUR NEXT SCHEDULED
EXCHANGE DATE.

</TABLE>

SHAREHOLDER AND ACCOUNT POLICIES

When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action,
a fund may suspend redemption or postpone payment dates. In cases of
suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next
determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV on the
day your account is closed.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as
providing historical account documents, that are beyond the normal
scope of its services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of a fund
for shares of other Fidelity funds.
If you have purchased Daily Money Class shares of a fund in connection
with the Fidelity Advisor funds program, your Daily Money Class shares
may be exchanged only for Class A or Class T shares, as applicable, of
Fidelity Advisor funds or Daily Money Class shares of the other funds
offered through this prospectus. Other shareholders may not exchange
Daily Money Class shares of a fund for Class A or Class T shares of
Fidelity Advisor funds.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 between
8:30 a.m. and 4:00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name, account number, the number of shares to be redeemed,
and the name of the fund to be purchased. Written requests for
exchange should be mailed to Fidelity Client Services at the address
on page __.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Daily Money Class shares
will be redeemed at the next determined NAV after your order is
received and accepted. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are
made available. You should note that, under certain circumstances, a
fund may take up to seven days to make redemption proceeds available
for the exchange purchase of shares of another fund. In addition,
please note the following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage difference between that fund's sales charge and
any sales charge you have already paid in connection with the shares
you are exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or
redemption fees applicable to exchanges out of a fund.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify these
exchange privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
fees of up to 1.00% on purchases, administrative fees of up to
$7.50, a nd redemption fees of up to 1.50% on exchanges. Check each
fund's prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.

TREASURY FUND - ADVISOR B CLASS
NEWBURY STREET TRUST

CROSS REFERENCE SHEET
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c *
d Management Contracts
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plan
a(iii),b,c *
22 Performance
23 *
*Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about a fund and its investments, you can obtain a copy
of a fund's most recent financial report and portfolio listing, or a
copy of the Statement of Additional Information (SAI) dated
December 30, 1997. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials, for reference on the SEC's Internet Web Site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of any of
these documents, call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAINTAIN
A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
DMFI-pro-1297
The fund seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
TREASURY FUND -
ADVISOR B CLASS
(FUND NUMBER 658)
ADVISOR C CLASS
(FUND NUMBER 529)
PROSPECTUS
DECEMBER 30, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS

KEY FACTS WHO MAY WANT TO INVEST

EXPENSES EACH CLASS'S SALES CHARGE
(LOAD) AND ITS YEARLY OPERATING
EXPENSES.

FINANCIAL HIGHLIGHTS A SUMMARY OF THE
FUND'S FINANCIAL DATA.

PERFORMANCE

THE FUND IN DETAIL CHARTER HOW THE FUND IS ORGANIZED.

INVESTMENT PRINCIPLES AND RISKS THE
FUND'S OVERALL APPROACH TO INVESTING.

BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND WHAT
THEY INCLUDE.

YOUR ACCOUNT TYPES OF ACCOUNTS DIFFERENT WAYS TO
SET UP YOUR ACCOUNT, INCLUDING
TAX-SHELTERED RETIREMENT PLANS.

HOW TO BUY SHARES OPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.

HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.

INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.

SHAREHOLDER AND ACCOUNT DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES

TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF PURCHASES
AND REDEMPTIONS.

EXCHANGE RESTRICTIONS

SALES CHARGE REDUCTIONS AND
WAIVERS

KEY FACTS

WHO MAY WANT TO INVEST
The fund offers investors a convenient way to invest in a
professionally managed portfolio of money market instruments.
The fund is designed for investors who would like to earn current
income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
The fund is managed to keep its share price stable at $1.00 and offers
an added measure of safety with its focus on U.S. Treasury securities.
The fund does not constitute a balanced investment plan. However,
because it emphasizes stability, it could be well-suited for a portion
of your investments.
The fund is composed of four classes: Daily Money Class, Capital
Reserves Class, Advisor B Class (Class B) and Advisor C Class (Class
C). All classes of the fund have a common investment objective and
investment portfolio. Daily Money Class and Capital Reserves Class
shares do not have a sales charge, but do pay a 12b-1 fee. Class B and
Class C shares do not have a front-end sales charge, but do have a
contingent deferred sales charge (CDSC), and pay a 12b-1 fee. Class B
and Class C shares may be purchased directly only in connection with
the Fidelity Advisor Systematic Exchange Program (the Program) for
purposes of exchanging into Class B or Class C shares, as
appli cable, of the Fidelity Advisor funds. You may obtain more
information about Daily Money Class shares and Capital Reserves Class
shares, which are not offered through this prospectus, from your
investment professional or by calling Fidelity Client Services at
1-800-843-3001.
The performance of one class of shares of a fund may be different
from the performance of another class of shares of the same fund
because of different sales charges and class expenses. Contact your
investment professional to discuss which class is appropriate for
you.
In determining which class of shares is appropriate for you, you
should consider, among other factors, the amount you plan to invest,
the length of time you intend to hold your shares, and the package of
services provided to you by your investment professional and the
overall costs of those services.
In general, Daily Money Class shares have lower costs than Capital
Reserves Class, Class B and Class C shares because Daily Money Class
shares do not have a sales charge and have lower 12b-1 fees. Class B
shares have higher costs than Class C shares over a short holding
period because Class B shares have a higher CDSC that declines over
six years, and Class B shares have lower costs than Class C shares
over a longer period because Class B shares convert to Daily Money
Class shares after seven years. If you sell your Class B shares within
six years, you will normally pay a CDSC that varies depending on how
long you have held your shares. If you sell your Class C shares within
one year, you will normally pay a 1.00% CDSC. Class C shares do not
convert to another class of shares. See "Transactions Details,"
page___, for CDSC and conversion information. Please note that
purchase amounts of more than $250,000 will not be accepted for Class
B shares and purchase amounts of more than $1,000,000 will not be
accepted for Class C shares.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Class B or Class C shares of the fund. See "Transaction
Details," page ____for an explanation of how and when these charges
apply.
A CDSC is imposed on redemptions of Class B shares according to
the schedule that was in effect when you originally purchased the
Advisor fund Class B shares that you exchanged. A CDSC is imposed on
redemptions of Class C shares only if you redeem Class C shares within
one year of purchase. See"Transaction Details," page _____, for
information about each class's CDSC.

CLASS B CLASS C

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MAXIMUM CDSC (AS A % OF THE LESSER OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS) 5.00A% 1.00B%

</TABLE>

MAXIMUM SALES CHARGE ON NONE NONE
REINVESTED DISTRIBUTIONS

REDEMPTION FEE NONE NONE

EXCHANGE FEE NONE NONE

A DECLINES OVER SIX YEARS FROM 5.00% TO 0%.
B ON CLASS C SHARES REDEEMED WITHIN 1 YEARS OF PURCHASE.
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee to Fidelity Management & Research Company (FMR).
The fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder account statements and
financial reports.
12b-1 fees include a distribution fee and a shareholder service fee.
Distribution fees are paid by each class to the distributor for
services and expenses in connection with the distribution of the
applicable class's shares. Shareholder service fees are paid by each
class to investment professionals for services and expenses incurred
in connection with providing personal service and/or maintenance of
the applicable class's shares. Long-term shareholders may pay more
than the economic equivalent of the maximum sales charges permitted by
the National Association of Securities Dealers, Inc., due to 12b-1
fees.
Each class 's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown
of Expenses" on page ).
The following figures are based on estimated or historical expenses,
of Class B and Class C of Treasury Fund and are calculated as a
percentage of average net assets of the applicable class.

<TABLE>
<CAPTION>
<S> <C> <C>
CLASS B CLASS C

MANAGEMENT FEE [(AFTER REIMBURSEMENT)] % %

12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE) % %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] % %

TOTAL OPERATING EXPENSES % %

</TABLE>

EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Class B shares of the fund,
assuming a 5% annual return and either (1) full redemption or (2) no
redemption, at the end of each time period. Total expenses shown below
include your shareholder transaction expenses, such as the maximum
CDSC, and Class B's annual operating expenses.
If you purchased Class B shares directly in connection with the
Program or by exchange from a Fidelity Advisor equity or long-term
bond fund.
1 YEARA 3 YEARSA 5 YEARSA 10
YEARSB

(1) (2) (1) (2) (1) (2) (1) (2)

CLASS B $ $ $ $ $ $ $ $

A REFLECTS DEDUCTION OF APPLICABLE CDSC.
B REFLECTS CONVERSION TO DAILY MONEY CLASS AFTER SEVEN YEARS.
If you purchased Class B shares by exchange from a Fidelity Advisor
intermediate-term bond fund.
1 YEARA 3 YEARSA 5 YEARSA 10
YEARSB

(1) (2) (1) (2) (1) (2) (1) (2)

CLASS B $ $ $ $ $ $ $ $

A REFLECTS DEDUCTION OF APPLICABLE CDSC.
B REFLECTS CONVERSION TO DAILY MONEY CLASS AFTER SEVEN YEARS.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Class C shares of the fund,
assuming a 5% annual return and either (1) full redemption or (2) no
redemption, at the end of each time period. Total expenses shown below
include your shareholder transaction expenses, such as the maximum
CDSC, and Class C's annual operating expenses.
1 YEARA 3 YEARS

(1) (2) (1) (2)

CLASS C $ $ $ $ $

A REFLECTS DEDUCTION OF APPLICABLE CDSC.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class B and Class C to the
extent that total operating expenses exceed 1.40% of Class B's and
1.40% of Class C's average net assets. If these agreements were not in
effect, other expenses and total operating expenses, as a percentage
of average net assets, of Class B of the fund would have been,
_______% and ______%, respectively, and ______% and ______%,
respectively, of Class C of the fund. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions,
and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
_________, independent accountants. The fund's financial highlights,
financial statements, and report of the auditor are included in the
fund's Annual Report, and are incorporated by reference into (are
legally a part of) the fund's SAI. Contact Fidelity Client Services
(Client Services) or your investment professional] for a free copy of
the Annual Report or the SAI. C lass C commenced operations on
_________.
[To be filed by subsequent amendment.]
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations
in performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the
year.
Average annual and cumulative total returns usually will include the
effect of paying the maximum applicable sales charge.
YIELD refers to the income generated by an investment in the fund over
a given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The fund's performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Fidelity Client Services at 1-800-843-3001.
THE FUND IN DETAIL

CHARTER
PRIME FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. The fund is a
diversified fund of Newbury Street Trust, an open-end management
investment company organized as a Delaware business trust on December
30, 1991.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee
the fund's activities, review contractual arrangements with companies
that provide services to the fund, and review the fund's performance.
The trustees serve as trustees for other Fidelity funds. The
majority of trustees are not otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy . The transfer agent will mail proxy
materials in advance, including a voting card and information about
the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The fund employs
various Fidelity companies to perform activities required for its
operation.
The fund is managed by FMR, which handles the fund's business affairs.
FMR Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of O ctober 31, 1997 , FMR advised funds having approximately
__million shareholder accounts with a total value of more than $__
billion.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for each class of the
fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas.
Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of
the voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940
Act to form a controlling group with respect to FMR Corp.
As of ______ approximately ____% of Class B's and ____% of Class' C's
total outstanding shares were held by FMR and an FMR affiliate.
As of _____ approximately ____% of Class B's and ___% of Class C's
total outstanding shares were held by ___________.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the
fund receives services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
Treasury Fund seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase
agreements for these securities. The fund does not enter into reverse
repurchase agreements.
The fund complies with industry-standard requirements on the quality,
maturity, and diversification of its investments, which are designed
to help maintain a stable $1.00 share price. Of course, there is no
guarantee that the fund will maintain a stable $1.00 share price. The
fund will purchase only high-quality securities that FMR believes
present minimal credit risks and will observe maturity restrictions on
securities it buys. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the fund's investments could cause its share price (and the
value of your investment) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and income and does not seek the
higher yields or capital appreciation that more aggressive investments
may provide. The fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market
conditions.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in the
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with the fund's
investment objective and policies and that doing so will help the fund
achieve its goal. Fund holdings are detailed in the fund's financial
reports, which are sent to shareholders twice a year. For a free SAI
or financial report, call your investment professional at
1-800-843-3001.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, the fund may
accept a lower interest rate.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
RESTRICTIONS: The fund does not currently intend to invest in a money
market fund.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR, or through reverse repurchase agreements, and may make
additional investments while borrowings are outstanding.
RESTRICTIONS: The fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraph restates all those that are
fundamental. All policies stated throughout this prospectus, other
than that identified in the following paragraph, can be changed
without shareholder approval.
The fund seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily
operations. Expenses paid out of each class's assets are reflected in
that class's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. The fund also pays OTHER EXPENSES,
which are explained on page ___.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund
pays the fee at the annual rate of 0.25% of its average net assets.
FMR Texas is the fund's sub-adviser and has primary responsibility for
managing its investments. FMR is responsible for providing other
management services. FMR pays FMR Texas 50% of its management fee
(before expense reimbursements) for FMR Texas's services. FMR paid
FMR Texas a fee equal to _____% of Treasury Fund's average net assets
for the fiscal year ended October 31, 1997.
OTHER EXPENSES
While the management fee is a significant component of the fund's
annual operating costs, the fund has other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class B and Class C shares of the fund.
Fidelity Service Company, Inc. (FSC) calculates the net asset value
per share (NAV) and dividends for Class B and Class C and maintains
the fund's general accounting records.
For the fiscal year ended October 31, 1997, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) amounted to the following. These amounts are before expense
reductions, if any.
TRANSFER AGENCY PRICING AND
FEES BOOKKEEPING
PAID BY FEES PAID BY

CLASS B CLASS C FUND

TREASURY FUND % - %

The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Class B shares of Treasury Fund have adopted a DISTRIBUTION AND
SERVICE PLAN. Under the plan, Class B is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class B shares. Class B of
Treasury Fund currently pays FDC a monthly distribution fee at an
annual rate of 0.75% of its average net assets throughout the month.
In addition, pursuant to the Class B plan, Class B pays FDC a monthly
service fee at an annual rate of 0.25% of Class B's average net assets
throughout the month. The full amount of the Class B service fee is
reallowed to investment professionals for providing personal service
to and/or maintenance of Class B shareholder accounts.
The Class B 12b-1 Plan specifically recognizes that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Class B shares, including payments made to investment
professionals that provide shareholder support services or engage in
the sale of Class B shares. Currently, the Board of Trustees of has
authorized such payments.
Class C shares of Treasury Fund have adopted a DISTRIBUTION AND
SERVICE PLAN. Under the plan, Class C is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class C shares. Class C may pay
FDC a distribution fee at an annual rate of 0.75% of its average net
assets, or such lesser amount as the Trustees may determine from time
to time. Class C currently pays FDC a monthly distribution fee at an
annual rate of 0.75% of its average net assets throughout the month.
After the first year of investment, up to the full amount of the Class
C distribution fee may be reallowed to investment professionals as
compensation for their services in connection with the distribution of
Class C shares.
In addition, pursuant to the Class C plan, Class C pays FDC a monthly
service fee at an annual rate of 0.25% of Class C's average net assets
throughout the month. After the first year of investment, the full
amount of the Class C service fee is reallowed to investment
professionals for providing personal services to and/or maintenance of
Class C shareholder accounts.
The Class C 12b-1 Plan specifically recognizes that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Class C shares, including payments made to investment
professionals that provide shareholder support services or engage in
the sale of Class C shares. Currently, the Board of Trustees has
authorized such payments.
YOUR ACCOUNT

TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the fund, such as minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed to the right.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, contact your employer, or call your retirement
benefits number or your investment professional directly, as
appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of
legal age and under 70 1/2 (checkmark)(solid club) with earned income
to invest up to $2,000 per tax year. Individuals can also invest in a
spouse's IRA if the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS allow employees of corporations of all
sizes to contribute a percentage of their wages on a tax-deferred
basis. These accounts need to be established by the trustee of the
plan.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employed income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employed income (and their eligible employees) with many of
the advantages of a 401(k) plan, but with fewer ad ministrative
requirements.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA). Contact your
investment professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Contact your investment professional.
HOW TO BUY SHARES
Class B and Class C shares of the fund may be purchased directly in
connection with the Program or by exchange from Class B or Class C
shares, as applicable, of the Fidelity Advisor funds.
Class B and Class C shares purchased in connection with the Program
must be exchanged into Class B or Class C shares, as applicable, of
Fidelity Advisor funds within 18 months of purchase. For more
information regarding the Program, see "Regular Investment Plans" on
page __.
THE PRICE TO BUY ONE SHARE of Class B or Class C is the class's
net asset value per share (NAV). The fund is managed to keep its NAV
stable at $1.00. Class B and Class C shares are sold without a
front-end sales charge, but may be subject to a CDSC upon redemption.
See "Transaction Details," page __, for informatio n on how the
CDSC is calculated.
Your shares will be purchased at the next NAV calculated after your
order is received and accepted. Each class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Shareholders of record as of 4:00 p.m. Eastern time will be
entitled to divi dends declared that day.
Shares purchased after 4:00 p.m. Eastern time will begin to earn
income dividends on the following business day.
Share certificates are not available for Class B or Class C shares.
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
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from the same
class of a Fidelity Advisor fund, or
(small solid bullet) Contact your investment professional.
BY MAIL. You or your investment professional must send a check payable
to Newbury Street Trust: Treasury Fund Advisor B Class or Advisor C
Class, as applicable. When making subsequent investments by check,
please write your fund account number on the check. All investments by
check should be sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For
wiring information and instructions, you should call the investment
professional through which you trade or if you trade directly through
Fidelity, call Fidelity Client Services. There is no fee imposed by
the fund for wire purchases. However, if you buy shares through an
investment professional, the investment professional may impose a fee
for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received and accepted by the transfer agent at the
applicable fund's designated wire bank before the close of the
Federal Reserve Wire System on the day of purchase.
You are advised to wire funds as early in the day as possible. and to
provide advance notice to Fidelity Client Services for large
purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $1,000
(small solid bullet) Fidelity Advisor IRA, Rollover IRA, SEP-IRA and
Keogh accounts $500
Program account $10,000
TO ADD TO AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $250
(small solid bullet) Fidelity Advisor IRA, Rollover IRA, SEP-IRA and
Keogh accounts $100
Program account None
MINIMUM BALANCE
By Exchange from:
(small solid bullet) Fidelity Advisor fund $500
(small solid bullet) Fidelity Advisor IRA, Rollover IRA, SEP-IRA and
Keogh accounts 100
*For more information about regular investment plans, please refer to
"Investor Services," page __.
PURCHASE AMOUNTS OF MORE THAN $250,000 FOR CLASS B SHARES AND $1
MILLION FOR CLASS C SHARES WILL NOT BE ACCEPTED.
There is no minimum account balance or initial or subsequent
investment minimum for certain retirement accounts funded through
salary deduction, or accounts opened with the proceeds of
distributions from such Fidelity retirement accounts. Refer to the
program materials for details.
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each class is the class's NAV, minus
any applicable CDSC.
Your shares will be sold at the next NAV, minus any applicable
CDSC, calculated after your order is received and accepted. Each
class's NAV is normally calculated each business day at 4:00 p.m.
Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to shares of the same class of a
Fidelity Advisor fund or shares of other Fidelity funds, which can be
requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR NON-RETIREMENT ACCOUNT
SHARES, leave at least $500 worth of shares in the account opened by
exchange from Fidelity Advisor B or C Class, as applicable, to keep it
open.
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service
in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner,
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity Advisor account with a different registration, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Deliver your letter to your investment professional, or mail it to the
following address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, Fidelity will send a check to the record
address.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through
Friday, 8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly/monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
the fund. Call your investment professional or Fidelity Client
Services if you need additional copies of financial reports,
prospectuses or historical account information
EXCHANGE PRIVILEGE. You may sell your Class B or Class C shares and
buy Class B or Class C shares, as applicable, of other Fidelity
Advisor funds by telephone or in writing.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up
periodic redemptions from your Class B or Class C account. Accounts
with a value of $10,000 or more in Class B or Class C shares are
eligible for this program. Aggregate redemptions per 12-month period
from your Class B or Class C account may not exceed 10% of the account
value and are not subject to a CDSC.
One easy way to pursue your financial goals is to invest money
regularly. The fund offers a convenient service that lets you transfer
money between fund accounts, automatically. While regular investment
plans do not guarantee a profit and will not protect you against loss
in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term
financial goals. Certain restrictions apply for retirement accounts.
Call your investment professional for more information
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY ADVISOR
FUND

