S:\FUNDS\SUPPLEME\A81SUP.DOCPROSPECTUS SUPPLEMENT
45227 7/98
DATED JULY 27, 1998
PUTNAM TAX-FREE HIGH YIELD FUND
Prospectus dated November 30, 1997
The section "Distribution plans -Class B and class M distribution
plans" on page 28 is supplemented as follows:
Putnam Mutual Funds has agreed to reduce the class B 12b-1 fee
from 0.85% to 0.70%. Payments to dealers are not affected by
this reduction. The table of fees and expenses set forth under
the heading "About the fund - Expenses summary" has not been
restated to reflect this reduction.
S:\funds\suppleme\
