FEDERATED MUNICIPAL TRUST, 485BPOS, 1994-12-29

FEDERATED MUNICIPAL TRUST
485BPOS, 1994-12-29

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1933 Act File No. 33-31259
1940 Act File No. 811-5911

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No.

Post-Effective Amendment No. 32 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 32 X

FEDERATED MUNICIPAL TRUST

(Exact Name of Registrant as Specified in Charter)

Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on December 31, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) 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.

Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:

X filed the Notice required by that Rule on December 15, 1994; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.

Copies to:

Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin, L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222

CROSS-REFERENCE SHEET

This Amendment to the Registration Statement of FEDERATED
MUNICIPAL TRUST, which consists of thirteen portfolios: (1) Connecticut
Municipal Cash Trust, (a) Institutional Service Shares; (2) Pennsylvania
Municipal Cash Trust, (a) Cash Series Shares and (b) Institutional
Service Shares; (3) Minnesota Municipal Cash Trust, (a) Cash Series
Shares and (b) Institutional Shares; (4) New Jersey Municipal Cash
Trust, (a) Institutional Shares and (b) Institutional Service Shares;
(5) Ohio Municipal Cash Trust, (a) Cash II Shares and (b) Institutional
Shares; (6) Virginia Municipal Cash Trust, (a) Institutional Shares and
(b) Institutional Service Shares; (7) Alabama Municipal Cash Trust; (8)
North Carolina Municipal Cash Trust; (9) Maryland Municipal Cash Trust;
(10) California Municipal Cash Trust; (11) New York Municipal Cash
Trust, (a) Cash II Shares and (b) Institutional Service Shares; (12)
Florida Municipal Cash Trust; and (13) Massachusetts Municipal Cash
Trust, (a) Institutional Service Shares and (b) BayFunds Shares, relates
only to the BayFunds Shares class of Massachusetts Municipal Cash Trust
and is comprised of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page (1-13) Cover Page.

Item 2. Synopsis (1-13) Summary of Fund
Expenses.

Item 3. Condensed Financial
Information (8,9,10) Financial Highlights;
(1-10) Performance
Information; (3b) Tax-
Equivalent Yield.

Item 4. General Description of
Registrant (1-13) General Information;
(1-13a) Investment Information;
(1-13a) Investment Objective; (1-
13a) Investment Policies; (13b)
Investment Objective and
Policies; (1) Connecticut
Municipal Securities;
(2) Pennsylvania Municipal
Securities; (3) Minnesota
Municipal Securities; (4) New
Jersey Municipal Securities; (5)
Ohio Municipal Securities;
(6) Virginia Municipal
Securities; (7) Alabama
Municipal Securities; (8)
North Carolina Municipal
Securities; (9) Maryland
Municipal Securities; (10)
California Municipal Securities;
(11) New York Municipal
Securities; (12) Florida
Municipal Securities;
(13) Massachusetts Municipal
Securities; (1) Connecticut
Investment Risks; (2)
Pennsylvania Investment Risks;
(3) Minnesota Investment Risks;
(4) New Jersey Investment Risks;
(5) Ohio Investment Risks;
(6) Virginia Investment Risks;
(7) Alabama Investment Risks;
(8) North Carolina Investment
Risks; (9) Maryland Investment
Risks; (10) California
Investment Risks; (12) New York
Investment Risks;
(13) Massachusetts Investment
Risks; (1-13) Non-
Diversification;
(1-13a) Investment Limitations;
(1-13) Regulatory Compliance.

Item 5. Management of the Fund (1-13a) Federated Municipal
Trust Information; (1-13a)
Management of Federated
Municipal Trust; (13b)
Management, Distribution and
Administration; (1-7, 12)
Distribution of Cash Series,
Institutional, Institutional
Service, or Cash II Shares;
(10,11,13a) Distribution of
Fund Shares; (1-13a)
Administration of the Fund;
(7,11,12) Expenses of the Fund
and Institutional,
Institutional Service, or Cash
II Shares; (8-13) Expenses of
the Fund.