<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM EXCHANGE AMOUNT FREQUENCY SETTING UP OR CHANGING
$100 MONTHLY, QUARTERLY, (SMALL SOLID BULLET) TO ESTABLISH A PROGRAM ACCOUNT,
SEMI-ANNUALLY, OR ANNUALLY CONTACT FIDELITY CLIENT SERVICES
OR YOUR INVESTMENT
PROFESSIONAL.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR
FREQUENCY OF YOUR INVESTMENT,
CONTACT YOUR INVESTMENT
PROFESSIONAL DIRECTLY OR, IF YOU
PURCHASED YOUR SHARES THROUGH
A BROKER-DEALER OR INSURANCE
REPRESENTATIVE, CALL
1-800-522-7297. IF YOU
PURCHASED YOUR SHARES THROUGH
A BANK REPRESENTATIVE, CALL
1-800-843-3001.
(SMALL SOLID BULLET) THE ACCOUNT INTO WHICH THE
EXCHANGE IS BEING PROCESSED
MUST HAVE A MINIMUM OF
$1,000.
(SMALL SOLID BULLET) CLASS B AND CLASS C SHARES
MUST BE EXCHANGED FOR CLASS B
OR CLASS C SHARES, AS APPLICABLE,
OF A FIDELITY ADVISOR FUND WITHIN
18 MONTHS FROM THE DATE OF
PURCHASE.
(SMALL SOLID BULLET) THE PROGRAM IS NOT
RECOMMENDED FOR PURCHASING
CLASS B S HARES OF FIDELITY
ADVISOR INTERMEDIATE BOND FUND
OR FIDELITY ADVISOR INTERMEDIATE
INCOME FUND BY EXCHANGE
BECAUSE OF THEIR CDSC
SCHEDULES. CONTACT FIDELITY
CLIENT SERVIC ES FOR ADDITIONAL
INFORMATION.
(SMALL SOLID BULLET) BOTH ACCOUNTS MUST HAVE THE
SAME REGISTRATIONS AND TAXPAYER
ID NUMBERS.
(SMALL SOLID BULLET) CALL AT LEAST 2 BUSINESS DAYS
PRIOR TO YOUR NEXT SCHEDULED
EXCHANGE DATE.

</TABLE>

SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Income dividends
are declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and
are normally distributed on the first business day of the following
month. Based on prior approval of the fund, dividends relating to
Class B and Class C shares redeemed during the month can be
distributed on the day of redemption. The fund reserves the right to
limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. Class B and Class C offer two
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
same class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions, if any.
For retirement accounts, all distributions are automatically
reinvested. When you are over 59 years old, you can receive
distributions in cash
Shares purchased through reinvestment of dividend and capital gain
distributions are not subject to a sales charge.
Dividends will be reinvested at the fund's Class B and Class C NAV on
the last day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution. The
mailing of distribution checks will begin within seven days
TAXES
As with any investment, you should consider how your investment in the
fund will be taxed. If your account is not a tax-deferred retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, the fund's income and short-term capital
gain distributions are taxed as dividends; long-term capital gain
distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally
free from state and local income taxes. However, particular states may
limit this benefit, and some types of securities, such as repurchase
agreements and some agency-backed securities, may not qualify for the
benefit. In addition, some states may impose intangible property
taxes. You should consult your own tax adviser for details and
up-to-date information on the tax laws in your state.
For the fiscal year ended October 31, 1997 __ __ % of Prime
Fund's income distributions was derived from interest on U.S.
Government securities which is generally exempt from state income tax.
Every January, Fidelity will send you and the IRS a statement showing
the taxable distributions paid to you in the previous year.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
the fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS and each class's NAV is normally
calculated each day the NYSE is open. The following holiday closings
have been sched uled for 1997 and 1998: Ne w Year's Day, Martin
Luther King's Birthday (in 1998), Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the NYSE may modify its holiday schedule at
any time. On any day that the NYSE closes early, the principal
government securities markets close early (such as on days in advance
of holidays generally observed by participants in such markets), or as
permitted by the SEC, the right is reserved to advance the time on
that day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on
days when the NYSE is closed, each class's NAV may be affected on days
when investors do not have access to the fund to purchase or redeem
shares. Certain Fidelity funds may follow different holiday closing
schedules.
A CLASS'S NAV is the value of a single share. The NAV of each Class is
computed by adding that class's pro rata share of the value of the
applicable fund's investments, cash, and other assets, subtracting
that class's pro rata share of the value of the fund's liabilities,
subtracting the liabilities allocated to that class, and dividing the
result by the number of shares of that class that are outstanding. The
fund values its portfolio securities on the basis of amortized cost.
This method minimizes the effect of changes in a security's market
value and helps the fund maintain a stable $1.00 share price
THE OFFERING PRICE (price to buy one share)is Class B's and Class' C's
NAV. The REDEMPTION PRICE (price to sell one share) is Class B's and
Class C's NAV, minus any applicable CDSC.
CONTINGENT DEFERRED SALES CHARGE. YOUR Class B shares purchased by
exchange retain the CDSC schedule that was in effect when you
originally purchased the Fidelity Advisor fund Class B shares that you
exchanged for Class B shares of the fund.
Class B shares purchased directly in connection with the Program will
be assessed a CDSC based on the following schedule:
FROM DATE OF PURCHASE CONTINGENT DEFERRED
SALES CHARGE

LESS THAN 1 YEAR 5%

1 YEAR TO LESS THAN 2 YEARS 4%

2 YEARS TO LESS THAN 3 YEARS 3%

3 YEARS TO LESS THAN 4 YEARS 3%

4 YEARS TO LESS THAN 5 YEARS 2%

5 YEARS TO LESS THAN 6 YEARS 1%

6 YEARS TO LESS THAN 7 YEARS A 0%

A AFTER A MAXIMUM HOLDING PERIOD OF SEVEN YEARS, CLASS B SHARES WILL
CONVERT AUTOMATICALLY TO DAILY MONEY CLASS SHARES OF THE FUND.
Investment professionals with whom FDC has agreements receive as
compensation from FDC a concession equal to 3.00% of the amount of
your direct purchase of Class B shares.
Class C shares may, upon redemption within one year of purchase, be
assessed a CDSC of 1.00%.
At the time of sale, investment professionals with whom FDC has
agreements receive as compensation from FDC a concession equal to
1.00% of your purchase of Class C shares.
The CDSC will be calculated based on the lesser of the cost of Class B
or Class C shares, as applicable, at the initial date of purchase or
the value of Class B or Class C shares, as applicable, at redemption,
not including any reinvested dividends or capital gains, if any. Class
B or Class C shares acquired through distributions (dividends or
capital gains) will not be subject to a CDSC. In determining the
applicability and rate of any CDSC at redemption, Class B and Class C
shares representing reinvested dividends and capital gains, if any,
will be redeemed first, followed by Class B and Class C shares that
have been held for the longest period of time.
CONVERSION FEATURE. After a maximum holding period of seven years from
the initial date of purchase, Class B shares convert automatically to
Daily Money Class shares of the fund. Conversion to Daily Money Class
shares will be made at NAV. At the time of conversion, a portion of
the Class B shares purchased through the reinvestment of dividends or
capital gains (Dividend Shares) will also convert to Daily Money Class
shares. The portion of Dividend Shares that will convert is determined
by the ratio of your converting Class B non-Dividend Shares to your
total Class B non-Dividend Shares.
DAILY MONEY CLASS SHARES. The fund offers Daily Money Class shares to
individual, institutional and corporate investors at NAV. Daily Money
Class shares may be exchanged only for Class A or Class T shares, as
applicable, of Fidelity Advisor funds or Daily Money Class shares of
Prime Fund, Treasury Fund or Tax-Exempt Fund . Other shareholders may
not exchange Daily Money Class shares of a fund for Class A or Class T
shares of Fidelity Advisor funds. Transfer agency, dividend disbursing
and shareholder services for Daily Money Class shares are performed by
FIIOC. Daily Money Class shares have adopted a Distribution and
Service Plan. Under the Plan, Daily Money Class shares of the fund
currently pay FDC a monthly distribution fee of 0.25% of its average
net assets. The Daily Money Class Plan recognizes that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Daily Money Class's shares, including payments made to
investment professionals that provide shareholder support services or
engage in the sale of the Daily Money Class's shares. The Board of
Trustees of each fund has authorized such payments. For the fiscal
year ended October 31, 1997 t otal operating expenses for Daily
Money Class were ______% of average net assets, after voluntary
expense reimbursements of _____% by FMR which reflect the expense
structure in effect on that date.
For more information about the CDSC, including the conversion feature
and the permitted circumstances for CDSC waivers, contact your
investment professional.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class B
or Class C shares, you may reinvest an amount equal to all or a
portion of the redemption proceeds in the same class of the fund or a
Fidelity Advisor fund, at the NAV next determined after receipt of
your investment order, provided that such reinvestment is made within
9 0 days of redemption. Under these circumstances, the dollar
amount of the CDSC, if any, you paid will be reimbursed to you by
reinvesting that amount in Class B or Class C shares, as applicable,
of the fund or Class B or Class C shares, as applicable, of the
Fidelity Advisor fund. You must reinstate your Class B or Class C
shares into an account with the same registration. This privilege may
be exercised only once by a shareholder with respect to the fund and
certain restrictions may apply. For purposes of the CDSC schedule, the
holding period will continue as if the Class B or Class C shares had
not been redeemed.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require the fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does
not follow reasonable procedures designed to verify the identity of
the caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of the confirmation statements immediately after receipt. If you do
not want the ability to redeem and exchange by telephone, call
Fidelity for instructions. Additional documentation may be required
from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
TO ALLOW FMR TO MANAGE THE FUND MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify
Client Services in advance of large transactions.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time. The fund also reserves the right to reject any
specific purchase by exchange. See "Exchange Restrictions" on page
. Purchase by exchange may be refused if, in FMR's opinion,
they would disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
(small solid bullet) Other Purchases: You begin to earn dividends as
of the first business day following the day your funds are received.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday
will continue to earn dividends until the next business day.
(small solid bullet) The fund may withhold redemption proceeds until
it is reasonably assured that investments credited to your account
have been received and collected.

When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action,
the fund may suspend redemption or postpone payment dates. In cases of
suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next
determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV, minus
any applicable CDSC, on the day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the fund
without reimbursement from the fund. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class B shares
for Class B shares of a Fidelity Advisor fund and Class C shares for
Class C shares of a Fidelity Advisor fund seven calendar days after
purchase. Currently, there is no limit on the number of exchanges out
of the fund.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day the fund is open
for business by calling your investment professional or Fidelity
Client Services at 1-800-843-3001 between 8:30 a.m. and 4:00 p.m.
Eastern time.
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name account number, the number of shares to be redeemed,
and the name of the fund to be purchased. Written requests for
exchange should be mailed to Fidelity Client Services at the address
on page __.
Exchange instructions may be given by you in writing or by telephone
directly to the transfer agent or through your investment
professional. For more information on entering an exchange
transaction, please consult your investment professional.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class B and Class C shares
will be redeemed at the next determined NAV after your order is
received and accepted. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are
made available. You should note that, under certain circumstances, the
fund may take up to seven days to make redemption proceeds available
for the exchange purchase of shares of another fund. In addition,
please note the following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of the fund, nor are there any administrative or
redemption fees applicable to exchanges out of the fund.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if
the fund receives or anticipates simultaneous orders affecting
significant portions of the fund's assets. In particular, a pattern of
exchanges that coincides with a "market timing" strategy may be
disruptive to the fund.
(small solid bullet) Any exchanges of Class B or Class C shares are
not subject to a CDSC.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any
time. The fund reserves the right to terminate or modify the exchange
privilege in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may
im pose redemption fees of up to 1.00% on exchanges. Check each
fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
THE CDSC ON CLASS B AND CLASS C SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that Class B and Class C
shares are redeemed within one year following the death or the initial
determination of disability;
2. In connection with a total or partial redemption related to certain
distributions from retirement plans or accounts at age 701/2 which are
permitted without penalty pursuant to the Internal Revenue Code; or
3. In connection with redemptions through the Fidelity Advisor
Systematic Withdrawal Program.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the fund or FDC. This Prospectus and
the related SAI do not constitute an offer by the fund or by FDC to
sell or to buy shares of the fund to any person to whom it is unlawful
to make such offer.

PRIME FUND - CAPITAL RESERVES CLASS
TREASURY FUND - CAPITAL RESERVES CLASS
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
NEWBURY STREET TRUST

CROSS REFERENCE SHEET
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contracts
c *
d Management Contracts
e *
f Distribution and Service Plans
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plans
a(iii),b,c *
22 Performance
23 *
*Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated
December 30, 1997. The SAI has been filed with the Securities
and Exchange Commission (SEC) and is available along with other
related materials, for reference on the SEC's Internet Web Site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of any of
these documents, call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
DMFI-pro-1297
Prime Fund and Treasury Fund each seek to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
PRIME FUND -
CAPITAL
RESERVES CLASS
(FUND NUMBER 076)
TREASURY FUND -
CAPITAL
RESERVES CLASS
(FUND NUMBER 077)
TAX-EXEMPT
FUND - CAPITAL
RESERVES CLASS
(FUND NUMBER 079)

KEY FACTS WHO MAY WANT TO INVEST

EXPENSES CAPITAL RESERVES CLASS'S
YEARLY OPERATING EXPENSES.

FINANCIAL HIGHLIGHTS

PERFORMANCE

THE FUNDS IN DETAIL CHARTER HOW EACH FUND IS ORGANIZED.

INVESTMENT PRINCIPLES AND RISKS EACH
FUND'S OVERALL APPROACH TO INVESTING.

BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND WHAT
THEY INCLUDE.

YOUR ACCOUNT TYPES OF ACCOUNTS DIFFERENT WAYS TO
SET UP YOUR ACCOUNT, INCLUDING
TAX-SHELTERED RETIREMENT PLANS.

HOW TO BUY SHARESOPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.

HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.

INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.

SHAREHOLDER AND ACCOUNT DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES

TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF PURCHASES
AND REDEMPTIONS.

EXCHANGE RESTRICTIONS

KEY FACTS

WHO MAY WANT TO INVEST
Each fund offers individual and institutional investors a convenient
way to invest in professionally managed portfolios of money market
instruments.
Prime Fund and Treasury Fund are designed for investors who would like
to earn current income while preserving the value of their investment.
Tax-Exempt Fund is designed for investors who would like to earn
federally tax-exempt income at current money market rates while
preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury
Fund offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a
portion of your investments. Each fund (except for Treasury Fund -
Advisor B Class and Advisor C Class) offers free checkwriting to give
you easy access to your money.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio. Each
fund offers Daily Money Class shares and Capital Reserves Class
shares. Treasury Fund also offers Advisor B Class (Class B) shares and
Advisor C Class (Class C) shares. Daily Money Class and Capital
Reserves Class shares do not have a sales charge, but do pay a 12b-1
fee. Class B and Class C shares do not have a front-end sales charge,
but do have a contingent deferred sales charge(CDSC), and pay a 12b-1
fee. Class B and Class C shares may be purchased directly only in
connection with the Fidelity Advisor Systematic Exchange Program (the
Program) for purposes of exchanging into Class B or Class C shares, as
applicable, of the Fidelity Advisor funds. You may obtain more
information about Daily Money Class shares, Class B shares and Class C
shares, which are not offered through this prospectus, from your
investment professional or by calling Fidelity Client Services at
1-800-843-3001.
The performance of one class of shares of a fund may be different from
the performance of another class of shares of the same fund because of
different sales charges and class expenses. Contact your investment
professional to discuss which class is appropriate for you.
In determining which class of shares is appropriate for you, you
should consider, among other factors, the amount you plan to invest,
the length of time you intend to hold your shares, and the package of
services provided to you by your investment professional and the
overall costs of those services.
In general, Daily Money Class shares have lower costs than Capital
Reserves Class, Class B and Class C shares because Daily Money Class
shares do not have a sales charge and have lower 12b-1 fees. Class B
shares have higher costs than Class C shares over a short holding
period because Class B shares have a higher CDSC that declines over
six years, and Class B shares have lower costs than Class C shares
over a longer period because Class B shares convert to Daily Money
Class shares after seven years. If you sell your Class B shares within
six years, you will normally pay a CDSC that varies depending on how
long you have held your shares. If you sell your Class C shares within
one year, you will normally pay a 1.00% CDSC. Class C shares do not
convert to another class of shares. Please note that purchase amounts
of more than $250,000 will note be accepted for Class B shares and
purchase amounts of more than $1,000,000 will not be accepted for
Class C shares.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Capital Reserves Class shares of a fund.
SALES CHARGE ON PURCHASES AND NONE
REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE NONE

REDEMPTION FEE NONE

EXCHANGE FEE NONE

ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR). Each fund also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements
and financial reports.
12b-1 fees are paid by the Capital Reserves Class of each fund to the
distributor for services and expenses in connection with the
distribution of capital Reserves Class shares of each fund. Long-term
shareholders may pay more than the economic equivalent of the maximum
sales charges permitted by the National Association of Securities
Dealers, Inc., due to 12b-1 fees.
Capital Reserve Class's expenses are factored into its share price or
dividends and are not charged directly to shareholder accounts (see
"Breakdown of Expenses" on page ).
The following figures are based on estimated expenses, adjusted to
reflect current fees, of Capital Reserves Class of each fund and are
calculated as a percentage of average net assets of Capital Reserves
Class of each fund.A portion of the brokerage commissions that a fund
pays is used to reduce that fund's expenses. In addition, each fund
has entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total Capital Reserves Class operating expenses
presented in the table would have been __% for Prime Fund, __% for
Treasury Fund and __% for Tax-Exempt Fund.
PRIME FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

