SCUDDER
November 1, 1995
Dear Scudder Investor,
Since May 1, 1994, Scudder Medium Term Tax Free Fund's investment adviser,
Scudder, Stevens & Clark, Inc., has maintained the Fund's total operating
expenses at 0.70% of daily net assets. Effective immediately, the Fund will
incur full operating expenses and fees. For the fiscal year ended December 31,
1994, actual expenses charged to the Fund would have equaled 0.71% if total
operating expenses had not been maintained. The prospectus language on the
reverse side shows the effect of this change.
Please contact a Scudder Investor Relations representative at 1-800-225-2470
between 8 a.m. and 8 p.m., eastern time, Monday through Friday, should you have
any questions about this or any other Scudder fund.
Sincerely,
/s/David S. Lee
David S. Lee
President, Scudder Investor Services, Inc.
This letter is for explanatory purposes and is not part of the prospectus
supplement on the reverse side.
(over please)
<PAGE>
SCUDDER
Scudder Medium Term Tax Free Fund
Supplement to Prospectus
Dated May 1, 1995
How to compare a Scudder pure no-load(TM) fund
This information is designed to help you understand the various costs and
expenses of investing in Scudder Tax Free Money Fund and Scudder Medium Term Tax
Free Fund. By reviewing this table and those in other mutual funds'
prospectuses, you can compare each Fund's fees and expenses with those of other
funds. With Scudder's pure no-load(TM) funds, you pay no commissions to purchase
or redeem shares, or to exchange from one fund to another. As a result, all of
your investment goes to work for you.
1) Shareholder transaction expenses: Expenses charged directly to your
individual account in either Fund for various transactions.
Scudder Tax Free Scudder Medium
Money Fund Term Tax Free Fund
---------- ------------------
Sales commissions to purchase NONE NONE
shares (sales load)
Commissions to reinvest dividends NONE NONE
Redemption fees NONE* NONE*
Fees to exchange shares NONE NONE
2) Annual Fund operating expenses: Expenses paid by either Fund before it
distributes its net investment income, expressed as a percentage of its
average daily net assets for the year ended December 31, 1994.
Investment management fees 0.50% 0.56%**
12b-1 fees NONE NONE
Other expenses 0.27% 0.15%
----- -----
Total Fund operating expenses 0.77% 0.71%**
===== =====
Example
Based on the levels of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by each Fund before it distributes its
net investment income to shareholders. (As noted above, the Funds have no
redemption fees of any kind.)
One year $ 8 $ 7
Three years 25 23
Five years 43 40
Ten years 95 88
See "Fund organization--Investment adviser" for further information about the
investment management fees. This example assumes reinvestment of all dividends
and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than those
shown.
* You may redeem by writing or calling the Funds or by Write-A-Check. If you
wish to receive redemption proceeds via wire, there is a $5 wire service
fee. For additional information, please refer to "Transaction
information--Redeeming shares."
** The Adviser waived a portion of its fee so that the Fund's total operating
expenses did not exceed: 0.25% of average daily net assets on January 1,
1994, 0.50% from January 2, 1994 to April 30, 1994, and 0.70% from May 1,
1994 to October 31, 1995. The above table shows what the fees and expenses
would have been if the Adviser had not agreed to waive a portion of its
fee. Actual expenses charged for the fiscal year ended December 31, 1994,
after waiver, equaled 0.63% of average daily net assets.
November 1, 1995 MIS45PS
SFD45SU1