Item 6. Capital Stock and Other
Securities (1-13a) Dividends; (1-13a)
Capital Gains; (13b) dividends
and Distributions; (1-13a)
Shareholder Information; (1-
13) Voting Rights; (1-13a)
Massachusetts Partnership Law;
(1-13) Tax Information; (1-12)
Federal Income Tax; (1)
Connecticut Tax
Considerations; (2)
Pennsylvania Tax
Considerations; (3) Minnesota
Tax Considerations; (4) New
Jersey Tax Considerations; (5)
Ohio Tax Considerations; (6)
Virginia Tax Considerations;
(7) Alabama Taxes; (8) North
Carolina Taxes; (9) Maryland
Tax Considerations; (10)
California State Income Taxes;
(11) New York State Tax
Considerations; (12) Florida
Tax Considerations; (13)
Massachusetts Tax
Considerations; (1-13) Other
State and Local Taxes;
(2,3,4,5,6,7,12) Other Classes
of Shares.

Item 7. Purchase of Securities Being
Offered (1-13) Net Asset Value;
(3a,4a,5a) Distribution Plan;
(12) Distribution and
Shareholder Servicing
Arrangements; (13a)
Distribution and Shareholder
Services Plan; (13b)
Distribution; (13b)
Shareholder Servicing
Arrangements; (7-12) Other
Payments to Financial
Institutions; (6b,9)
Shareholder Services Plan;
(13b) How to Buy Shares; (1-
7,9,11) Investing in Cash
Series, Institutional,
Institutional Services or Cash
II Shares; (7,8,9,10,12)
Investing in Fund Shares; (1-
5,10,11,12) Share Purchases;
(1-13) Minimum Investment
Required; (1-11) What Shares
Cost; (2a,3a,5a) Systematic
Investment Program; (2a,3a,5a)
Automatic Investments; (1-13)
Subaccounting Services; (1-13)
Certificates and
Confirmations.

Item 8. Redemption or Repurchase (1-6,11) Redeeming Cash
Series, Institutional,
Institutional Service or Cash
II Shares; (13b) How to Redeem
Shares; (7,8) Redeeming Fund
Shares; (10,13a) Redeeming
Shares; (2a,3a,5a,13) Through
a Financial Institution;
(2a,3a,5a,9) Directly from the
Fund; (1,2,3b,4,5b,6,10,11)
Telephone Redemption; (1-
8,10,11) Written Requests;
(11,12) By Mail; (9, 12) By
Writing a Check; (1-6)
Redemption Before Purchase
Instruments Clear; (1-12)
Accounts With Low Balances.

Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.

Item 10. Cover Page (1-13) Cover Page.

Item 11. Table of Contents (1-13) Table of Contents.

Item 12. General Information and
History (1-13) General Information
About the Fund.

Item 13. Investment Objectives and
Policies (1-13) Investment Objective
and Policies; (1-13)
Investment Limitations.

Item 14. Management of the Fund (1-13) Federated Municipal
Trust Management.

Item 15. Control Persons and Principal
Holders of Securities Not applicable.

Item 16. Investment Advisory and Other
Services (1-13) Investment Advisory
Services; (1-13)
Administrative Services;
(3a,4a,5a,11) Distribution
Plan; (3b,7b,10) Shareholder
Services Plan; (12)
Distribution and Shareholder
Services Plan.

Item 17. Brokerage Allocation (1-13) Brokerage Transactions.

Item 18. Capital Stock and Other
Securities Not applicable.

Item 19. Purchase, Redemption and Pricing
of Securities Being Offered (1-13) Purchasing Shares;
(1-13) Determining Net Asset
Value; (1-13) Redeeming
Shares.

Item 20. Tax Status (1-13) Tax Status.

Item 21. Underwriters Not applicable.