TREASURY FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

TAX-EXEMPT FUND
MANAGEMENT FEE [(AFTER REIMBURSEMENT)] %

12B-1 FEE (DISTRIBUTION FEE) %

OTHER EXPENSES [(AFTER REIMBURSEMENT)] %

TOTAL OPERATING EXPENSES %

EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Capital Reserves Class shares of a
fund, assuming a 5% annual return and full redemption at the end of
each time period. Total expenses shown below include any shareholder
transaction expenses and Capital Reserves Class's estimated annual
operating expenses.
1 YEAR 3 YEARS

PRIME FUND $ $

TREASURY $ $

TAX-EXEMPT FUND $ $

THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Capital Reserves Class of each
fund to the extent that total operating expenses (as a percentage of
its respective average net assets) exceed 0.90% of its average net
assets. If these agreements were not in effect, the other expenses and
total operating expenses, as a percentage of average net assets, of
Capital Reserves Class of each fund would have been, ______% and
______%, for Prime Fund, ______% and _______%, for Treasury Fund and
_______% and ______% for Tax-Exempt Fund. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions,
and extraordinary expenses.
FINANCIAL HIGHLIGHTSThe financial highlights tables that follow for
Prime Fund and Treasury Fund have been audited by ___________,
independent accountants. The financial highlights table that follows
for Tax-Exempt Fund has been audited by ____________, independent
accountants. The funds' financial highlights, financial statements,
and reports of the auditors are included in each fund's Annual Report,
and are incorporated by reference into (are legally a part of) the
funds' SAI. Contact Fidelity Client Services (Client Services) or your
investment professional for a free copy of an Annual Report or the
SAI.
[TO BE FILED BY SUBSEQUENT AMENDMENT]

PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
Performance history will be available for the Capital Reserves Class
of each fund after the classes have been in operation for six months.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Newbury Street Trust, an open-end management
investment company organized as a Delaware business trust on December
30, 1991.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. The transfer agent will mail proxy
materials in advance, including a voting card and information about
the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which handles their business affairs.
FMR Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of October 31, 1997, FMR advised funds having approximately
______million shareholder accounts with a total value of more than
$_______ billion.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for Capital Reserves Class
shares of Prime Fund and Treasury Fund. UMB Bank, n.a. (UMB) is the
transfer agent for Tax-Exempt Fund, and is located at 1010 Grand
Avenue, Kansas City, Missouri. UMB employs FIIOC to perform transfer
agent servicing functions for Capital Reserves Class shares of
Tax-Exempt Fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members
of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940
Act to form a controlling group with respect to FMR Corp.
As of ___________, approximately ____%, ____% and ____% of each
Capital Reserves Class of Prime Fund, Treasury Fund and Tax-Exempt
Fund's total outstanding shares, respectively, were held by FMR and an
FMR affiliate.
As of ___________, approximately ____%, ____% and ____% of each
Capital Reserves Class of Prime Fund, Treasury Fund and Tax-Exempt
Fund's total outstanding shares, respectively, were held by a
shareholder.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
PRIME FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. dollar-denominated money market
securities of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, U.S.
Government securities, and repurchase agreements. The fund also may
enter into reverse repurchase agreements.
TREASURY FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase
agreements for these securities. The fund does not enter into reverse
repurchase agreements.
TAX-EXEMPT FUND seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality,
short-term municipal obligations selected on the basis of liquidity
and stability of principal.
The fund invests in high-quality municipal money market securities of
all types. The fund normally invests so that at least 80% of its
income distributions is exempt from federal income tax. The fund does
not currently intend to purchase municipal securities whose interest
is subject to the federal alternative minimum tax.
FMR normally invests Tax-Exempt Fund's assets according to its
investment strategy and does not expect to invest in federally taxable
obligations. Tax-Exempt Fund also reserves the right to hold a
substantial amount of uninvested cash or to invest more than normally
permitted in federally taxable obligations for temporary, defensive
purposes.
Prime Fund, Treasury Fund and Tax-Exempt Fund comply with
industry-standard requirements on the quality, maturity, and
diversification of their investments, which are designed to help
maintain a stable $1.00 share price. Of course, there is no guarantee
that the funds will maintain a stable $1.00 share price. The funds
will purchase only high-quality securities that FMR believes present
minimal credit risks and will observe maturity restrictions on
securities they buy. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and
the value of your investment) to change.
The funds earn income at current money market rates. Each fund
stresses preservation of capital, liquidity, and income (tax-free
income in the case of Tax-Exempt Fund) and does not seek the higher
yields or capital appreciation that more aggressive investments may
provide. Each fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market
conditions.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings are detailed in each fund's financial
reports, which are sent to shareholders twice a year. For a free SAI
or financial report, call Fidelity Client Services at 1-800-843-3001or
your investment professional.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
municipalities, local and state governments, and other entities.
These securities may carry fixed, variable, or floating interest
rates. Some money market securities employ a trust or similar
structure to modify the maturity, price characteristics, or quality of
financial assets so that they are eligible investments for money
market funds. If the structure does not perform as intended, adverse
tax or investment consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments issued or guaranteed by the U.S. Treasury or by an agency
or instrumentality of the U.S. Government. Not all U.S. Government
securities are backed by the full faith and credit of the United
States. For example, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the
entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Likewise, securities for which
foreign entities provide credit or liquidity support may involve
different risks than those supported by domestic entities. Extensive
public information about the foreign entity may not be available, and
unfavorable political, economic, or governmental developments in the
foreign country involved could affect the repayment of principal or
payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Prime Fund will invest more than 25% of its total assets
in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Tax-Exempt Fund will not invest in a money market fund
and does not not currently intend to invest in repurchase agreements.
Treasury Fund and Prime Fund do not currently intend to invest in a
money market fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one industry
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: Prime Fund may not invest more than 5% of its total
assets in any one issuer, except that the fund may invest up to 25% of
its total assets in the highest quality securities of a single issuer
for up to three business days.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Fund may invest more than 25% of its total assets in
tax-free securities that finance similar types of projects.
BORROWING. A fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Prime Fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an
amount exceeding 331/3% of its total assets. Each of Treasury Fund and
Tax-Exempt Fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
LENDING A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets. Treasury Fund and Tax-Exempt Fund do not lend
money to other funds advised by FMR.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
Each of Prime Fund and Treasury Fund seeks to obtain as high a level
of current income as is consistent with the preservation of capital
and liquidity.
Tax-Exempt Fund seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality,
short-term municipal obligations selected on the basis of liquidity
and stability of principal. The fund normally invests so that at least
80% of its income distributions is free from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer. This
limitation does not apply to U.S. Government Securities or to
securities of other investment companies.
Prime Fund will invest more than 25% of its total assets in the
financial services industry.
Prime Fund may borrow only for temporary or emergency purposes, or
engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Tax-Exempt Fund may borrow only
for temporary or emergency purposes, but not in an amount exceeding
331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in
that class's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to an affiliate who
provides assistance with these services. Each fund also pays OTHER
EXPENSES, which are explained on page ___.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each
fund pays a fee at an annual rate of 0.25% of its average net assets.
FMR Texas is the funds' sub-advisor and has primary responsibility for
managing their investments. FMR is responsible for providing other
management services. FMR pays FMR Texas 50% of its management fee
(before expense reimbursements) for FMR Texas's services. FMR paid FMR
Texas fees equal to _______% of Prime Fund's, ________% of Treasury
Fund's and _______% of Tax-Exempt Fund's average net assets for the
fiscal year ended October 31, 1997.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Capital Reserves Class of Prime Fund and
Treasury Fund (the Taxable Funds). Fidelity Service Company, Inc.
(FSC) calculates the net asset value per share (NAV) and dividends for
Capital Reserves Class of each Taxable Fund and maintains the general
accounting records for each Taxable Fund.
For the fiscal year ended October 31, 1997, pricing and bookkeeping
fees paid (as a percentage of average net assets) amounted to the
following. These amounts are before expense reductions, if any.
PRICING AND
BOOKKEEPING
FEES PAID BY

FUND

PRIME FUND %

TREASURY FUND %

UMB is the transfer and service agent for Tax-Exempt Fund. UMB has
entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for
Capital Reserves Class of Tax-Exempt Fund. UMB has also entered into a
sub-agreement with FSC. FSC calculates the NAV and dividends for
Capital Reserves Class of Tax-Exempt Fund and maintains the general
accounting records for Tax-Exempt Fund. Under the terms of the
sub-agreements, FIIOC and FSC receive all related fees paid to UMB by
Capital Reserves Class of Tax-Exempt Fund.
For the fiscal year ended October 31, 1997 pricing and bookkeeping
fees paid (as a percentage of average net assets) amounted to the
following. These amounts are before expense reductions, if any.
PRICING AND
BOOKKEEPING
FEES PAID BY

FUND

TAX-EXEMPT FUND %

Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Capital Reserves Class of each fund has adopted a DISTRIBUTION AND
SERVICE PLAN. Under the plans, Capital Reserves Class of each fund is
authorized to pay FDC a monthly distribution fee as compensation for
its services and expenses in connection with the distribution of
Capital Reserves Class shares. Capital Reserves Class of each pays FDC
a monthly distribution fee at an annual rate of 0.50% of its average
net assets throughout the month.
FDC may compensate intermediaries that provide shareholder support
services, engage in the sale of Capital Reserves Class shares or to
pay distribution expenses at an annual rate of up to 0.50% of average
net assets they maintain.
The Capital Reserves Class plans specifically recognize that FMR may
make payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Capital Reserves Class shares, including payments made
to investment professionals that provide shareholder support
services or engage in the sale of Capital Reserves Class shares.
Currently, the Board of Trustees of each fund has authorized such
payments to intermediaries at an annual rate of up to 0.10% of the
average net assets they maintain.
Independent of the Capital Reserves Class Plans, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of
the average net assets they maintain. The recordkeeping fee will paid
by FMR or its affiliates, not by a fund, and will not be paid for
distribution services.
YOUR ACCOUNT

TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed at the right.
The account guidelines that follow may not apply to certain funds or
to certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing
through a retirement account or if your employer offers a fund through
a retirement program, you may be subject to additional fees. For more
information, please refer to your program materials, contact your
employer, or call your retirement benefits number or your investment
professional directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE
FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of
legal age and under 70 1/2(checkmark)(solid club) with earned income
to invest up to $2,000 per tax year. Individuals can also invest in a
spouse's IRA if the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS allow employees of corporations of all
sizes to contribute a percentage of their wages on a tax-deferred
basis. These accounts need to be established by the trustee of the
plan.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employed income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employed income (and their eligible employees) with many of
the advantages of a 401(k) plan, but with fewer administrative
requirements.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA). Contact your
investment professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Contact your investment professional.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each class is the class's net asset
value per share (NAV). Each fund is managed to keep its NAV stable at
$1.00. The Capital Reserves Class shares are sold without a sales
charge.
Your shares will be purchased at the next NAV calculated after your
order is received and accepted. Each class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Share certificates are not available for Capital Reserves Class
shares.
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
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Capital
Reserves Class of Prime Fund, Treasury Fund or Tax-Exempt Fund or from
another Fidelity fund, or
(small solid bullet) Contact your investment professional.
BY MAIL. You or your investment professional must send a check payable
to the fund in which you plan to invest. When making subsequent
investments by check, please write your fund account number on the
check. All investments by check should be sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For
wiring information and instructions, you should call the investment
professional through which you trade or if you trade directly through
Fidelity, call Fidelity Client Services. There is no fee imposed by
the funds for wire purchases. However, if you buy shares through an
investment professional, the investment professional may impose a fee
for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received and accepted by the transfer agent at the
applicable fund's designated wire bank before the close of the
Federal Reserve Wire System on the day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large
purchases.
AUTOMATED PURCHASE ORDERS. You may purchase shares sold through
investment professionals utilizing an automated placement and
settlement system that guarantees payment for orders on a specific
date.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $100
MINIMUM BALANCE $500
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $500
There is no minimum account balance or initial or subsequent
investment minimum for certain retirement accounts funded through
salary deduction, or accounts opened with the proceeds of
distributions from such Fidelity retirement accounts. Refer to the
program materials for details.
HOW TO SELL SHARES
Y ou can arrange to take money out of your fund account at any time
by selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each class is the class's NAV.
Your shares will be sold at the next NAV calculated after your
order is received and accepted. Each class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$500 worth of shares in the account to keep it open.
It is the responsibility of your investment professional to transmit
your order to redeem shares to Fidelity before the close of business
on the day you place your order.
BY TELEPHONE. Redemption requests may be made by calling Fidelity
Client Services at 1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to
the address given above. The letter should specify the name of the
fund, the number of shares to be sold, name, account numbers, address,
and should include the additional requirements listed below that apply
to each particular account.

<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS

CORPORATIONS, ASSOCIATIONS LETTER OF INSTRUCTION AND A CORPORATE RESOLUTION, SIGNED
BY PERSON(S) REQUIRED TO SIGN FOR THE ACCOUNT
ACCOMPANIED BY SIGNATURE GUARANTEE(S).

</TABLE>

You must designate on your account application the U.S. commercial
bank account(s) into which you wish the redemption proceeds to be
deposited. Fidelity Client Services will then notify you that this
feature has been activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should
send a letter of instruction, including a signature guarantee, to
Fidelity Client Services at the address shown on page__.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption
proceeds. However, if you sell shares through an investment
professional, the investment professional may impose a fee for wire
redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire
System to your bank account of record. If your redemption wire request
is received and accepted by the transfer agent by 4:00 p.m. Eastern
time for Prime Fund and Treasury Fund and 12:00 noon Eastern time for
Tax-Exempt Fund redemptions will normally be wired on that day. All
other redemption proceeds from redemption wire requests will normally
be wired on the following business day.
A fund reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. The minimum amount for a check is $500. Do not,
however, try to close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through
Friday, 8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements: (quarterly/monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity Client Services if you need additional copies of
financial reports, prospectuses or historical account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with Fidelity for institutions that wish to open multiple
accounts (a master account and sub-accounts). You may be required to
enter into a separate agreement with FIIOC. Charges for these
services, if any, will be determined based on the level of services to
be rendered.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Income dividends
are declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and
are normally distributed on the first business day of the following
month. Based on prior approval of each fund, dividends relating to
Capital Reserves Class shares redeemed during the month can be
distributed on the day of redemption. Each fund reserves the right to
limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. Capital Reserves Class offers two
options.
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
same class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions, if any.
For retirement accounts, all distributions are automatically
reinvested. When you are over 59 years old, you can receive
distributions in cash.
Dividends will normally be reinvested at each fund's Capital Reserves
Class NAV on the last day of the month. Capital gain distributions, if
any, will be reinvested at the NAV as of the record date of the
distribution. The mailing of distribution checks will begin within
seven days.
TAXES
As with any investment, you should consider how an investment in the
funds could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt Fund earns is
distributed to shareholders as income dividends. Interest that is
federally tax-free remains tax-free when it is distributed.
Distributions from Prime Fund and Treasury Fund, however, are subject
to federal income tax and may also be subject to state or local taxes.
If you live outside the United States, your distributions from these
funds could also be taxed by the country in which you reside.
For federal tax purposes, income and short-term capital gain
distributions from Prime Fund and Treasury Fund are taxed as
dividends; long-term capital gain distributions, if any, are taxed as
long-term capital gains.
However, for shareholders of Tax-Exempt Fund, gain on the sale of
tax-free bonds results in taxable distributions. Short-term capital
gains and a portion of the gain on bonds purchased at a discount are
taxed as dividends; long-term capital gain distributions, if any, are
taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally
free from state and local income taxes. However, particular states may
limit this benefit, and some types of securities, such as repurchase
agreements and some agency-backed securities, may not qualify for the
benefit. In addition, some states may impose intangible property
taxes. You should consult your own tax adviser for details and
up-to-date information on the tax laws in your state.
For the fiscal year ended October 31, 1997, _____% of Prime Fund's and
___% of Treasury Fund's income distributions were derived from
interest on U.S. Government securities which is generally exempt from
state income tax.
Distributions are taxable when they are paid, whether you take them in
cash or reinvest them. However, distributions declared in December and
paid in January are taxable as if they were paid on December 31.
Every January, Fidelity will send you and the IRS a statement showing
the taxable distributions paid to you in the previous year.
A portion of Tax-Exempt Fund's dividends may be free from state or
local taxes. Income from investments in your state are often tax-free
to you. Each year, the transfer agent will send you a breakdown of
Tax-Exempt Fund's income from each state to help you calculate your
taxes.
During the fiscal year ended October 31, 1997,_______% of Tax-Exempt
Fund's income dividend was free from federal income tax.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and each class's NAV is normally
calculated each day the New York Stock Exchange (NYSE) is open for
trading. The following holiday closings have been scheduled for 1997
and 1998: New Year's Day, Martin Luther King's Birthday (in 1998),
Washington's Birthday, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects
the same holiday schedule to be observed in the future, the NYSE may
modify its holiday schedule at any time. On any day that the NYSE
closes early, the principal government securities markets close early
(such as on days in advance of holidays generally observed by
participants in such markets), or as permitted by the SEC, the right
is reserved to advance the time on that day by which purchase and
redemption orders must be received.
To the extent that portfolio securities are traded in other markets on
days when the NYSE is closed, each class's NAV may be affected on days
when investors do not have access to the fund to purchase or redeem
shares. Certain Fidelity funds may follow different holiday closing
schedules.
A CLASS'S NAV is the value of a single share. The NAV of Capital
Reserves Class of each fund is computed by adding Capital Reserves
Class's pro rata share of the value of the fund's investments, cash,
and other assets, subtracting Capital Reserves Class's pro rata share
of the value of the fund's liabilities, subtracting the liabilities
allocated to Capital Reserves Class, and dividing the result by the
number of Capital Reserves Class shares of that fund that are
outstanding. Each fund values its portfolio securities on the basis of
amortized cost. This method minimizes the effect of changes in a
security's market value and helps each fund maintain a stable $1.00
share price.
A CLASS'S OFFERING PRICE (price to buy one share) is its NAV. A
class's REDEMPTION PRICE (price to sell one share) is its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the
transfer agent may only be liable for losses resulting from
unauthorized transactions if they do not follow reasonable procedures
designed to verify the identity of the caller. Fidelity and the
transfer agent will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of the confirmation statements immediately after receipt. If you do
not want the ability to redeem and exchange by telephone, call
Fidelity Client Services for instructions. Additional documentation
may be required from corporations, associations, and certain
fiduciaries.
IF YOU ARE UNABLE TO REACH THE TRANSFER AGENT BY PHONE (for example,
during periods of unusual market activity), consider placing your
order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time. Each fund also reserves the right to reject any
specific purchase order, including certain purchases by exchange. See
"Exchange Restrictions" on page __. Purchase orders may be refused if,
in FMR's opinion, they would disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify
Fidelity Client Services in advance of large transactions.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
the transfer agent has incurred.
Shares purchased by a wire purchase order placed by 4:00 p.m.
Eastern time for Prime Fund and Treasury Fund and 12:00 noon Eastern
time for Tax-Exempt Fund (with receipt of the wire before the close of
the Federal Reserve Wire System on that day) begin to earn dividends
on the day of purchase.
All other purchases begin to earn dividends on the following
business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) S hares redeemed by a redemption wire order
placed by 4:00 p.m. Eastern time for Prime Fund and Treasury Fund and
12:00 noon Eastern time for Tax-Exempt Fund do not earn dividends on
the date of redemption.
(small solid bullet) All o ther redemption orders earn dividends
through the da te of redemption; however, shares redeemed on a
Friday or prior to a holiday continue to earn dividends until the next
business day.
(small solid bullet) If you sell shares by writing a check and the
amount of the check is greater than the value of your account, your
check will be returned to you and you may be subject to additional
charges.
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action,
a fund may suspend redemption or postpone payment dates. In cases of
suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next
determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV on the
day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at the numbers listed on
page __ between 8:30 a.m. and 4:00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name, account number, the number of shares to be redeemed,
and the name of the fund to be purchased. Written requests for
exchange should be mailed to Fidelity Client Services at the address
on page __.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Capital Reserves Class
shares will be redeemed at the next determined NAV after your order is
received and accepted. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are
made available. You should note that, under certain circumstances, a
fund may take up to seven days to make redemption proceeds available
for the exchange purchase of shares of another fund. In addition,
please note the following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage difference between that fund's sales charge and
any sales charge you have already paid in connection with the shares
you are exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or
redemption fees applicable to exchanges out of the fund.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify these
exchange privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
fees of up to 1.00% on purchases, administrative fees of up to $7.50,
and redemption fees of up to 1.50% on exchanges. Check each fund's
prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.

