PUTNAM MONEY MARKET FUND
(the "Money Market Fund")
PUTNAM TAX EXEMPT MONEY MARKET FUND
(the "Tax Exempt Money Market Fund")
Prospectus Supplement dated August 5, 1996
to Prospectus dated February 1, 1996
At a shareholder meeting to be held on September 5, 1996, the
shareholders of the funds will be asked to approve amendments to
the funds' fundamental investment restrictions, including the
elimination of certain restrictions.
If these amendments are approved, each fund would be able to
invest more than 5% of its total assets in securities of any
issuer (other than obligations issued or guaranteed as to
interest or principal by the U.S. government or its agencies or
instrumentalities) with respect to 25% of its total assets,
although this ability is currently limited by the rules governing
money market funds.
The policy set forth above is fundamental and may not be changed
without shareholder approval. See the funds' Statement of
Additional Information for the full text of these policies as
well as the funds' other fundamental policies, some of which were
also changed by vote of shareholders.
In addition, the Money Market Fund's restriction with respect to
issuers which have been in operation for less than three years
would be made non-fundamental, meaning that it could be changed
without shareholder approval.
If shareholders do not utlimately approve some or all of the
proposed changes, the prospectus will be revised accordingly.
27018 8/96
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