Item 22. Calculation of Performance
Data (1-13) Yield; (1-13) Effective
Yield; (1,2,3a,4-13) Tax-
Equivalent Yield; (1-13)
Performance Comparisons.

Item 23. Financial Statements (1-13) Filed in Part A.

BAYFUNDS(registration mark) SHARES
MASSACHUSETTS
MUNICIPAL
CASH TRUST

PROSPECTUS

FEDERATED SECURITIES CORP.
- --------------------------------------- MUTUAL
DISTRIBUTOR FUNDS AT BAYFUNDS
DECEMBER 31, 1994 BAYBANK

[LOGO] PRINTED ON RECYCLED PAPER G00507-01 (12/94)

MASSACHUSETTS MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL TRUST)
BAYFUNDS(registration mark) SHARES

PROSPECTUS

The BayFunds Shares of Massachusetts Municipal Cash Trust (the "Fund") offered
by this prospectus represent interests in a non-diversified investment portfolio
of Federated Municipal Trust (the "Trust"), an open-end management investment
company (a mutual fund).

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.

The investment objective of the Fund is to provide current income which is
exempt from federal regular income tax, and Massachusetts state income tax,
consistent with stability of principal. The Fund invests primarily in short-term
Massachusetts municipal securities, including securities of states, territories,
and possessions of the United States which are not issued by or on behalf of
Massachusetts or its political subdivisions and financing authorities, but which
are exempt from the federal regular and Massachusetts state income tax.
Shareholders can invest, reinvest, or redeem BayFunds Shares at any time with no
sales loads or redemption fees imposed by the Fund. Shareholders have access to
other portfolios in BayFunds.

THE BAYFUNDS SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF BAYBANKS, INC., OR ITS SUBSIDIARIES, ARE NOT ENDORSED OR GUARANTEED BY
BAYBANKS, INC., OR ITS SUBSIDIARIES, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT
AGENCY. INVESTING IN THESE SHARES INVOLVES INVESTMENT RISKS INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in BayFunds Shares. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information for BayFunds
Shares dated December 31, 1994, with the Securities and Exchange Commission. The
information contained in the Statement of Additional Information is incorporated
by reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed at the back of this prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Prospectus dated December 31, 1994

TABLE OF CONTENTS

KEY FACTS

General Information........................................................... 1

Summary of Fund Expenses...................................................... 2

Financial Highlights--Bayfunds Shares......................................... 3

MATCHING THE FUND TO YOUR INVESTMENT NEEDS

Investment Objective and Policies............................................. 4

Acceptable Investments........................................................ 4

Investment Limitations........................................................ 8

SHAREHOLDER MANUAL

Pricing of Shares............................................................. 9

How to Buy Shares............................................................. 9

By Phone.................................................................10

By Mail..................................................................10
By Wire..................................................................10
Through BayBanks Offices.................................................10
Corporate Customers/Capital Markets..................................... 10

Automatic Investment Program..................................................11

How to Exchange Shares........................................................11
By Phone.................................................................12
By Mail..................................................................12
Through BayBanks Offices.................................................12
How to Redeem Shares..........................................................12

By Phone.................................................................13

By Mail..................................................................13
By Wire..................................................................13

Through BayBanks Offices.................................................14

ADDITIONAL INFORMATION YOU SHOULD KNOW

Dividends and Distributions...................................................14

Tax Information...............................................................15

Performance Information.......................................................16

Management, Distribution and
Administration..............................................................19

Other Classes of Shares.......................................................22

KEY FACTS

GENERAL INFORMATION

As a shareholder of the BayFunds Shares class (the "Shares") of the Fund, you
have access to all of the portfolios of BayFunds, an open-end, management
investment company. BayFunds consists of five separate, professionally managed
investment portfolios with distinct investment objectives and policies.