PRIME FUND: CAPITAL RESERVES CLASS AND DAILY MONEY CLASS
Treasury Fund: Capital Reserves Class, Daily Money Class,
Advisor B Class and Advisor C Class
Tax-Exempt Fund: Capital Reserves Class and Daily Money
Class
FUNDS OF Newbury Street Trust
STATEMENT OF ADDITIONAL INFORMATION
December 30, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectuses
(dated December 30, 1997 ). Please retain this document for
future reference. The funds' Annual Report is a separate document
supplied with this SAI. To obtain a free additional copy of a
Prospectus or the Annual Report, please call Fidelity Client Services
(Client Services) at 1-800-843-3001 or your investment professional.
TABLE OF CONTENTS PAGE

INVESTMENT POLICIES AND LIMITATIONS

PORTFOLIO TRANSACTIONS

VALUATION

PERFORMANCE

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION

DISTRIBUTIONS AND TAXES

FMR

TRUSTEES AND OFFICERS

MANAGEMENT CONTRACTS

DISTRIBUTION AND SERVICE PLANS

CONTRACTS WITH FMR AFFILIATES

DESCRIPTION OF THE TRUST

FINANCIAL STATEMENTS

APPENDIX

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TREASURY FUND AND PRIME FUND (THE TAXABLE
FUNDS)
Fidelity Investments Institutional Operations Company, Inc.
( FIIOC )
TRANSFER AGENT FOR TAX-EXEMPT FUND
UMB Bank, n.a. (UMB)
For more information on any Fidelity fund, including charges and
expenses, call or write for a free prospectus. Read it carefully
before you invest or send money.
DMF- ptb-1297
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectuses. Unless otherwise noted, whenever an investment
policy or limitation states a maximum percentage of a fund's assets
that may be invested in any security or other asset, or sets forth a
policy regarding quality standards, such standard or percentage
limitation will be determined immediately after and as a result of the
fund's acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with a fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF PRIME FUND
THE FOLLOWING ARE PRIME FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the fund's
total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that come to exceed this amount will
be reduced within three days (not including Sundays and holidays) to
the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund will invest more than 25% of its total assets in the
financial services industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments; or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other
than securities issued or guaranteed by the U.S. government or any of
its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in securities of a single issuer;
provided that the fund may invest up to 25% of its total assets in the
first tier securities of a single issuer for up to three business
days. (This limit does not apply to securities of other open-end
investment companies managed by FMR or a successor or affiliate
purchased pursuant to an exemptive order granted by the SEC.)
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) Subject to revision upon 60 days' notice to shareholders, the
fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party. The fund will not purchase any
security while borrowings (excluding reverse repurchase agreements)
representing more than 5% of its total assets are outstanding. The
fund will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This
limitation does not apply to purchases of debt securities or to
repurchase agreements.)
(viii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
INVESTMENT LIMITATIONS OF TREASURY FUND
THE FOLLOWING ARE TREASURY FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the fund's
total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that come to exceed this amount will
be reduced within three days (not including Sundays and holidays) to
the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments; or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies and limitations as
the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to purchase a security (other
than securities issued or guaranteed by the U.S. Government or any of
its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in securities of a single issuer;
provided that the fund may invest up to 25% of its total assets in the
first tier securities of a single issuer for up to three business
days. (This limit does not apply to securities of other open-end
investment companies managed by FMR or a successor or affiliate
purchased pursuant to an exemptive order granted by the SEC.)
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) Subject to revision upon 60 days' notice to shareholders, the
fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party. The fund will not purchase any
security while borrowings (excluding reverse repurchase agreements)
representing more than 5% of its total assets are outstanding. The
fund will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
(viii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
INVESTMENT LIMITATIONS OF TAX-EXEMPT FUND
THE FOLLOWING ARE TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government, or any of its agencies or instrumentalities,
or securities of other investment companies), if as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term
credits as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 33 1/3% of the
value of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to
exceed the 33 1/3% of the fund's assets by reason of a decline in net
assets will be reduced within three days (exclusive of Sundays and
holidays) to the extent necessary to comply with the 33 1/3%
limitation;
(6) underwrite any issue of securities; except to the extent that the
purchase of municipal bonds in accordance with the fund's investment
objective, policies, and restrictions, either directly from the
issuer, or from an underwriter for an issuer, may be deemed
underwriting;
(7) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;
(8) purchase or sell real estate, but this shall not prevent the fund
from investing in municipal bonds or other obligations secured by real
estate or interests therein;
(9) purchase or sell commodities or commodity (futures) contracts;
(10) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements; or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
For purposes of limitation (1), certain securities subject to credit
guarantees or puts from third parties are not considered securities of
their issuer in accordance with industry standard requirements for
money market funds. For purposes of limitations (1) and (7), FMR
identifies the issuer of a security depending on its terms and
conditions. In the case of identifying the issuer, FMR will consider
the entity or entities responsible for payment of interest and
repayment of principal and the source of such payments; the way in
which assets and revenues of an issuing political subdivision are
separated from those of other political entities; and whether a
government or other entity is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (5)). The fund will not purchase any security while
borrowings representing more than 5% of its total assets are
outstanding. The fund will not borrow from other funds advised by FMR
or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(ii) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(iii) The fund does not currently intend to invest in interests in
real estate investment trusts that are not readily marketable, or to
invest in interests in real estate limited partnerships that are not
listed on the New York Stock Exchange or the American Stock Exchange
or traded on the NASDAQ National Market System.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the funds' policies on quality and maturity, see the section
entitled "Quality and Maturity" on page .
SHAREHOLDER NOTICE. Treasury Fund invests only in U.S. Treasury
securities and repurchase agreements for those securities. This
operating policy may be changed only upon 90 days' notice to
shareholders. Each of Treasury Fund and Prime Fund do not intend to
purchase futures contracts or options on futures contracts. This
operating policy may be changed only upon approval by the Board of
Trustees and 60 days' notice to shareholders.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES include pools of mortgages, loans,
receivables, or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing
the securities and, in certain cases, supported by letters of credit,
surety bonds, or other credit enhancements. The value of asset-backed
securities may also be affected by the creditworthiness of the
servicing agent for the pool, the originator of the loans or
receivables, or the entities providing the credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve
a commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place
after the customary settlement period for that type of security.
Typically, no interest accrues to the purchaser until the security is
delivered.
When purchasing securities on a delayed-delivery basis, each fund
assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Because a fund is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the fund's other investments. If a fund remains
substantially fully invested at a time when delayed-delivery purchases
are outstanding, the delayed-delivery purchases may result in a form
of leverage. When delayed-delivery purchases are outstanding, the fund
will set aside appropriate liquid assets in a segregated custodial
account to cover its purchase obligations. When a fund has sold a
security on a delayed-delivery basis, the fund does not participate in
further gains or losses with respect to the security. If the other
party to a delayed-delivery transaction fails to deliver or pay for
the securities, the fund could miss a favorable price or yield
opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and
bankers' acceptances of U.S. banks and their branches located outside
of the United States, U.S. branches and agencies of foreign banks, and
foreign branches of foreign banks. A fund may also invest in U.S.
dollar-denominated securities issued or guaranteed by other U.S. or
foreign issuers, including U.S. and foreign corporations or other
business organizations, foreign governments, foreign government
agencies or instrumentalities, and U.S. and foreign financial
institutions, including savings and loan institutions, insurance
companies, mortgage bankers, and real estate investment trusts, as
well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and by
governmental regulation. Payment of interest and principal on these
obligations may also be affected by governmental action in the country
of domicile of the branch (generally referred to as sovereign risk).
In addition, evidence of ownership of portfolio securities may be held
outside of the United States and a fund may be subject to the risks
associated with the holding of such property overseas. Various
provisions of federal law governing the establishment and operation of
U.S. branches do not apply to foreign branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be
general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
federal and state regulation, as well as by governmental action in the
country in which the foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic
developments, withholding taxes, seizures of foreign deposits,
currency controls, interest limitations, or other governmental
restrictions that might affect payment of principal or interest, or
the ability to honor a credit commitment. Additionally, there may be
less public information available about foreign entities. Foreign
issuers may be subject to less governmental regulation and supervision
than U.S. issuers. Foreign issuers also generally are not bound by
uniform accounting, auditing, and financial reporting requirements
comparable to those applicable to U.S. issuers.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt
Fund does not intend to invest in securities whose interest is
federally taxable. However, from time to time on a temporary basis,
the fund may invest a portion of its assets in fixed-income
obligations whose interest is subject to federal income tax.
Should Tax-Exempt Fund invest in federally taxable obligations, it
would purchase securities that, in FMR's judgment, are of high
quality. These obligations would include those issued or guaranteed by
the U.S. Government or its agencies or instrumentalities and
repurchase agreements backed by such obligations.
Proposals to restrict or eliminate the federal income tax exemption
for interest on municipal obligations are introduced before Congress
from time to time. Proposals also may be introduced before state
legislatures that would affect the state tax treatment of Tax-Exempt
Fund's distributions. If such proposals were enacted, the availability
of municipal obligations and the value of the fund's holdings would be
affected and the Trustees would reevaluate the fund's investment
objectives and policies.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business at approximately the prices at
which they are valued. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency of trades
and quotations, (2) the number of dealers and prospective purchasers
in the marketplace, (3) dealer undertakings to make a market, (4) the
nature of the security (including any demand or tender features), and
(5) the nature of the marketplace for trades (including the ability to
assign or offset the fund's rights and obligations relating to the
investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal
and interest within seven days. Also, FMR may determine some
restricted securities, municipal lease obligations, and time deposits
to be illiquid.
In the absence of market quotations, illiquid investments are valued
for purposes of monitoring amortized cost valuation at fair value as
determined in good faith by a committee appointed by the Board of
Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, each fund has received permission to lend
money to, and borrow money from, other funds advised by FMR or its
affiliates. Treasury Fund and Tax-Exempt Fund currently intend to
participate in this program only as borrowers. A fund will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund will lend through the program only
when the returns are higher than those available from an investment in
repurchase agreements. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial
assets. For example, put features can be used to modify the maturity
of a security, or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as
intended, adverse tax or investment consequences may result. Neither
the Internal Revenue Service (IRS) nor any other regulatory authority
has ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities. Generally,
the funds will not hold such obligations directly as a lessor of the
property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest
gives a fund a specified, undivided interest in the obligation in
proportion to its purchased interest in the total amount of the
obligation.
Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations.
MUNICIPAL MARKET DISRUPTION RISK. The value of municipal securities
may be affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the event
of a bankruptcy. Municipal bankruptcies are relatively rare, and
certain provisions of the U.S. Bankruptcy Code governing such
bankruptcies are unclear and remain untested. Further, the application
of state law to municipal issuers could produce varying results among
the states or among municipal securities issuers within a state. These
legal uncertainties could affect the municipal securities market
generally, certain specific segments of the market, or the relative
credit quality of particular securities. Any of these effects could
have a significant impact on the prices of some or all of the
municipal securities held by a fund, making it more difficult for the
fund to maintain a stable net asset value per share.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy demand,
(d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to
regulatory action by a number of private and governmental agencies,
including federal, state, and local governmental agencies. A major
source of revenues for the health care industry is payments from the
Medicare and Medicaid programs. As a result, the industry is sensitive
to legislative changes and reductions in governmental spending for
such programs. Numerous other factors may affect the industry, such as
general and local economic conditions; demand for services; expenses
(including malpractice insurance premiums); and competition among
health care providers. In the future, the following elements may
adversely affect health care facility operations: adoption of
legislation proposing a national health insurance program; other state
or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the
way in which such services are delivered; changes in medical coverage
which alter the traditional fee-for-service revenue stream; and
efforts by employers, insurers, and governmental agencies to reduce
the costs of health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages purchased
with the proceeds of the bond issue. It is extremely difficult to
predict the supply of available mortgages to be purchased with the
proceeds of an issue or the future cash flow from the underlying
mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner
repayments will create an irregular cash flow. Many factors may affect
the financing of multi-family housing projects, including acceptable
completion of construction, proper management, occupancy and rent
levels, economic conditions, and changes to current laws and
regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student
loans. Bonds issued to supply educational institutions with funds are
subject to the risk of unanticipated revenue decline, primarily the
result of decreasing student enrollment or decreasing state and
federal funding. Among the factors that may lead to declining or
insufficient revenues are restrictions on students' ability to pay
tuition, availability of state and federal funding, and general
economic conditions. Student loan revenue bonds are generally offered
by state (or substate) authorities or commissions and are backed by
pools of student loans. Underlying student loans may be guaranteed by
state guarantee agencies and may be subject to reimbursement by the
United States Department of Education through its guaranteed student
loan program. Others may be private, uninsured loans made to parents
or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student
loan revenue bonds are impacted by numerous factors, including the
rate of student loan defaults, seasoning of the loan portfolio, and
student repayment deferral during periods of forbearance. Other risks
associated with student loan revenue bonds include potential changes
in federal legislation regarding student loan revenue bonds, state
guarantee agency reimbursement and continued federal interest and
other program subsidies currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to
have relatively secure credit as a result of their issuer's
importance, monopoly status, and generally unimpeded ability to raise
rates. Despite this, lack of water supply due to insufficient rain,
run-off, or snow pack is a concern that has led to past defaults.
Further, public resistance to rate increases, costly environmental
litigation, and Federal environmental mandates are challenges faced by
issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of
the airline industry and on the stability of a specific carrier who
uses the airport as a hub. Air traffic generally follows broader
economic trends and is also affected by the price and availability of
fuel. Toll road bonds are also affected by the cost and availability
of fuel as well as toll levels, the presence of competing roads, and
the general economic health of an area. Fuel costs and availability
also affect other transportation-related securities, as does the
presence of alternate forms of transportation, such as public
transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer
or a third party at any time or at specified intervals. They are
subject to the risk that the put provider is unable to honor the put
feature (purchase the security). Put providers often support their
ability to buy securities on demand by obtaining letters of credit or
other guarantees from other entities. Demand features, standby
commitments, and tender options are types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality,
a security must be rated in accordance with applicable rules in one of
the two highest categories for short-term securities by at least two
nationally recognized rating services (or by one, if only one rating
service has rated the security); or, if unrated, judged to be of
equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second
tier" securities. First tier securities are those deemed to be in the
highest rating category (e.g., Standard & Poor's A-1 or SP-1), and
second tier securities are those deemed to be in the second highest
rating category (e.g., Standard & Poor's A-2 or SP-2). Split-rated
securities may be determined to be either first or second tier based
on applicable regulations.
Prime Fund and Treasury Fund (the Taxable Funds) may not invest more
than 5% of its total assets in second tier securities. In addition,
the Taxable funds may not invest more than 1% of its total assets or
$1 million (whichever is greater) in the second tier securities of a
single issuer.
A fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a
dollar-weighted average maturity of 90 days or less. When determining
the maturity of a security, a fund may look to an interest rate reset
or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is
unrelated to the coupon rate or maturity of the purchased security. To
protect a fund from the risk that the original seller will not fulfill
its obligation, the securities are held in an account of the fund at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
it is a fund's current policy to engage in repurchase agreement
transactions with parties whose creditworthiness has been reviewed and
found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part
of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security. However, in
general, each fund anticipates holding restricted securities to
maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, the fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under
the agreement. A fund will enter into reverse repurchase agreements
only with parties whose creditworthiness has been found satisfactory
by FMR. Such transactions may increase fluctuations in the market
value of the fund's assets and may be viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when
it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Short sales could be used to
protect the net asset value per share of the fund in anticipation of
increased interest rates, without sacrificing the current yield of the
securities sold short. If a fund enters into a short sale against the
box, it will be required to set aside securities equivalent in kind
and amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with
opening, maintaining, and closing short sales against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are
created by separating the income and principal components of a U.S.
Government security and selling them separately. STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are
created when the coupon payments and the principal payment are
stripped from an outstanding Treasury security by a Federal Reserve
Bank.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and principal payment, which the
dealer then sells. Proprietary receipts, such as Certificates of
Accrual on Treasury Securities (CATS) and Treasury Investment Growth
Receipts (TIGRS), and generic receipts, such as Treasury Receipts
(TRs), are privately stripped U.S. Treasury securities.
Because the SEC does not consider privately stripped government
securities to be U.S. Government securities for purposes of Rule 2a-7,
a fund must evaluate them as it would non-government securities
pursuant to regulatory guidelines applicable to all money market
funds.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
of the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they
are sold at a deep discount from their face value and are redeemed at
face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates
change. In calculating its daily dividend, a fund takes into account
as income a portion of the difference between a zero coupon bond's
purchase price and its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
fund's management contract. FMR has granted investment management
authority to the sub-adviser (see the section entitled "Management
Contracts"), and the sub-adviser is authorized to place orders for the
purchase and sale of portfolio securities, and will do so in
accordance with the policies described below. FMR is also responsible
for the placement of transaction orders for other investment companies
and accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by a fund generally will be traded on a
net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the
size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on
a continuing basis; and the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing, or selling securities; and
the availability of securities or the purchasers or sellers of
securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; effect
securities transactions, and perform functions incidental thereto
(such as clearance and settlement). FMR maintains a listing of
broker-dealers who provide such services on a regular basis. However,
as many transactions on behalf of the funds are placed with
broker-dealers (including broker-dealers on the list) without regard
to the furnishing of such services, it is not possible to estimate the
proportion of such transactions directed to such broker-dealers solely
because such services were provided. The selection of such
broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions
on behalf of the funds may be useful to FMR in rendering investment
management services to the funds or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to the funds. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause each fund to pay such higher commissions,
FMR must determine in good faith that such commissions are reasonable
in relation to the value of the brokerage and research services
provided by such executing broker-dealers, viewed in terms of a
particular transaction or FMR's overall responsibilities to the funds
and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation
should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the funds or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services (FBS), indirect subsidiaries of FMR Corp., if the commissions
are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. From
September 1992 through December 1994, FBS operated under the name
Fidelity Brokerage Services Limited (FBSL). As of January 1995, FBSL
was converted to an unlimited liability company and assumed the name
FBS.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the funds, or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC), an indirect subsidiary
of FMR Corp., if the commissions are fair, reasonable, and comparable
to commissions charged by non-affiliated, qualified brokerage firms
for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the funds and review the commissions paid by
each fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal year ended October 31, 1997 , the fiscal period
ended October 31, 1996 and the fiscal years ended July 31, 1996 and
1995, Treasury Fund and Prime Fund paid no brokerage commissions/
brokerage commissions of $____, $______, $_____and $______, and
$______, $_______, $_______ and $_______, respectively. For the fiscal
years ended October 31, 1997 , 1996 and 1995 Tax-Exempt Fund
paid [no brokerage commissions/brokerage commissions of $____,
$______, and $______, and $_______. During the fiscal year ended
October 31 1997, this amounted to approximately __%, ___% and __%, of
Treasury Fund, Prime Fund and Tax-Exempt Fund, respectively, of the
aggregate brokerage commissions paid by each fund involving
approximately __%, ___% and __%, respectively, of the aggregate dollar
amount of transactions for which the funds paid brokerage commissions.
During the fiscal year ended October 31, 1997 , Prime Fund,
Treasury Fund and Tax-Exempt Fund paid $__, $____, and $____,
respectively in commissions to brokerage firms that provided research
services involving approximately $___, $____, and $____respectively,
of transactions. The provision of research services was not
necessarily a factor in the placement of all this business with such
firms. During the fiscal year ended October 31, 1997 , the funds
paid no fees to brokerage firms that provided research services.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR, investment decisions for
each fund are made independently from those of other funds managed by
FMR or accounts managed by FMR affiliates. It sometimes happens that
the same security is held in the portfolio of more than one of these
funds or accounts. Simultaneous transactions are inevitable when
several funds and accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines each class's
net asset value per share (NAV) at 4:00 p.m. Eastern time. The
valuation of portfolio securities is determined as of this time for
the purpose of computing each class's NAV.
Portfolio securities and other assets are valued on the basis of
amortized cost. This technique involves initially valuing an
instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than its current market value. The
amortized cost value of an instrument may be higher or lower than the
price a fund would receive if it sold the instrument.
Securities of other open-end investment companies are valued at their
respective NAVs.
During periods of declining interest rates, a class's yield based on
amortized cost valuation may be higher than would result if the fund
used market valuations to determine its NAV. The converse would apply
during periods of rising interest rates.
Valuing each fund's investments on the basis of amortized cost and use
of the term "money market fund" are permitted pursuant to Rule 2a-7
under the 1940 Act. Each fund must adhere to certain conditions under
Rule 2a-7, as summarized in the section entitled "Quality and
Maturity" on page ___.
The Board of Trustees oversees FMR's adherence to the provisions of
Rule 2a-7 and has established procedures designed to stabilize each
class's NAV at $1.00. At such intervals as they deem appropriate, the
Trustees consider the extent to which NAV calculated by using market
valuations would deviate from $1.00 per share. If the Trustees believe
that a deviation from a fund's amortized cost per share may result in
material dilution or other unfair results to shareholders, the
Trustees have agreed to take such corrective action, if any, as they
deem appropriate to eliminate or reduce, to the extent reasonably
practicable, the dilution or unfair results. Such corrective action
could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind;
establishing NAV by using available market quotations; and such other
measures as the Trustees may deem appropriate.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each class's yield and total
return fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class's yield for a period, the net
change in value of a hypothetical account containing one share
reflects the value of additional shares purchased with dividends from
the one original share and dividends declared on both the original
share and any additional shares. The net change is then divided by the
value of the account at the beginning of the period to obtain a base
period return. This base period return is annualized to obtain a
current annualized yield. A class also may calculate an effective
yield by compounding the base period return over a one-year period. In
addition to the current yield, the funds may quote yields in
advertising based on any historical seven-day period. Yields for each
class of the funds are calculated on the same basis as other money
market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and
in providing a basis for comparison with other investment
alternatives. However, each class's yield fluctuates, unlike
investments that pay a fixed interest rate over a stated period of
time. When comparing investment alternatives, investors should also
note the quality and maturity of the portfolio securities of
respective investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates the fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing the fund's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to
earn from a fully taxable investment before taxes to equal the class's
tax-free yield. Tax-equivalent yields are calculated by dividing a
class's yield by the result of one minus a stated federal income tax
rate. If only a portion of a class's yield is tax-exempt, only that
portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1997. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of
hypothetical tax-exempt obligations yielding from _% to _%. Of course,
no assurance can be given that a fund will achieve any specific
tax-exempt yield. While the Tax-Exempt Fund invests principally in
obligations whose interest is exempt from federal income tax, other
income received by the fund may be taxable.
1997 TAX RATES AND TAX-EQUIVALENT YIELDS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FEDERAL IF INDIVIDUAL TAX-EXEMPT YIELD IS:

TAXABLE INCOME* MARGINAL % % % % % % % %

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SINGLE RETURN JOINT RETURN RATE** THEN TAXABLE-EQUIVALENT YIELD IS

</TABLE>

$ $ % % % % % % % %

* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions,
limitations on itemized deductions, and other credits, exclusions, and
adjustments which may increase a taxpayer's marginal tax rate. An
increase in a shareholder's marginal tax rate would increase that
shareholder's tax-equivalent yield.
Tax-Exempt Fund may invest a portion of its assets in obligations that
are subject to federal income tax. When a fund invests in these
obligations, its tax-equivalent yields will be lower. In the table
above, tax-equivalent yields are calculated assuming investments are
100% federally tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect
all aspects of a class's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the
class's NAV over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a
hypothetical historical investment in a class over a stated period,
and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline
in value had been constant over the period. For example, a cumulative
total return of 100% over ten years would produce an average annual
total return of 7.18%, which is the steady annual rate of return that
would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a class's
performance is not constant over time, but changes from year to year,
and that average annual total returns represent averaged figures as
opposed to the actual year-to-year performance of the class.
In addition to average annual total returns, a class may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions
to total return. Total returns may be quoted on a before-tax or
after-tax basis and may be quoted with or without taking each
fund's maximum sales charge into account. Excluding a fund's sales
charge from a total return calculation produces a higher total return
figure. Total returns, yields, and other performance information
may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following tables show 7-day
yields and total returns for each class of Prime Fund, Treasury Fund
and Tax-Exempt Fund and the tax-equivalent yield for each class of
Tax-Exempt Fund for the period ended October 31, 1997. Capital
Reserves Class of each fund commenced operations on October 31, 1997.
Capital Reserves Class returns prior to that date are those of Daily
Money Class, the original class of each fund, which did not have a
12b-1 fee until May 31, 1997. Returns from May 31, 1997 through
October 31, 1997 reflect a 12b-1 fee of 0.25%. If Capital Reserves
Class's 12b-1 fee had been reflected, total returns would have been
lower. Effective May 31, 1997, Daily Money Class shares pay a 12b-1
fee of 0.25%. If the Daily Money Class's 12b-1 fee had been reflected,
returns prior to May 31, 1997 would have been lower. Class B of
Treasury Fund commenced operations on July 1, 1994. Class B's returns
prior to that date are those of Daily Money Class, the original class
of the fund which did not have a 12b-1 fee at that time. If Class B's
12b-1 fee had been reflected, total returns prior to July 1, 1994
would have been lower. Class C of Treasury Fund commenced operations
on November 3, 1997. Class C returns prior to that date are those of
Class B which reflect a 12b-1 fee of 1.00%. The initial offering of
Class B began on July 1, 1994. Class C returns prior to July 1, 1994
are those of Daily Money Class, the original class of the fund, which
did not have a 12b-1 fee at that time. If Class C's 12b-1 fee had been
reflected, total returns prior to July 1, 1994 would have been
lower.
Tax-Exempt Fund's tax-equivalent yield is based on a __% federal
income tax rate.

<TABLE>
<CAPTION>
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AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SEVEN-DAY TAX- ONE FIVE TEN ONE FIVE TEN
YIELD EQUIVALENT YEAR YEARS YEARS/ YEAR YEARS YEARS/
YIELD LIFE OF LIFE OF
FUND* FUND*

PRIME FUND - % N/A % % % % % %
CAPITAL RESERVES
CLASS

PRIME FUND - % N/A % % % % % %
DAILY MONEY
CLASS

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SEVEN-DAY TAX- ONE FIVE TEN ONE FIVE TEN
YIELD EQUIVALENT YEAR YEARS YEARS/ YEAR YEARS YEARS/
YIELD LIFE OF LIFE OF
FUND* FUND*

TREASURY FUND - % N/A % % % % % %
CAPITAL RESERVES
CLASS

TREASURY FUND - % N/A % % % % % %
DAILY MONEY
CLASS

TREASURY FUND - % N/A % % % % % %
ADVISOR B CLASS

TREASURY FUND - % N/A % % % % % %
ADVISOR C CLASS

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax- One Five Ten One Five Ten
Yield Equivalent Year Years Years/ Year Years Years/
Yield Life of Life of
Fund* Fund*

Tax-Exempt Fund % % % % % % % %
Capital Reserves
Class

Tax-Exempt Fund % % % % % % % %
Daily Money
Class

</TABLE>

If FMR had not reimbursed certain fund expenses during these periods,
each fund's total returns would have been lower and the 7-day yields
for the period ended _____________ would have been:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
7-day Yield Tax-Equivalent Yield

Prime Fund - Capital Reserves Class % N/A

Prime Fund - Daily Money Class % N/A

Treasury Fund - Capital Reserves Class % N/A

Treasury Fund - Daily Money Class % N/A

Treasury Fund - Advisor B Class % N/A

Treasury Fund - Advisor C Class % N/A

Tax-Exempt Fund - Capital Reserves Class % %

Tax-Exempt Fund - Daily Money Class % %

</TABLE>

The following tables show the income and capital elements of each
class's cumulative total return. The tables compare each class's
return to the record of the Standard & Poor's 500 Index (S&P 500), the
Dow Jones Industrial Average (DJIA), and the cost of living, as
measured by the Consumer Price Index (CPI), over the same period. The
CPI information is as of the month-end closest to the initial
investment date for each class. The S&P 500 and DJIA comparisons are
provided to show how each class's total return compared to the record
of a broad unmanaged index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Because each fund invests in short-term fixed-income
securities, common stocks represent a different type of investment
from the funds. Common stocks generally offer greater growth potential
than the funds, but generally experience greater price volatility,
which means greater potential for loss. In addition, common stocks
generally provide lower income than fixed-income investments such as
the funds. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike each class's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each class of each fund during the past 10
fiscal years ended 1997 or life of each fund, as applicable, assuming
all distributions were reinvested. The figures below reflect the
fluctuating interest rates of the specified periods and should not be
considered representative of the dividend income or capital gain or
loss that could be realized from an investment in a class today. Tax
consequences of different investments have not been factored into the
figures below.
PRIME FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Capital Reserves Class of Prime
Fund would have grown to $______.
INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year/Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

*From __________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Prime Fund on __________ the net amount invested in
Capital Reserves Class shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends.
The fund did not distribute any capital gains during the period.
Capital Reserves class of Prime Fund commenced operations on
October 31, 1997 . Capital Reserves class returns for the fund
prior to that date are those of Daily Money Class, the original class
of the fund, which did not have a 12b-1 fee until May 31, 1997.
Returns from May 31, 1997 through October 31, 1997 reflect a
12b-1 fee of 0.25%. If Capital Reserves Class's 12b-1 fee had been
reflected, returns would have been lower.
PRIME FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Daily Money Class of Prime Fund
would have grown to $______.
INDICES

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From _________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Daily
Money Class of Prime Fund on ____________, the net amount invested in
Daily Money Class shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends.
The fund did not distribute any capital gains during the period.
Effective May 31, 1997, Daily Money Class shares of Prime Fund pay a
12b-1 fee of 0.25%. If Daily Money Class's 12b-1 fee had been
reflected, returns prior to May 31, 1997 would have been lower.
TREASURY FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Capital Reserves Class of Treasury
Fund would have grown to $______.
INDICES

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From ________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Treasury Fund on ________ the net amount invested in
Capital Reserves Class shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends.
The fund did not distribute any capital gains during the period.
Capital Reserves class of Treasury Fund commenced operations on
October 31. 1997. Capital Reserves class returns for the fund prior to
that date are those of Daily Money Class, the original class of the
fund, which did not have a 12b-1 fee until May 31, 1997. Returns from
May 31, 1997 through October 31, 1997 reflect a 12b-1 fee of 0.25%.
If Capital Reserves Class's 12b-1 fee had been reflected, returns
would have been lower.
TREASURY FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Daily Money Class of Treasury Fund
would have grown to $______.
INDICES

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From _______ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Advisor B
Class of Treasury Fund on __________, the net amount invested in
Advisor B Class shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $______. If distributions
had not been reinvested, the amount of distributions earned from the
class over time would have been smaller, and cash payments for the
period would have amounted to $______ for dividends. The fund did not
distribute any capital gains during the period. Class B of Treasury
Fund commenced operations on July 1, 1994. Class B's returns prior to
that date are those of Daily Money Class, the original class of the
fund which did not have a 12b-1 fee that time. If Class B's 12b-1 fee
had been reflected, returns prior to July 1, 1994 would have been
lower.
TREASURY FUND - ADVISOR C CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Advisor C Class of Treasury Fund
would have grown to $______.
INDICES

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From ___________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Advisor C
Class of Treasury Fund on __________, the net amount invested in
Advisor C Class shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $______. If distributions
had not been reinvested, the amount of distributions earned from the
class over time would have been smaller, and cash payments for the
period would have amounted to $______ for dividends. The fund did not
distribute any capital gains during the period. Class C of Treasury
Fund commenced operations on November 3, 1997. Class C returns prior
to that date are those of Class B which reflect a 12b-1 fee of 1.00%.
The initial offering of Class B began on July 1, 1994. Class C returns
prior to July 1, 1994 are those of Daily Money Class, the original
class of the fund, which did not have a 12b-1 fee at that time. If
Class C's 12b-1 fee had been reflected, returns prior to July 1, 1994
would have been lower.
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Capital Reserves Class of
Tax-Exempt Fund would have grown to $______.
INDICES

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From ____________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Tax-Exempt Fund on __________, the net amount
invested in Capital Reserves Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $______. If distributions had not been reinvested, the amount of
distributions earned from the class over time would have been smaller,
and cash payments for the period would have amounted to $______ for
dividends. The fund did not distribute any capital gains during the
period. Capital Reserves class of Tax-Exempt Fund commenced
operations on October 31. 1997. Capital Reserves class returns for the
fund prior to that date are those of Daily Money Class, the original
class of the fund, which did not have a 12b-1 fee until May 31, 1997.
Returns from May 31, 1997 through October 31, 1997 reflect a 12b-1 fee
of 0.25%. If Capital Reserves Class's 12b-1 fee had been reflected,
returns would have been lower.
TAX-EXEMPT FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the the 10-year period ended October 31, 1997 , a
hypothetical $10,000 investment in Daily Money Class of Tax-Exempt
Fund would have grown to $______.
INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
[Year/Period] Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

19__ $ $ $ $ $ $ $

19__* $ $ $ $ $ $ $

</TABLE>

* From __________ (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Daily
Money Class of Tax-Exempt Fund on __________, the net amount invested
in Daily Money Class shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the class over time would have been smaller, and cash
payment s for the period would have amounted to $______ for
dividends. The fund did not distribute any capital gains during the
period. Effective May 31, 1997, Daily Money Class shares of Tax-Exempt
Fund pay a 12b-1 fee of 0.25%. If Daily Money Class's 12b-1 fee had
been reflected, returns prior to May 31, 1997 would have been
lower.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. Lipper may also rank
funds based on yield. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market
mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, the fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates total returns in
the same method as the funds. The funds may also compare performance
to that of other compilations or indices that may be developed and
made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC Financial Data, Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. IBC's MONEY FUND REPORT AVERAGES(trademark)/Government,
which is reported in IBC's MONEY FUND REPORT(trademark), covers over
___ government money market funds; IBC's MONEY FUND REPORT
AVERAGES(trademark)/All Taxable, which is reported in IBC's MONEY FUND
REPORT(trademark), covers over ___ taxable money market funds; and
IBC's MONEY FUND REPORT AVERAGES(trademark)/All Tax-Free, which is
reported in IBC's MONEY FUND REPORT(trademark), covers over ___
tax-free money market funds.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals;
charitable giving; and the Fidelity credit card. In addition, Fidelity
may quote or reprint financial or business publications and
periodicals as they relate to current economic and political
conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity
may also reprint, and use as advertising and sales literature,
articles from Fidelity Focus(Registered trademark), a quarterly
magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of October 31, 1997 , FMR advised over $__ billion in
tax-free fund assets, $__ billion in money market fund assets, $___
billion in equity fund assets, $__ billion in international fund
assets, and $___ billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.
In addition to performance rankings, each class may compare its total
expense ratio to the average total expense ratio of similar funds
tracked by Lipper. A class's total expense ratio is a significant
factor in comparing bond and money market investments because of its
effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing a class's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, each fund is
required to give shareholders at least 60 days' notice prior to
terminating or modifying its exchange privilege. Under the Rule, the
60-day notification requirement may be waived if (i) the only effect
of a modification would be to reduce or eliminate an administrative
fee, redemption fee or deferred sales charge ordinarily payable at the
time of exchange, or (ii) a fund suspends the redemption of the shares
to be exchanged as permitted under the 1940 Act or the rules and
regulations thereunder, or a fund to be acquired suspends the sale of
its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
In its prospectus, each fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse
exchange purchases by any person or group if, in FMR's judgment, the
fund would be unable to invest effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
ADVISOR CLASS B AND CLASS C WAIVERS. The contingent deferred sales
charge (CDSC) on Class B shares and Class C shares may be waived (1)
in the case of disability or death, provided that the shares are
redeemed within one year following the death or the initial
determination of disability; (2) in connection with a total or partial
redemption related to certain distributions from retirement plans or
accounts at age 70 1/2 which are permitted without penalty pursuant to
the Internal Revenue Code; or (3) in connection with redemptions
through the Fidelity Advisor Systematic Withdrawal Program.
A sales load waiver form must accompany these transactions.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM. If you own Advisor B
Class shares or Advisor C Class shares worth $10,000 or more you can
have monthly or quarterly checks sent from your account to you, to a
person named by you, or to your bank checking account. Aggregate
redemptions per 12-month period from your Class B or Class C account
may not exceed 10% of the value of the account and are not subject to
a CDSC; and you may set your withdrawal amount as a percentage of the
value of your account or a fixed dollar amount. Your Systematic
Withdrawal Program payments are drawn from Class B share or Class C
share redemptions. If Systematic Withdrawal Plan redemptions exceed
income dividends earned on your shares, your account eventually may be
exhausted.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your
distributions at the then-current NAV. All subsequent distributions
will then be reinvested until you provide Fidelity with alternate
instructions.
DIVIDENDS. Because each fund's income is primarily derived from
interest, dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders. A
portion of each fund's dividends derived from certain U.S. Government
obligations may be exempt from state and local taxation.
To the extent that a fund's income is designated as federally
tax-exempt interest, the daily dividends declared by the fund are also
federally tax-exempt. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received
deduction. These gains will be taxed as ordinary income.
Each fund will send each shareholder a notice in January describing
the tax status of dividend and capital gain distributions (if any) for
the prior year.
Shareholders are required to report tax-exempt income on their federal
tax returns. Shareholders who earn other income, such as Social
Security benefits, may be subject to federal income tax on up to 85%
of such benefits to the extent that their income, including tax-exempt
income, exceeds certain base amounts.
Tax-Exempt Fund purchases municipal securities whose interest FMR
believes is free from federal income tax. Generally, issuers or other
parties have entered into covenants requiring continuing compliance
with federal tax requirements to preserve the tax-free status of
interest payments over the life of the security. If at any time the
covenants are not complied with, or if the IRS determines that the
issuer did not comply with relevant tax requirements, interest
payments from a security could become federally taxable retroactive to
the date the security was issued. For certain types of structured
securities, the tax status of the pass-through of tax-free income may
also be based on the federal tax treatment of the structure.
As a result of the Tax Reform Act of 1986, interest on certain
"private activity" securities is subject to the federal alternative
minimum tax (AMT), although the interest continues to be excludable
from gross income for other tax purposes. Interest from private
activity securities will be considered tax-exempt for purposes of
Tax-Exempt Fund's policy of investing so that at least 80% of its
income distributions is free from federal income tax. Interest from
private activity securities is a tax preference item for the purposes
of determining whether a taxpayer is subject to the AMT and the amount
of AMT to be paid, if any. Private activity securities issued after
August 7, 1986 to benefit a private or industrial user or to finance a
private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after
April 30, 1993 and short-term capital gains distributed by the fund
are taxable to shareholders as dividends, not as capital gains.
Dividend distributions resulting from a recharacterization of gain
from the sale of bonds purchased with market discount after April 30,
1993 are not considered income for the purposes of Tax-Exempt Fund's
policy of investing so that at least 80% of its income distribution is
free from federal income tax. Tax-Exempt Fund may distribute any net
realized short-term capital gains and taxable market discount once a
year or more often, as necessary, to maintain its net asset value at
$1.00 per share.
It is the current position of the staff of the SEC that a fund that
uses the term "tax-exempt" in its name may not derive more than 20% of
its income from municipal obligations that pay interest that is a
preference item for purposes of the AMT. According to this position,
at least 80% of Tax-Exempt Fund's income would have to be exempt from
the AMT as well as from federal income taxes.
Corporate investors should note that a tax preference item for the
purposes of the corporate AMT is 75% of the amount by which adjusted
current earnings (which includes tax-exempt interest) exceed the
alternative minimum taxable income of the corporation. If a
shareholder receives an exempt-interest dividend and sells shares at a
loss after holding them for a period of six months or less, the loss
will be disallowed to the extent of the amount of the exempt-interest
dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury Fund and
Prime Fund do not anticipate earning long-term capital gains on
securities held by each fund. Tax-Exempt Fund does not anticipate
distributing long-term capital gains.
As of the fiscal year ended October 31, 1997 , Prime Fund had a
capital loss carryforward aggregating approximately $____. The loss
carryforward for Prime Fund will expire on _______ and is available to
offset future capital gains.
As of the fiscal year ended October 31, 1997 , Treasury Fund had
a capital loss carryforward aggregating approximately $______. The
loss carryforward for Treasury Fund will expire on ________ and is
available to offset future capital gains.
As of the fiscal year ended October 31, 1997 , Tax-Exempt Fund
had a capital loss carryforward aggregating approximately $______. The
loss carryforward for Tax-Exempt Fund will expire on _________ and is
available to offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business
trusts, state law provides for a pass-through of the state and local
income tax exemption afforded to direct owners of U.S. Government
securities. Some states limit this to mutual funds that invest a
certain amount in U.S. Government securities, and some types of
securities, such as repurchase agreements and some agency backed
securities, may not qualify for this benefit. The tax treatment of
your dividend distributions from a fund will be the same as if you
directly owned your proportionate share of the U.S. Government
securities in the fund's portfolio. Because the income earned on most
U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the
fund attributable to these securities will also be free from income
taxes. The exemption from state and local income taxation does not
preclude states from assessing other taxes on the ownership of U.S.
Government securities. In a number of states, corporate franchise
(income) tax laws do not exempt interest earned on U.S. Government
securities whether such securities are held directly or through a
fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains with respect to
foreign securities. If, at the close of its fiscal year, more than 50%
of a fund's total assets are invested in securities of foreign
issuers, the fund may elect to pass through foreign taxes paid and
thereby allow shareholders to take a credit or deduction on their
individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company
and avoid being subject to federal income or excise taxes at the fund
level, each fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar
year as well as on a fiscal year basis and intends to comply with
other tax rules applicable to regulated investment companies.
Each fund is treated as a separate entity from the other funds of its
respective Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. Except as indicated, each individual has
held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who
are "interested persons" by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of FMR Texas Inc., Fidelity Management & Research (U.K.)
Inc., and Fidelity Management & Research (Far East) Inc.
J. GARY BURKHEAD (55), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President and Chief Executive Officer of the Fidelity
Institutional Group (1997). Previously, Mr. Burkhead served as
President of Fidelity Management & Research Company.
RALPH F. COX (64), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (53), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is currently a Trustee for the Forum For
International Policy, a Board Member for the Virginia Neurological
Institute, and a Senior Advisor of the Harvard Journal of World
Affairs. In addition, Mr. Gates also serves as a member of the
corporate board for LucasVarity PLC (automotive components and diesel
engines), Charles Stark Draper Laboratory (non-profit), NACCO
Industries, Inc. (mining and manufacturing), and TRW Inc. (original
equipment and replacement products).
E. BRADLEY JONES (69), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been
a member of the Executive Committee as well as Chairman of the Board
and President , a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (64), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association, a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (63), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (68), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (64), Trustee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of FMR Texas Inc. (1997), Fidelity Management & Research
(U.K.) Inc. (1997), and Fidelity Management & Research (Far East) Inc.
(1997). Previously, Mr. Pozen served as General Counsel, Managing
Director, and Senior Vice President of FMR Corp.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a
Director of ConAgra, Inc. (agricultural products), Georgia Power
Company (electric utility), National Life Insurance Company of
Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants,
1992).
BOYCE I. GREER (40), is Vice President of Money Market Funds
(1997), Group Leader of the Money Market Group (1997), and Senior Vice
President of FMR (1997). Mr. Greer served as the Leader of the
Fixed-Income Group for Fidelity Management Trust Company (1993-1995)
and was Vice President and Group Leader of Municipal Fixed-Income
Investments (1996-1997). Prior to 1993, Mr. Greer was an associate
portfolio manager.
FRED L. HENNING, JR. (57), is Vice President of Fidelity's
Fixed-Income Group (1995) and Senior Vice President of FMR (1995).
Before assuming his current responsibilities, Mr. Henning was head of
Fidelity's Money Market Division.
ROBERT K. DUBY (50), Vice President of Prime Fund (1996), is Vice
President of other funds advised by FMR and an employee of FMR Texas
Inc.
ROBERT LITTERST (37), Vice President of Treasury Fund (1997), is Vice
President of other funds advised by FMR and an employee of FMR Texas,
Inc.
SCOTT A. ORR (34), Vice President of Tax-Exempt Fund (1995), is Vice
President of other funds advised by FMR and an employee of FMR Texas
Inc.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
RICHARD A. SILVER (49), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
THOMAS D. MAHER (51), Assistant Vice President, is Assistant Vice
President of Fidelity's municipal bond funds (1996) and of Fidelity's
money market funds and Vice President and Associate General Counsel of
FMR Texas Inc.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THOMAS J. SIMPSON (38), Assistant Treasurer, is Assistant Treasurer of
Fidelity's municipal bond funds (1996) and of Fidelity's money market
funds (1996) and an employee of FMR (1996). Prior to joining FMR, Mr.
Simpson was Vice President and Fund Controller of Liberty Investment
Services (1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended October 31, 1997 , or
calendar year ended December 31, 1996, as applicable.
COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
and Compensation Compensation Compensation Compensation
Members of the Advisory Board from from from Tax-Exempt from the
Prime Fund B,C Treasury Fund B,E Fund Complex*
Fund B,D A

J. Gary Burkhead ** $ $ $ $

Ralph F. Cox $ $ $

Phyllis Burke Davis $ $ $

Richard J. Flynn*** $ $ $

Robert M. Gates **** $ $ $

Edward C. Johnson 3d ** $ $ $

E. Bradley Jones $ $ $

Donald J. Kirk $ $ $

Peter S. Lynch ** $ $ $

William O. McCoy***** $ $ $

Gerald C. McDonough $ $ $

Edward H. Malone*** $ $ $

Marvin L. Mann $ $ $

Robert C. Pozen** $ $ $

Thomas R. Williams $ $ $

</TABLE>

* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of
Trustees through December 31, 1996.
****Mr. Gates was elected to the Board of Trustees of Newbury
Street Trust on May 9, 1997.
*****During the period from May 1, 1996 through December 31, 1996,
William O. McCoy served as a Member of the Advisory Board of the
trust. Mr. McCoy was elected to the Board of Trustees of Newbury
Street Trust on May 9, 1997.
A Compensation figures include cash, a pro rata portion of benefits
accrued under the retirement program for the period ended December 30,
1996 and required to be deferred, and may include amounts deferred at
the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $__, Phyllis Burke Davis, $__, Richard J. Flynn, $0, Robert M.
Gates, $__, E. Bradley Jones, $__, Donald J. Kirk, $__, William O.
McCoy, $__, Gerald C. McDonough, $__, Edward H. Malone, $__, Marvin L.
Mann, $__, and Thomas R. Williams, $__.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $__, Phyllis Burke Davis, $__, Richard J. Flynn, $0, Robert M.
Gates, $__, E. Bradley Jones, $__, Donald J. Kirk, $__, William O.
McCoy, $__, Gerald C. McDonough, $__, Edward H. Malone, $__, Marvin L.
Mann, $__, and Thomas R. Williams, $__.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $__, Phyllis Burke Davis, $__, Richard J. Flynn, $0, Robert M.
Gates, $__, E. Bradley Jones, $__, Donald J. Kirk, $__, William O.
McCoy, $__, Gerald C. McDonough, $__, Edward H. Malone, $__, Marvin L.
Mann, $__, and Thomas R. Williams, $__.
F For the fiscal year ended _____, 199_, certain of the non-interested
Trustees' aggregate compensation from [the/a] fund includes accrued
voluntary deferred compensation as follows: [trustee name, dollar
amount of deferred compensation, fund name]; [trustee name, dollar
amount of deferred compensation, fund name]; and [trustee name, dollar
amount of deferred compensation, fund name].

Under a retirement program adopted in July 1988 and modified in
November 1995 and November 1996, each non-interested Trustee who
retired before December 30, 1996 may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees
and length of service. The obligation of a fund to make such payments
is neither secured nor funded. A Trustee became eligible to
participate in the program at the end of the calendar year in which he
or she reached age 72, provided that, at the time of retirement, he or
she had served as a Fidelity fund Trustee for at least five years.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are treated as though equivalent dollar amounts had been invested
in shares of a cross-section of Fidelity funds including funds in each
major investment discipline and representing a majority of Fidelity's
assets under management (the Reference Funds). The amounts ultimately
received by the Trustees under the Plan will be directly linked to the
investment performance of the Reference Funds. Deferral of fees in
accordance with the Plan will have a negligible effect on a fund's
assets, liabilities, and net income per share, and will not obligate a
fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In
connection with the termination of the retirement program, each
then-existing non-interested Trustee received a credit to his or her
Plan account equal to the present value of the estimated benefits that
would have been payable under the retirement program. The amounts
credited to the non-interested Trustees' Plan accounts are subject to
vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately
received by the Trustees in connection with the credits to their Plan
accounts will be directly linked to the investment performance of the
Reference Funds. The termination of the retirement program and
related crediting of estimated benefits to the Trustees' Plan accounts
did not result in a material cost to the funds.
As of _____, 1997, approximately __%, ___% and ___%, respectively of
Prime Fund's, Treasury Fund's' and Tax-Exempt Fund's total outstanding
shares was held by an FMR affiliates. FMR Corp. is the ultimate parent
company of this FMR affiliates. By virtue of his ownership interest in
FMR Corp., as described in the "FMR" section on page ___, Mr. Edward
C. Johnson 3d, President and Trustee of the fund, may be deemed to be
a beneficial owner of these shares. As of the above date, with the
exception of Mr. Johnson 3d's deemed ownership of Prime Fund, Treasury
Fund and Tax-Exempt Fund's shares, the Trustees, Members of the
Advisory Board, and officers of the funds owned, in the aggregate,
less than __% of each fund's total outstanding shares.
As of ____,1997, the Trustees, Members of the Advisory Board, and
officers of each fund owned, in the aggregate, less than __% of each
fund's total outstanding shares.
As of ____, 1997, the following owned of record or beneficially 5% or
more of a fund's outstanding shares:
A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
FMR is manager of Prime Fund, Treasury Fund and Tax-Exempt Fund
pursuant to management contracts dated May 30, 1997, which were
approved by shareholders of each fund on May 9, 1997.
Prior to May 30, 1997, FMR was each fund's manager pursuant to
management contracts dated September 30, 1993 for Prime Fund and
Treasury Fund, and December 30, 1991 for Tax-Exempt Fund, which were
approved by shareholders of Prime Fund and Treasury Fund on March 24,
1993 and shareholders of Tax-Exempt Fund on October 31, 1991.
MANAGEMENT SERVICES. Each fund employs FMR to furnish
investment advisory and other services. Under the terms of its
management contract with each fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all
necessary office facilities and personnel for servicing the fund's
investments, compensates all officers of each fund and all Trustees
who are "interested persons" of the trust or of FMR, and all personnel
of each fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee
payable to FMR and the fees payable to the transfer, dividend
disbursing, and shareholder servicing agent, and pricing and
bookkeeping agent each fund or each class thereof, as applicable, pays
all of its expenses that are not assumed by those parties. Each fund
pays for the typesetting, printing, and mailing of its proxy materials
to shareholders, legal expenses, and the fees of the custodian,
auditor and non-interested Trustees. Each fund's management contract
further provides that the fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices,
and reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders of the applicable
classes. Other expenses paid by each fund, or each class thereof, as
applicable, include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under each management
contract, each fund pays FMR a monthly management fee at the annual
rate of 0.25% of its average net assets throughout the month.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years.
Fund
Fiscal Years Ended Management Fees
Paid to FMR **

Prime Fund 10/31/97 $

10/31/96* $

7/31/96 $

7/31/95 $

Treasury Fund 10/31/97 $

10/31/96* $

7/31/96 $

7/31/95 $

Tax-Exempt Fund 10/31/97 $

10/31/96 $

10/31/95 $

* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Prime Fund and Treasury Fund changed from July 31 to
October 31 in October 1996.
** Management fees paid to FMR reflect the management fee rate of
0.50% that was in effect for each fund prior to May 31, 1997. Only a
portion of this fee was retained by FMR. The remainder was paid to
FDC in connection with each fund's Distribution and Service Plan.
FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase a class's total returns
and yield, and repayment of the reimbursement by a class will lower
its total returns and yield.
During the past three fiscal periods, FMR voluntarily agreed, subject
to revision or termination, to reimburse certain of the classes if and
to the extent that its aggregate operating expenses, including
management fees, were in excess of an annual rate of its average net
assets. The tables below show the periods of reimbursement and levels
of expense limitations for the applicable classes; the dollar amount
of management fees incurred under each fund's contract before
reimbursement; and the dollar amount of management fees reimbursed by
FMR under the expense reimbursement for each period.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Aggregate
Operating Fiscal Years Management Fee Amount of
Expense Ended Before Management Fee
Limitation October 31, Reimbursement Reimbursement

Prime Fund- Daily % 1997 $[*] $
Money Class

% 1996* $[*] $

% July 31, 1996* $[*] $

% July 31, 1995* $[*] $

Aggregate
Operating Fiscal Years Management Fee Amount of
Expense Ended Before Management Fee
Limitation October 31, Reimbursement Reimbursement

Treasury Fund- Daily % 1997 $[*] $
Money Class

% 1996* $[*] $

% July 31, 1996* $[*] $

% July 31, 1995* $[*] $

Aggregate
Operating Fiscal Years Management Fee Amount of
Expense Ended Before Management Fee
Limitation October 31, Reimbursement Reimbursement

Tax-Exempt Fund- % 1997 $[*] $
Daily Money Class

1996 $[*] $

1995 $[*] $

</TABLE>

Periods of Aggregate

Expense Limitation Operating Fiscal Years Management Fee Amount of

From To Expense Ended Before Management Fee

Limitation October 31, Reimbursement Reimbursement

Treasury Fund - January 1, - 1.40% 1997 $[*] $

Advisor B Class 1997

July 1, 1994 December 31, 1.35% 1996* $[*] $

1996

July 31, 1996 $[*] $

July 31, 1995 $[*] $

</TABLE>

* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Prime Fund and Treasury Fund changed from July 31 to
October 31 in October 1996.
SUB-ADVISER. FMR has entered into sub-advisory agreements with FMR
Texas pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to the funds.
Under the terms of the sub-advisory agreements, dated May 30, 1997 for
Prime Fund and Treasury Fund and approved by Daily Money Fund as the
then sole shareholder of each fund in conjunction with an agreement
and plan of reorganization approved by shareholders of each fund on
May 9, 1997, and dated December 30, 1991 for Tax-Exempt Fund and
approved by shareholders on October 23, 1991, FMR pays FMR Texas fees
equal to 50% of the management fee payable to FMR under its management
contract with each fund. For Prime Fund and Treasury Fund, aside from
reflecting each fund's reorganization from one Delaware business trust
to another, each contract is substantially identical to each fund's
prior contract dated September 30, 1993 and approved by shareholders
on March 24, 1993. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
Fees paid to FMR Texas by FMR on behalf of Prime Fund, Treasury Fund
and Tax-Exempt Fund for the past three fiscal years are shown in the
table below.
Fund Fiscal Year Ended Fees Paid to FMR Texas