As of the date of this prospectus, BayFunds offers shares in five portfolios:

BAYFUNDS MONEY MARKET
PORTFOLIO
SEEKS TO PROVIDE CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL AND
LIQUIDITY, BY INVESTING IN A PORTFOLIO OF MONEY MARKET INSTRUMENTS WITH
REMAINING MATURITIES OF 397 DAYS OR LESS;
BAYFUNDS U.S. TREASURY MONEY MARKET PORTFOLIO
SEEKS TO PROVIDE CURRENT INCOME CONSISTENT WITH STABILITY OF PRINCIPAL AND
LIQUIDITY, BY INVESTING, UNDER NORMAL MARKET CONDITIONS, AT LEAST 65% OF
THE VALUE OF ITS TOTAL ASSETS IN U.S. TREASURY OBLIGATIONS WITH REMAINING
MATURITIES OF 397 DAYS OR LESS;

BAYFUNDS SHORT TERM YIELD PORTFOLIO
SEEKS A HIGH LEVEL OF CURRENT INCOME CONSISTENT WITH PRESERVATION OF
CAPITAL, BY INVESTING IN A DIVERSIFIED PORTFOLIO OF HIGH-GRADE DEBT
OBLIGATIONS. THE FUND WILL MAINTAIN A DOLLAR-WEIGHTED AVERAGE MATURITY OF
THREE YEARS OR LESS;
BAYFUNDS BOND PORTFOLIO
SEEKS TO ACHIEVE HIGH CURRENT INCOME AND CAPITAL APPRECIATION, BY
INVESTING, UNDER NORMAL MARKET AND ECONOMIC CONDITIONS, AT LEAST 65% OF THE
VALUE OF ITS TOTAL ASSETS IN BONDS; AND
BAYFUNDS EQUITY PORTFOLIO
SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION, BY INVESTING, UNDER NORMAL
MARKET AND ECONOMIC CONDITIONS, AT LEAST 65% OF THE VALUE OF ITS TOTAL
ASSETS IN A BROADLY DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES, WITH
CURRENT INCOME AS A SECONDARY CONSIDERATION.

SUMMARY OF FUND EXPENSES

<TABLE>
<S> <C> <C>
BAYFUNDS SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)........................ None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)......................................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)............................................ None
Exchange Fee.................................................................................................. None
ANNUAL BAYFUNDS SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)............................................................................. 0.15%
12b-1 Fee..................................................................................................... None
Total Other Expenses.......................................................................................... 0.49%
Shareholder Services Fee (2)...................................................................... 0.06%
Total BayFunds Shares Operating Expenses (3).................................................................. 0.64%
</TABLE>

(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.50%.

(2) The maximum shareholder services fee is 0.25%.

(3) The Total BayFunds Shares Operating Expenses would have been 0.99% absent
the voluntary waiver of a portion of the management fee.

The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder of BayFunds Shares of the Fund will bear,
either directly or indirectly. For more complete descriptions of the various
costs and expenses, see "Management, Distribution and Administration."
Wire-transferred redemptions may be subject to additional fees.

<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS
<S> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period....... $ 7 $ 20 $ 36

<CAPTION>
EXAMPLE: 10 YEARS
<S> <C>
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period....... $ 80
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The information set forth in the foregoing table and example relates only to the
BayFunds Shares of the Fund. The Fund also offers another class of shares called
Institutional Service Shares. BayFunds Shares and Institutional Service Shares
are subject to certain of the same expenses; however, Institutional Service
Shares are not subject to a Sub-Transfer Agent Fee. Certain expenses are
allocated as incurred by each class. These expenses are greater for BayFunds
Shares than for Institutional Service Shares. All other expenses are allocated
based upon the average daily net assets of each class. See "Other Classes of
Shares."

MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--BAYFUNDS SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following table has been audited by Arthur Andersen LLP, the Fund's
independent public accountants. Their report dated December 14, 1994, on the
Fund's financial statements for the year ended October 31, 1994, and on the
following table for each of the periods presented, is included in the Annual
Report, which is incorporated by reference. This table should be read in
conjunction with the Fund's financial statements and notes thereto, which may be
obtained free of charge from the Fund.