Prime Fund 10/31/97 $

10/31/96* $

7/31/96 $

7/31/95 $

Treasury Fund 10/31/97 $

10/31/96* $

7/31/96 $

7/31/95 $

Tax-Exempt Fund 10/31/97 $

10/31/96 $

10/31/95 $

* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Prime Fund and Treasury Fund changed from July 31 to
October 31 in October 1996.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of
Capital Reserves Class and Daily Money Class of Prime Fund, Treasury
Fund and Tax-Exempt Fund and Advisor B Class and Advisor C Class of
Treasury Fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act
(the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow Capital Reserves Class,
Daily Money Class, Advisor B Class and Advisor C Class of the funds
and FMR to incur certain expenses that might be considered to
constitute direct or indirect payment by the funds of distribution
expenses.
Pursuant to each Capital Reserves Class Plan, FDC is paid a monthly
distribution fee at an annual rate of 0.50% of Capital Reserves
Class's average net assets determined at the close of business on each
day throughout the month. FDC may compensate intermediaries that
provide shareholder support services, engage in the sale of Capital
Reserves Class shares, or to pay distribution expenses, at an annual
rate of up to 0.50% of the average net assets they maintain.
Pursuant to each Daily Money Class Plan, FDC is paid a monthly
distribution fee at an annual rate of 0.25% of Daily Money Class's
average net assets determined at the close of business on each day
throughout the month. FDC may compensate intermediaries that provide
shareholder support services, engage in the sale of Daily Money Class
shares, or to pay distribution expenses, at an annual rate of up to
0.25% of the average net assets they maintain.
Pursuant to the Advisor B Class Plan, FDC is paid a monthly
distribution fee at an annual rate of 0.75% of Advisor B Class's
average net assets determined at the close of business on each day
throughout the month. Advisor B Class also pays investment
professionals a service fee at an annual rate of 0.25% of its average
daily net assets determined at the close of business on each day
throughout the month for the personal service and/or maintenance of
shareholder accounts.
Pursuant to the Advisor C Class Plan, FDC is paid a monthly
distribution fee at an annual rate of 0.75% of Advisor C Class's
average net assets determined at the close of business on each day
throughout the month. Advisor C Class also pays FDC a service fee at
an annual rate of 0.25% of its average daily net assets determined at
the close of business on each day throughout the month.
Currently, for the first year of investment, the full amount of
distribution fees paid by Class C is retained by FDC as compensation
for its services and expenses in connection with the distribution of
Class C shares, and the full amount of service fees paid by Class C is
retained by FDC for providing personal service to and/or maintenance
of Class C shareholder accounts. After the first year of investment,
the full amount of distribution fees paid by Class C is reallowed to
investment professionals (including FDC) as compensation for their
services in connection with the distribution of Class C shares, and
the full amount of service fees paid by Class C is reallowed to
investment professionals (including FDC) for providing personal
service to and/or maintenance of Class C shareholder accounts.
For the fiscal year ended October 31, 1997, fiscal period ended
October 31, 1996 and the fiscal years ended July 31, 1996 and 1995,
Prime Fund - Daily Money Class paid FDC distribution fees of $______,
$________, $________, and $_______, respectively, all of which was
paid to investment professionals / retained by FDC / of which $____,
$______, $_______ and $______ was retained by FDC. Payments made by
FMR through FDC to third parties for the fiscal year ended October 31,
1997 amounted to $_____. FMR made no payments through FDC to third
parties for the fiscal year ended 1997
For the fiscal year ended October 31, 1997, fiscal period ended
October 31, 1996 and the fiscal years ended July 31, 1996 and 1995,
Treasury Fund - Daily Money Class paid FDC distribution fees of
$______, $________, $________, and $_______, respectively, all of
which was paid to investment professionals / retained by FDC / of
which $____, $______, $_______ and $______ was retained by FDC.
Payments made by FMR through FDC to third parties for the fiscal year
ended October 31, 1997 amounted to $_____. FMR made no payments
through FDC to third parties for the fiscal year ended 1997
For the fiscal year ended October 31, 1997, 1996 and 1995,
Tax-Exempt Fund - Daily Money Class paid FDC distribution fees of
$________, $________, and $_______, respectively, all of which was
paid to investment professionals / retained by FDC / of which $______,
$_______ and $______ was retained by FDC. Payments made by FMR through
FDC to third parties for the fiscal year ended October 31, 1997
amounted to $_____. FMR made no payments through FDC to third parties
for the fiscal year ended 1997
For the fiscal year ended October 31, 1997, fiscal period ended
October 31, 1996 and the fiscal years ended July 31, 1996 and 1995,
Prime Fund - Capital Reserves Class paid FDC distribution fees of
$______, $________, $________, and $_______, respectively, all of
which was paid to investment professionals / retained by FDC / of
which $____, $______, $_______ and $______ was retained by FDC.
Payments made by FMR through FDC to third parties for the fiscal year
ended October 31, 1997 amounted to $_____. FMR made no payments
through FDC to third parties for the fiscal year ended 1997
For the fiscal year ended October 31, 1997, fiscal period ended
October 31, 1996 and the fiscal years ended July 31, 1996 and 1995,
Treasury Fund - Capital Reserves Class paid FDC distribution fees of
$______, $________, $________, and $_______, respectively, all of
which was paid to investment professionals / retained by FDC / of
which $____, $______, $_______ and $______ was retained by FDC.
Payments made by FMR through FDC to third parties for the fiscal year
ended October 31, 1997 amounted to $_____. FMR made no payments
through FDC to third parties for the fiscal year ended 1997
For the fiscal year ended October 31, 1997, 1996 and 1995,
Tax-Exempt Fund - Capital Reserves Class paid FDC distribution fees of
$________, $________, and $_______, respectively, all of which was
paid to investment professionals / retained by FDC / of which $______,
$_______ and $______ was retained by FDC. Payments made by FMR through
FDC to third parties for the fiscal year ended October 31, 1997
amounted to $_____. FMR made no payments through FDC to third parties
for the fiscal year ended 1997
For the fiscal year ended October 31, 1997 , the fiscal period
ended October 31, 1996, and the fiscal years ended July 31, 1996,
1995, Treasury Fund - Advisor B Class paid FDC distribution fees of
$________, $_________, $_________ and $________, respectively. In
addition, for the fiscal year ended October 31, 1997 , the
fiscal period ended October 31, 1996 and the fiscal years ended July
31, 1996 and 1995, Advisor B Class FDC paid shareholder service fees
of $_______, $_______, $________ and $________, respectively, all
of which was paid to investment professionals / retained by FDC / of
which $____, $____, $____,and $_______ was retained by FDC.
Under each class's Plan, if the payment of management fees by the fund
to FMR is deemed to be indirect financing by the fund of the
distribution of its shares, such payment is authorized by the Plan.
Each Capital Reserves Class, Daily Money Class, Advisor B Class and
Advisor C Class Plan specifically recognizes that FMR may use its
management fee revenue, as well as its past profits, or its other
resources, to pay FDC for expenses incurred in connection with the
distribution of the applicable class's shares, including payments made
to third parties that engage in the sale of the applicable class's
shares or to third parties, including banks, that render shareholder
support services. Currently, the Board of Trustees has authorized such
payments.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and
determined that there is a reasonable likelihood that each Plan will
benefit the applicable class of each fund and its shareholders. To the
extent that each Class's Plan gives FMR and FDC greater flexibility in
connection with the distribution of shares of the applicable class,
additional sales of fund shares may result. Furthermore, certain
shareholder support services may be provided more effectively under
the Plans by local entities with whom shareholders have other
relationships.
The Capital Reserves Class, Daily Money Class, Advisor B Class and
Advisor C Class Plans do not provide for specific payments by the
applicable class of any of the expenses of FDC, or obligate FDC or FMR
to perform any specific type or level of distribution activities or
incur any specific level of expense in connection with distribution
activities. After payments by FDC for advertising, marketing and
distribution, and payments to third parties, the amounts remaining, if
any, may be used as FDC may elect.
The Daily Money Class Plans were approved by shareholders of each fund
on May 9, 1997 and the Advisor B Class Plan was approved by
shareholders of Treasury Fund on May 9, 1997.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
Independent of the Capital Reserves Class Plans and Daily Money Class
Plans, intermediaries that maintain an average balance of $10 million
or more in a single omnibus account may receive an additional
recordkeeping fee of up to 0.15% of the assets they maintain. The
recordkeeping fee will be paid by FMR or its affiliates, will not be
paid by the funds, and will be considered a servicing expense by FMR.
CONTRACTS WITH FMR AFFILIATES
Prime Fund and Treasury Fund have entered into a transfer agent
agreement with FIIOC, an affiliate of FMR. Under the terms of the
agreements, FIIOC performs transfer agency, dividend disbursing, and
shareholder services for each class of each fund.
Tax-Exempt Fund has entered into a transfer agent agreement with UMB.
Under the terms of the agreement, UMB provides transfer agency,
dividend disbursing, and shareholder services for each class of the
fund. UMB in turn has entered into a sub-transfer agent agreements
with FIIOC. Under the terms of the sub-agreements, FIIOC performs all
processing activities associated with providing these services for
each class of Tax-Exempt Fund and receives all related transfer agency
fees paid to UMB.
For providing transfer agency services, FIIOC receives an annual
asset-based fee. This fee is subject to increase based on postal rate
changes.
FIIOC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FIIOC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Prime Fund and Treasury Fund have also entered into a service agent
agreement with FSC, an affiliate of FMR. Under the terms of the
agreements, FSC calculates the NAV and dividends for each class of
each fund and maintains each fund's portfolio and general accounting
records.
Tax-Exempt Fund has also entered into a service agent agreement with
UMB. Under the terms of the agreement, UMB provides pricing and
bookkeeping services for the fund. UMB in turn has entered into a
sub-service agent agreement with FSC. Under the terms of the
sub-agreement, FSC performs all processing activities associated with
providing these services, including calculating the NAV and dividends
for each class of the fund and maintaining the fund's portfolio and
general accounting records, and receives all related pricing and
bookkeeping fees paid to UMB.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month. The annual fee rates for pricing and bookkeeping services are
.0175% of the first $500 million of average net assets and .0075% of
average net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$40,000 and a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 1997 1996 1995

Prime Fund $ $ * $

Treasury Fund $ $ * $

Tax-Exempt Fund $ $ $

*For the period August 1, 1995 through October 31, 1996. The fiscal
year-end of Prime Fund and Treasury Fund changed form July 31 to
October 31 in October 1996.
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities
Dealers, Inc. The distribution agreements call for FDC to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at
NAV. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Each fund is a fund of Newbury Street Trust, an
open-end management investment company originally organized as a
Massachusetts business trust on July 16, 1982, pursuant to a
Declaration of Trust that was amended and restated on November 1,
1989. On December 30, 1991, the trust was converted to a Delaware
business trust pursuant to an agreement approved by shareholders on
October 23, 1991. The Delaware trust, which was organized on June 20,
1991 under the name Daily Tax-Exempt Money Fund II, succeeded to the
name Daily Tax-Exempt Money Fund on December 30, 1991 and succeeded to
the name Newbury Street Trust on May 30, 1997. Prior to May 30, 1997,
Prime Fund and Treasury Fund were funds of Daily Money Fund, an
open-end management investment company originally organized as a
Massachusetts business trust on June 7, 1982, pursuant to a
Declaration of Trust that was amended and restated on September 1,
1989. On September 29, 1993, Daily Money Fund was converted to a
Delaware business trust pursuant to an agreement approved by
shareholders on March 24, 1993. The Delaware Daily Money Fund trust,
which was organized on June 20, 1991 under the name Daily Money Fund
II, succeeded to the name Daily Money Fund on July 14, 1995.
Currently, there are three funds of Newbury Street Trust: Prime Fund,
Treasury Fund and Tax-Exempt Fund. The Trust Instrument permits the
Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the trust
or a fund, the right of the trust or fund to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one
fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to
such fund, and constitute the underlying assets of such fund. The
underlying assets of each fund are segregated on the books of account,
and are to be charged with the liabilities with respect to such fund
and with a share of the general expenses of the trust. Expenses with
respect to the trust are to be allocated in proportion to the asset
value of the respective funds, except where allocations of direct
expense can otherwise be fairly made. The officers of the trust,
subject to the general supervision of the Board of Trustees, have the
power to determine which expenses are allocable to a given fund, or
which are general or allocable to all of the funds. In the event of
the dissolution or liquidation of the trust, shareholders of each fund
are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust
organized under Delaware law. Delaware law provides that shareholders
shall be entitled to the same limitations of personal liability
extended to stockholders of private corporations for profit. The
courts of some states, however, may decline to apply Delaware law on
this point. The Trust Instrument contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
expenses of the trust and requires that a disclaimer be given in each
contract entered into or executed by the trust or the Trustees. The
Trust Instrument provides for indemnification out of each fund's
property of any shareholder or former shareholder held personally
liable for the obligations of the fund. The Trust Instrument also
provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the fund is
unable to meet its obligations. FMR believes that, in view of the
above, the risk of personal liability to shareholders is extremely
remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any
person other than the trust or its shareholders; moreover, the
Trustees shall not be liable for any conduct whatsoever, provided that
Trustees are not protected against any liability to which they would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the
conduct of their office. Claims asserted against one class of shares
may subject holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value
of net asset value you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Trust Instrument, call meetings of the trust or fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees.
The trust or any fund may be terminated upon the sale of its assets
to, or merger with, another open-end management investment company or
series thereof, or upon liquidation and distribution of its assets.
Generally such terminations must be approved by vote of the holders of
a majority of the trust or the fund, as determined by the current
value of each shareholder's investment in the fund or trust; however,
the Trustees may, without prior shareholder approval, change the form
of organization of the trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the trust and its
funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder
vote, cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated
under Delaware law, so long as the surviving entity is an open-end
management investment company that will succeed to or assume the trust
registration statement. Each fund may invest all of its assets in
another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York,
New York, is custodian of the assets of Prime Fund and Treasury Fund
(the taxable funds). UMB Bank, n.a., 1010 Grand Avenue, Kansas City,
Missouri, is custodian of the assets of Tax-Exempt Fund. Each
custodian is responsible for the safekeeping of a fund's assets and
the appointment of any subcustodian banks and clearing agencies. A
custodian takes no part in determining the investment policies of a
fund or in deciding which securities are purchased or sold by a fund.
However, a fund may invest in obligations of its custodian and may
purchase securities from or sell securities to its custodian. The
Chase Manhattan Bank headquartered in New York, also may serve as a
special purpose custodian of certain assets of the taxable funds in
connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITORS. _______________, 1999 Bryan Street, Dallas, Texas serves as
Prime Fund's and Treasury Fund's independent accountant.
________________, 1700 Pacific Avenue, Dallas, Texas serves as
Tax-Exempt Fund's independent accountant. The auditors examine
financial statements for the funds and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended October 31, 1997 and reports of the auditors,
are included in the funds' Annual Report, which is a separate report
supplied with this SAI. The funds' financial statements, including the
financial highlights, and reports of the auditors are incorporated
herein by reference. For a free additional copy of the funds' Annual
Report, contact Client Services at 1-800-843-3001, 82 Devonshire
Street, Boston, MA 02109, or your investment professional.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for short-term municipal obligations will be
designated Moody's Investment Grade ("MIG"). A two-component rating is
assigned to variable rate demand obligations. The first component
represents an evaluation of the degree of risk associated with
scheduled principal repayment and interest payments and is designated
by a long-term rating, e.g., "Aaa" or "A." The second component
represents an evaluation of the degree of risk associated with the
demand feature and is designated "VMIG."
MIG 1/VMIG 1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity
support, or demonstrated broad-based access to the market for
refinancing.
MIG 2/VMIG 2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES
Municipal notes maturing in three years or less will likely receive a
"note" rating symbol. Notes that have a put option or demand feature
are assigned a dual rating. The first rating addresses the likelihood
of repayment of principal and payment of interest due and for
short-term obligations is designated by a note rating symbol. The
second rating addresses only the demand feature, and is designated by
a commercial paper rating symbol, e.g., "A-1" or "A-2."
SP-1 - Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term
of the notes.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a
superior ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a
strong ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be
assigned a Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign
(+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1.
Newbury Street Trust
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. Financial Statements and Financial Highlights to be filed by
subsequent amendment.
(b) Exhibits:
1. (a) Trust Instrument for Daily Tax-Exempt Money Fund II,
dated June 20, 1991 was electronically filed and is incorporated
herein by reference to Exhibit 1(a) to Post-Effective Amendment No.
20.
(b) Certificate of Trust for Daily Tax-Exempt Money Fund II, dated
June 20, 1991, was electronically filed and is incorporated herein by
reference to Exhibit 1(b) to Post-Effective Amendment No. 17.
(c) Certificate of Amendment of Daily Tax-Exempt Money Fund II to
Daily Tax-Exempt Money Fund, dated January 29, 1992 was electronically
filed and is incorporated herein by reference to Exhibit 1(c) to
Post-Effective Amendment No. 26.
(d) Supplement to Trust Instrument of Daily Tax-Exempt Money Fund,
dated March 31, 1997, was electronically filed and is incorporated by
reference to Exhibit 1(d) to Post-Effective Amendment No. 29.
(e) Certificate of Amendment of Daily Tax-Exempt Money Fund to
Newbury Street Trust was electronically filed and is incorporated by
reference to Exhibit 1(e) to Post-Effective Amendment No. 30.
2. (a) ByLaws of the Trust effective June 20, 1991 were
electronically filed and are incorporated herein by reference to
Exhibit 2(a) to Fidelity Union Street Trust II's Post-Effective
Amendment No. 17.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract between Newbury Street Trust, on behalf
of Treasury Fund, and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 32.
(b) Sub-Advisory Agreement dated December 30, 1991, between Fidelity
Management & Research Co. and FMR Texas Inc. (with respect to Daily
Tax-Exempt Money Fund II (currently known as Tax-Exempt Fund)) was
electronically filed and is incorporated herein by reference to
Exhibit 5(b) to Post-Effective Amendment No. 25.
(c) Management Contract between Newbury Street Trust, on behalf of
Prime Fund, and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(c) to Post-Effective Amendment No.
32.
(d) Management Contract between Newbury Street Trust, on behalf of
Tax-Exempt Fund, and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(d) to Post-Effective
Amendment No. 32.
(e) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Prime Fund is incorporated
herein by reference to Exhibit 5(e) to Post-Effective Amendment No.
32.
(f) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Treasury Fund is
incorporated herein by reference to Exhibit 5(f) to Post-Effective
Amendment No. 32.
6. (a) General Distribution Agreement dated December 30, 1991,
between Daily Tax-Exempt Money Fund II and Fidelity Distributors
Corporation was electronically filed and is incorporated herein by
reference to Exhibit 6(a) to Post-Effective Amendment No. 25.
(b) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of Daily Tax-Exempt
Money Fund (currently known as Tax-Exempt Fund) was electronically
filed and is incorporated herein by reference to Exhibit 6(b) to
Post-Effective Amendment No. 25.
(c) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients"
with respect to shares of Daily Tax-Exempt Money Fund (currently known
as Tax-Exempt Fund) was electronically filed and is incorporated
herein by reference to Exhibit 6(c) to Post-Effective Amendment No.
25.
(d) Amendments to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors
Corporation, dated March 14, 1996 and July 15, 1996, was
electronically filed and is incorporated herein by reference to
Exhibit 6(a) of Fidelity Court Street Trust's Post-Effective Amendment
No. 61 (File No. 2-58774).
(e) Amendment to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors
Corporation, dated October 1, 1996, was electronically filed and is
incorporated herein by reference to Exhibit 6(g) of Daily Money Fund's
Post-Effective Amendment No. 40 (File No. 2-77909).
(f) General Distribution Agreement dated September 30, 1993 between
Daily Money Fund, on behalf of Money Market Portfolio (currently known
as Prime Fund), and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as
Exhibit 6(a) to Daily Money Fund's Post-Effective Amendment No. 25.
(g) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of U.S. Treasury
Portfolio (currently known as Treasury Fund) and Money Market
Portfolio (currently known as Prime Fund) was electronically filed and
is incorporated herein by reference as Exhibit 6(g) to Daily Money
Fund's Post-Effective Amendment No. 34.
(h) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients"
with respect to shares of U.S. Treasury Portfolio (currently known as
Treasury Fund) and Money Market Portfolio (currently known as Prime
Fund) was electronically filed and is incorporated herein by reference
as Exhibit 6(h) to Daily Money Fund's Post-Effective Amendment No. 34.
(i) Form of Selling Dealer Agreement for Bank Related Transactions
(most recently revised January, 1997) was electronically filed and is
incorporated herein by reference to Exhibit 6(i) to Post-Effective
Amendment No. 28.
(j) Form of Selling Dealer Agreement (most recently revised January,
1997) was electronically filed and is incorporated herein by reference
to Exhibit 6(j) to Post-Effective Amendment No. 28.
(k) Amendments to the General Distribution Agreement between Daily
Money Fund on behalf of U.S. Treasury Portfolio (currently known as
Treasury Fund) and Money Market Portfolio (currently known as Prime
Fund) and Fidelity Distributors Corporation, dated March 14, 1996 and
July 15, 1996, are incorporated herein by reference to Exhibit 6(a) of
Fidelity Court Street Trust's Post-Effective Amendment No. 61 (File
No. 2-58774).
(l) Form of Bank Agency Agreement (most recently revised January,
1997) was electronically filed and is incorporated herein by reference
to Exhibit 6(l) to Post-Effective Amendment No. 28.
(m) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to Capital Reserves Class shares
of Prime Fund, Tax-Exempt Fund and Treasury Fund is incorporated
herein by reference to Exhibit 6(m)to Post-Effective Amendment No. 32.
(n) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients"
with respect to Capital Reserves Class shares of Prime Fund,
Tax-Exempt Fund and Treasury Fund is incorporated herein by reference
to Exhibit 6(n) to Post-Effective Amendment No. 32.
7. (a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Fidelity Select Portfolio's
(File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
8 (a) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and the Fidelity Daily Money Fund Trust
on behalf of Money Market Portfolio (currently known as Prime Fund)
and U.S. Treasury Portfolio (currently known as Treasury Fund) and
Money Market Portfolio (currently known as Prime Fund) is incorporated
herein by reference to Exhibit 8(a) of Fidelity Hereford Street
Trust's Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Appendix A, dated August 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and Daily Money
Fund on behalf of Money Market Portfolio (currently known as Prime
Fund) and U.S. Treasury Portfolio (currently known as Treasury Fund)
was electronically filed and is incorporated herein by reference to
Exhibit 8(b) to Daily Money Fund's Post-Effective Amendment No. 40.
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and Fidelity
Daily Money Fund Trust on behalf of Money Market Portfolio (currently
known as Prime Fund) and U.S. Treasury Portfolio (currently known as
Treasury Fund) is incorporated herein by reference to Exhibit 8(c) of
Fidelity Income Fund's Post-Effective Amendment No. 35 (File No.
2-92661).
(d) Custodian Agreement, Appendix B, and Appendix C, dated December
1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on
behalf of Daily Tax-Exempt Money Fund (currently known as Tax-Exempt
Fund) was electronically filed and is incorporated herein by reference
to Exhibit 8 to Fidelity California Municipal Trust's Post-Effective
Amendment No. 28 (File No. 2-83367).
(e) Appendix A, dated October 17, 1996, to the Custodian Agreement,
dated December 1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt
Money Fund on behalf of Daily Tax-Exempt Money Fund (currently known
as Tax-Exempt Fund) was electronically filed and is incorporated
herein by reference to Exhibit 8(a) to Fidelity Court Street Trust's
Post-Effective Amendment No. 61 (File No. 2-58774).
(f) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and the Fidelity Funds, was
electronically filed and is incorporated herein by reference to
Exhibit 8(d) to Fidelity Institutional Cash Portfolio's Post-Effective
Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement among
The Bank of New York, J. P. Morgan Securities, Inc., and the Fidelity
Funds was electronically filed and is incorporated herein by reference
to Exhibit 8(e) to Daily Money Fund's Post-Effective Amendment No 31.
(h) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Fidelity Funds was
electronically filed and is incorporated herein by reference to
Exhibit 8(f) to Daily Money Fund's Post-Effective Amendment No. 31.
(i) Joint Trading Account Custody Agreement between the The Bank of
New York and the Fidelity Funds was electronically filed and is
incorporated herein by reference to Exhibit 8(h) to Daily Money Fund's
Post-Effective Amendment No. 31.
(j) First Amendment to Joint Trading Account Custody Agreement
between the The Bank of New York and the Fidelity Funds was
electronically filed and is incorporated herein by reference to
Exhibit 8(i) to Daily Money Fund's Post-Effective Amendment No. 31.
9. (a) Transfer Agent Agreement dated December 30, 1991, between Daily
Tax-Exempt Money Fund II and United Missouri was electronically filed
and is incorporated herein by reference to Exhibit 9(a) to
Post-Effective Amendment No. 20.
(b) Schedule A to the Transfer Agent Agreement for Daily Tax-Exempt
Money Fund (currently known as Tax-Exempt Fund), dated January 1, 1993
was electronically filed and is incorporated herein by reference as
Exhibit 9(b) to Post-Effective Amendment No. 20.
(c) Appointment of Sub-Transfer Agent for Daily Tax-Exempt Money Fund
II, dated December 30, 1991, was electronically filed and is
incorporated herein by reference to Exhibit 9(c) to Post-Effective
Amendment No. 25.
(d) Service Agent Agreement, dated December 30, 1991, between Daily
Tax-Exempt Money Fund II, United Missouri, and Fidelity Management &
Research Co. was electronically filed and is incorporated herein by
reference to Exhibit 9(d) to Post-Effective Amendment No. 20.
(e) Schedules B and C to the Service Agreement for Daily Tax-Exempt
Money Fund, dated March 12, 1992 and December 31, 1991, respectively,
were electronically filed and are incorporated herein by reference to
Exhibit 9(e) to Post Effective Amendment No. 20.
(f) Appointment of Sub-Servicing Agent for Daily Tax-Exempt Money
Fund II, dated December 30, 1991, was electronically filed as Exhibit
9(f) to Post Effective Amendment No. 29.
10. Not applicable.
11. Not applicable.
12. None.
13. None.
14. (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein
by reference to Exhibit 14(a) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(i) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(l) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(m) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No.
57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Commonwealth Trust's (File No.
2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(o) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k)
Basic Plan Document, Standardized Adoption Agreement, and
Non-Standardized Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan
Adoption Agreement, Non-Standardized Discretionary Contribution Plan
No. 002 Adoption Agreement, and Non-Standardized Discretionary
Contribution Plan No. 003 Adoption Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(g) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(c) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile Form,
and Plan Document, as currently in effect, is incorporated herein by
reference to Exhibit 14(q) of Fidelity Aberdeen Street Trust's (File
No. 33-43529) Post-Effective Amendment No. 19.
15. (a) Distribution and Service Plan for Treasury Fund: Advisor C
Class is incorporated herein by reference to Exhibit 15(a) to
Post-Effective Amendment No. 33.
(b) Distribution and Service Plan for Treasury Fund: Daily Money
Class was electronically filed and is incorporated herein by reference
to Exhibit 15(a) to Post-Effective Amendment No 29.
(c) Distribution and Service Plan for Treasury Fund: Capital Reserves
Class is incorporated herein by reference to Exhibit 15(c) of
Post-Effective Amendment No. 32.
(d) Distribution and Service Plan for Treasury Fund: Advisor B Class
was electronically filed and is incorporated herein by reference to
Exhibit 15(d) to Post-Effective Amendment No. 29.
(e) Distribution and Service Plan for Prime Fund: Daily Money Class
was electronically filed and is incorporated herein by reference to
Exhibit 15(b) to Post-Effective Amendment No. 29.
(f) Distribution and Service Plan for Prime Fund: Capital Reserves
Class is incorporated herein by reference to Exhibit 15(f) of
Post-Effective Amendment No. 32.
(g) Distribution and Service Plan for Tax-Exempt Fund: Daily Money
Class was electronically filed and is incorporated herein by reference
to Exhibit 15(c) to Post-Effective Amendment No. 29.
(h) Distribution and Service Plan for Tax-Exempt: Capital Reserves
Class is incorporated herein by reference to Exhibit 15(h) of
Post-Effective Amendment No. 32.
16. Schedule for computation of performance quotations was
electronically filed and is incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment No. 25.
17. Not applicable.
18. Rule 18f-3 Plan on behalf of Prime Fund, Treasury Fund and
Tax-Exempt Fund, dated September 18, 1997 is incorporated herein by
reference to Exhibit 18 to Post-Effective Amendment No. 33.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of
Trustees of other funds advised by FMR, each of which has Fidelity
Management and Research Company as its investment adviser. In
addition, the officers of these funds are substantially identical.
Nonetheless, Registrant takes the position that it is not under common
control with these other funds since the power residing in the
respective boards and officers arises as the result of an official
position with the respective funds.
Item 26. Number of Holders of Securities as of August 31, 1997

Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders

Prime Fund - Daily Money Class 242,345

Prime Fund - Capital Reserves Class 0

Tax-Exempt Fund - Daily Money Class 11,219

Tax-Exempt Fund - Capital Reserves Class 0

Treasury Fund - Daily Money Class 29,117

Treasury Fund - Advisor B Class
835
Treasury Fund - Advisor C Class 0

Treasury Fund - Capital Reserves Class 0

Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and
all claims and demands whatsoever. Article X, Section 10.02 of the
Trust Instrument states that the Registrant shall indemnify any
present trustee or officer to the fullest extent permitted by law
against liability, and all expenses reasonably incurred by him or her
in connection with any claim, action, suit or proceeding in which he
or she is involved by virtue of his or her service as a trustee,
officer, or both, and against any amount incurred in settlement
thereof. Indemnification will not be provided to a person adjudged by
a court or other adjudicatory body to be liable to the Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may
be provided unless there has been a determination, as specified in the
Trust Instrument, that the officer or trustee did not engage in
disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
their own disabling conduct.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names FIIOC
and/or the Registrant as a party and is not based on and does not
result from FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with
FIIOC's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence
or reckless disregard of duties) which results from the negligence of
the Registrant, or from FIIOC's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of FIIOC's
acting in reliance upon advice reasonably believed by FIIOC to have
been given by counsel for the Registrant, or as a result of FIIOC's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the
Board and Director of FMR, FMR Corp., FMR Texas
Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Chairman of the Board and Representative Director of
Fidelity Investments Japan Limited; President and
Trustee of funds advised by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FMR Texas Inc., FMR (U.K.) Inc., and
FMR (Far East) Inc.; General Counsel, Managing
Director, and Senior Vice President of FMR Corp.

J. Gary Burkhead President of FIIS; President and Director of FMR, FMR
Texas Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.

Peter S. Lynch Vice Chairman of the Board and Director of FMR.

Marta Amieva Vice President of FMR.

John Carlson Vice President of FMR.

Dwight D. Churchill Senior Vice President of FMR.

Barry Coffman Vice President of FMR.

Arieh Coll Vice President of FMR.

Stephen G. Manning Assistant Treasurer of FMR

William Danoff Senior Vice President of FMR and of a fund advised by
FMR.

Scott E. DeSano Vice President of FMR.

Craig P. Dinsell Vice President of FMR.

Penelope Dobkin Vice President of FMR and of a fund advised by FMR.

George C. Domolky Vice President of FMR.

Bettina Doulton Vice President of FMR and of funds advised by FMR.

Margaret L. Eagle Vice President of FMR and a fund advised by FMR.

Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Gregory Fraser Vice President of FMR and of a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of FMR
Texas Inc.

Robert Gervis Vice President of FMR.

David L. Glancy Vice President of FMR and of a fund advised by FMR.

Kevin E. Grant Vice President of FMR and of funds advised by FMR.

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

Boyce I. Greer Senior Vice President of FMR.

Bart A. Grenier Vice President of FMR and of High-Income Funds
advised by FMR.

Robert Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.

William J. Hayes Senior Vice President of FMR; Vice President of Equity
funds advised by FMR.

Richard Hazlewood Vice President of FMR and of a fund advised by FMR.

Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.

Bruce Herring Vice President of FMR.

John R. Hickling Vice President of FMR and of a fund advised by FMR.

Robert F. Hill Vice President of FMR; Director of Technical Research.

Curt Hollingsworth Vice President of FMR and of funds advised by FMR.

Abigail P. Johnson Senior Vice President of FMR and of a fund advised by
FMR; Associate Director and Senior Vice President of
Equity funds advised by FMR.

David B. Jones Vice President of FMR.

Steven Kaye Vice President of FMR and of a fund advised by FMR.

Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.

David P. Kurrasch Vice President of FMR.

Robert A. Lawrence Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Vice President of High Income funds advised by FMR.

Harris Leviton Vice President of FMR and of a fund advised by FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Mark G. Lohr Vice President of FMR; Treasurer of FMR, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Texas Inc.

Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.

Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.

Charles Mangum Vice President of FMR.

Kevin McCarey Vice President of FMR.

Diane McLaughlin Vice President of FMR.

Neal P. Miller Vice President of FMR.

Robert H. Morrison Vice President of FMR; Director of Equity Trading.

David L. Murphy Vice President of FMR and of funds advised by FMR.

Scott Orr Vice President of FMR.

Jacques Perold Vice President of FMR.

Anne Punzak Vice President of FMR.

Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.

Kennedy P. Richardson Vice President of FMR.

Mark Rzepczynski Vice President of FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.

Fergus Shiel Vice President of FMR.

Carol Smith-Fachetti Vice President of FMR.

Steven J. Snider Vice President of FMR.

Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.

Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Senior Vice President and Director of Operations and
Compliance of FMR (U.K.) Inc.

Thomas Sprague Vice President of FMR.

Robert E. Stansky Senior Vice President of FMR; Vice President of a fund
advised by FMR.

Scott Stewart Vice President of FMR.

Cythia Straus Vice President of FMR.

Thomas Sweeney Vice President of FMR and of a fund advised by FMR.

Beth F. Terrana Senior Vice President of FMR; Vice President of a fund
advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of funds advised by FMR.

George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.

</TABLE>

(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity
Management & Research Company. The directors and officers of the
Sub-Adviser have held the following positions of a substantial nature
during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the Board of
FMR; President and Chief Executive Officer of
FMR Corp.; Chairman of the Board and
Representative Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.

J. Gary Burkhead President of FIIS; President and Director of FMR
Texas, FMR, FMR (Far East) Inc., and FMR
(U.K.) Inc.; Managing Director of FMR Corp.;
Senior Vice President and Trustee of funds
advised by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; General
Counsel, Managing Director, and Senior Vice
President of FMR Corp.

Robert H. Auld Vice President of FMR Texas.

Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.

Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.

Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.

Scott A. Orr Vice President of FMR Texas and of funds
advised by FMR.

Burnell R. Stehman Vice President of FMR Texas and of funds
advised by FMR.

John J. Todd Vice President of FMR Texas and of funds
advised by FMR.

Mark G. Lohr Treasurer of FMR Texas, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR; Vice President of
FMR.

Stephen G. Manning Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.

Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of FMR.

Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
most funds advised by FMR.
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

Michael Mlinac Director None

James Curvey Director None

Martha B. Willis President None

Arthur S. Loring Vice President and Clerk Secretary

Caron Ketchum Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Holland Compliance Officer None

* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the
funds' respective custodian: The Bank of New York, 110 Washington
Street, New York, N.Y. or UMB Bank, n.a., 1010 Grand Avenue, Kansas
City, MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The trustees and shareholders of Daily Money Fund have approved a
plan of reorganization ("Plan") between each of Daily Money Fund: U.S.
Treasury Portfolio (currently known as Treasury Fund) and Money Market
Portfolio (currently known as Prime Fund) ("Predecessor Funds"), and
its successor series of this trust whereby all of the assets and
liabilities of the predecessor funds will be transferred to this
Trust. Registrant hereby undertakes that it will submit by amendment
to this registration statement financial statements and financial
highlights reflecting the reorganization described in the Plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 34 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 30th day
of October 1997.

Newbury Street Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

(Signature) (Title) (Date)

<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee October 30, 1997

Edward C. Johnson 3d (Principal Executive Officer)

/s/Richard A. Silver Treasurer October 30, 1997

Richard A. Silver

/s/Robert C. Pozen Trustee October 30, 1997

Robert C. Pozen

/s/Ralph F. Cox * Trustee October 30, 1997

Ralph F. Cox

/s/Phyllis Burke Davis * Trustee October 30, 1997

Phyllis Burke Davis

/s/Robert M. Gates ** Trustee October 30, 1997

Robert M. Gates

/s/E. Bradley Jones * Trustee October 30, 1997

E. Bradley Jones

/s/Donald J. Kirk * Trustee October 30, 1997

Donald J. Kirk

/s/Peter S. Lynch * Trustee October 30, 1997

Peter S. Lynch

/s/Marvin L. Mann * Trustee October 30, 1997

Marvin L. Mann

/s/William O. McCoy * Trustee October 30, 1997

William O. McCoy

/s/Gerald C. McDonough * Trustee October 30, 1997

Gerald C. McDonough

/s/Thomas R. Williams * Trustee October 30, 1997

Thomas R. Williams

</TABLE>

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust

</TABLE>

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997

Edward C. Johnson 3d

POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.

/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________

Edward C. Johnson 3d Peter S. Lynch

/s/J. Gary Burkhead_______________ /s/William O. McCoy______________

J. Gary Burkhead William O. McCoy

/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________

Ralph F. Cox Gerald C. McDonough

/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________

Phyllis Burke Davis Marvin L. Mann

/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________

E. Bradley Jones Thomas R. Williams

/s/Donald J. Kirk __________________

Donald J. Kirk

POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997

Robert M. Gates