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994 1993*
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------
Net investment income 0.02 0.01
- ---------------------------------------------------------------------------------- ------- -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.02) (0.01)
- ---------------------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------- ------- -------
TOTAL RETURN** 2.05% 1.25%
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------
Expenses 0.64% 0.65%(b)
- ----------------------------------------------------------------------------------
Net investment income 2.09% 1.85%(b)
- ----------------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.35% 0.43%(b)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $41,912 $18,143
- ----------------------------------------------------------------------------------
</TABLE>

* Reflects operations for the period from March 8, 1993 (date of initial
public investment) to
October 31, 1993.

** Based on net asset value, which does not reflect the sales load or
redemption fee, if applicable.

(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(b) Computed on an annualized basis.

MATCHING THE FUND TO
YOUR INVESTMENT NEEDS

IF YOU ARE SEEKING CURRENT INCOME WHICH IS EXEMPT FROM FEDERAL REGULAR
INCOME TAX AND MASSACHUSETTS STATE INCOME TAX CONSISTENT WITH LIQUIDITY AND
STABILITY OF PRINCIPAL, THEN THE FUND MAY BE A SUITABLE INVESTMENT.
THE FUND SEEKS TO MAINTAIN A STABLE $1.00 SHARE PRICE, REFERRED TO AS THE
NET ASSET VALUE PER SHARE, BY INVESTING IN A PORTFOLIO OF SHORT-TERM
MASSACHUSETTS MUNICIPAL SECURITIES. WHILE THE FUND CANNOT GUARANTEE A
STABLE SHARE PRICE, THE SHORT-TERM NATURE OF ITS INVESTMENTS HELPS TO
MINIMIZE PRICE FLUCTUATIONS.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to provide current income which is
exempt from federal regular income tax, and Massachusetts state income tax
consistent with stability of principal. The investment objective cannot be
changed without approval of shareholders. While there is no assurance that the
Fund will achieve its investment objective, it endeavors to do so by following
the investment policies described in this prospectus.

Interest income of the Fund that is exempt from the income taxes described above
retains its tax-free status when distributed to the Fund's shareholders.
However, income distributed by the Fund may not necessarily be exempt from state
or municipal taxes in states other than Massachusetts.

The Fund pursues its investment objective by investing primarily in a portfolio
of Massachusetts municipal securities with remaining maturities of 13 months or
less at the time of purchase by the Fund. As a matter of investment policy,
which cannot be changed without the approval of shareholders, the Fund invests
its assets so that at least 80% of its annual interest income is exempt from
federal regular income tax and Massachusetts state income tax. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise, the
investment policies may be changed by the Trustees without the approval of
shareholders. Shareholders will be notified before any material changes in these
policies become effective.

ACCEPTABLE INVESTMENTS

The Fund invests primarily in debt obligations issued by or on behalf of
Massachusetts and its political subdivisions and financing authorities, and
obligations of other states, territories and possessions of the United States,
including the District of Columbia, and any political subdivision or financing
authority of any of these, the income from which is, in the opinion of qualified
legal counsel, exempt from federal regular income tax and Massachusetts state
income tax imposed upon non-corporate taxpayers.

MASSACHUSETTS MUNICIPAL SECURITIES. Massachusetts municipal securities are
generally issued to finance public works, such as airports, bridges, highways,
housing, hospitals, mass transportation projects, schools, streets, and water
and sewer works. They are also issued to repay outstanding obligations, to raise
funds for general operating expenses, and to make loans to other public
institutions and facilities.

Massachusetts municipal securities include industrial development bonds issued
by or on behalf of public authorities to provide financing aid to acquire sites
or construct and equip facilities for privately or publicly owned corporations.
The availability of this financing encourages these corporations to locate
within the sponsoring communities and thereby increases local employment.

ISSUERS OF GENERAL OBLIGATION BONDS INCLUDE STATES, COUNTIES, CITIES,
TOWNS, AND OTHER GOVERNMENTAL UNITS.

The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.

Examples of Massachusetts municipal securities include, but are not limited to:
tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
bond anticipation notes ("BANs") that are intended to be refinanced through a
later issuance of longer-term bonds;
municipal commercial paper and other short-term notes;
variable rate demand notes;
municipal bonds (including bonds having serial maturities and pre-refunded
bonds) and leases; and
participation, trust and partnership interests in any of the foregoing
obligations.
At least 80% of the value of the Fund's total assets will be invested in
Massachusetts municipal securities.

MASSACHUSETTS INVESTMENT RISKS. Yields on Massachusetts municipal securities
depend on a variety of factors, including: the general conditions of the
short-term municipal note market and of the municipal bond market; the size and
maturity of the particular offering; the maturity of the obligations; and the
rating of the issue. Further, any adverse economic conditions or developments
affecting the Commonwealth of Massachusetts or its municipalities could impact
the Fund's portfolio. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of Massachusetts
municipal securities and demand features, or the credit enhancers of either, to
meet their obligations for the payment of interest and principal when due.

Investing in Massachusetts municipal securities which meet the Fund's quality
standards may not be possible if the Commonwealth of Massachusetts or its
municipalities do not maintain their high quality, short-term current credit
ratings. In addition, certain Massachusetts constitutional amendments,
legislative measures, executive orders, administrative regulations, and voter
initiatives could result in adverse consequences affecting Massachusetts
municipal securities. An expanded discussion of the current economic risks
associated with the purchase of Massachusetts municipal securities is contained
in the Statement of Additional Information.

NON-DIVERSIFICATION. The Fund is a non-diversified investment portfolio. As
such, there is no limit on the percentage of assets which can be invested in any
single issuer. An investment in the Fund, therefore, will entail greater risk
than would exist in a diversified investment portfolio because the higher
percentage of investments among fewer issuers may result in greater fluctuation
in the total market value of the Fund's portfolio. Any economic, political, or
regulatory developments affecting the value of the securities in the Fund's
portfolio will have a greater impact on the total value of the portfolio than
would be the case if the portfolio were diversified among more issuers.

The Fund intends to comply with Subchapter M of the Internal Revenue Code. This
undertaking requires that at the end of each quarter of the taxable year, with
regard to at least 50% of the Fund's total assets, no more than 5% of its total
assets are invested in the securities of a single issuer; beyond that, no more
than 25% of its total assets are invested in securities of a single issuer.

VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term municipal
securities that have variable or floating interest rates and provide the Fund
with the right to tender the security for repurchase at its stated principal
amount plus accrued interest. Such securities typically bear interest at a rate
that is intended to cause the securities to trade at par. The interest rate may
float or be adjusted at regular intervals (ranging from daily to annually), and
is normally based on a published interest rate or interest rate index. Most
variable rate demand notes allow the Fund to demand the repurchase of the
security on not more than seven days' prior notice. Other notes only permit the
Fund to tender the security at the time of each interest rate adjustment or at
other fixed intervals. See "Demand Features." The Fund treats variable rate
demand notes as maturing on the later of the date of the next interest
adjustment or the date on which the Fund may next tender the security for
repurchase.

PARTICIPATION INTERESTS. The Fund may purchase interests in municipal securities
from financial institutions such as commercial and investment banks, savings and
loan associations and insurance companies. These interests may take the form of
participations, beneficial interests in a trust, partnership interests or any
other form of indirect ownership that allows the Fund to treat the income from
the investment as exempt from federal income tax. The Fund invests in these
participation interests in order to obtain credit enhancement or demand features
that would not be available through direct ownership of the underlying municipal
securities.

MUNICIPAL LEASES. Municipal leases are obligations issued by state and local
governments or authorities to finance the acquisition of equipment and
facilities and may be considered to be illiquid. They may take the form of a
lease, an installment purchase contract, a conditional sales contract, or a
participation certificate on any of the above.

RATINGS. The Massachusetts municipal securities in which the Fund invests must
either be rated in one of the two highest short-term rating categories by one or
more nationally recognized statistical rating organizations ("NRSROs") or be of
comparable quality to securities having such ratings. An NRSRO's two highest
rating categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard &
Poor's Ratings Group ("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or FIN-1+, FIN-1 and FIN-2 by Fitch Investors Service ("Fitch") are
all considered rated in one of the two highest short-term rating categories. The
Fund will follow applicable regulations in determining whether a security rated
by more than one NRSRO can be treated as being in one of the two highest
short-term rating categories; currently, such securities must be rated by two
NRSROs in one of their two highest categories. See "Investment Limitations."

CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may have been
credit-enhanced by a guaranty, letter of credit or insurance. The Fund typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. The bankruptcy,
receivership or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.

The Fund may have more than 25% of its total assets invested in securities
credit-enhanced by banks.

DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities or another
third party, and may not be transferred separately from the underlying security.
The Fund uses these arrangements to provide the Fund with liquidity and not to
protect against changes in the market value of the underlying securities. The
bankruptcy, receivership or default by the issuer of the demand feature, or a
default on the underlying security or other event that terminates the demand
feature before its exercise, will adversely affect the liquidity of the
underlying security. Demand features that are exercisable even after a payment
default on the underlying security may be treated as a form of credit
enhancement.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Trustees, certain restricted securities are considered
liquid. To the extent restricted securities are deemed to be illiquid, the Fund
will limit their purchase, together with other securities considered to be
illiquid, to 10% of its net assets.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more/less than the market value of the securities
on the settlement date.

The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter in transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.

TEMPORARY INVESTMENTS. From time to time, during periods of other than normal
market conditions, the Fund may invest in short-term, non-Massachusetts
municipal tax-exempt obligations or other taxable temporary investments. All
temporary investments will satisfy the same credit quality standards as the
Fund's acceptable investments. See "Ratings" above. Temporary investments
include: notes issued by or on behalf of municipal or corporate issuers;
marketable obligations issued or guaranteed by the U.S. government, its agencies
or instrumentalities; other debt securities; commercial paper; certificates of
deposit of banks; and repurchase agreements (arrangements in which banks,
broker/dealers, and other recognized financial institutions sell the Fund a
temporary investment and agree to repurchase it at a mutually agreed upon time
and price).

Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or Massachusetts state income tax.

STANDBY COMMITMENTS. Some securities dealers are willing to sell municipal
securities to the Fund accompanied by their commitments to repurchase the
municipal securities prior to maturity, at the Fund's option, for the amortized
cost of the municipal securities at the time of repurchase. These arrangements
are not used to protect against changes in the market value of municipal
securities. They permit the Fund, however, to remain fully invested and still
provide liquidity to satisfy redemptions. The cost of municipal securities
accompanied by these "standby" commitments could be greater than the cost of
municipal securities without such commitments. Standby commitments are not
marketable or otherwise assignable and have value only to the Fund. The default
or bankruptcy of a securities dealer giving such a commitment would not affect
the quality of the municipal securities purchased. However, without a standby
commitment, these securities could be more difficult to sell. The Fund enters
into standby commitments only with those dealers whose credit the Adviser
believes to be of high quality.

INVESTMENT LIMITATIONS

The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge up to 15% of the value of those assets to secure such
borrowings. This investment limitation cannot be changed without shareholder
approval.

The Fund will not invest more than 5% of its total assets in industrial
development bonds or other municipal securities when the payment of principal
and interest is the responsibility of companies (or guarantors, where
applicable) with less than three years of continuous operations, including the
operation of any predecessor. This limitation can be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in this limitation becomes effective.

The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and the Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended (the "ICA"). In particular,
the Fund will comply with the various requirements of Rule 2a-7 under the ICA,
which regulates money market mutual funds. The Fund will determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The Fund may change these operational policies to reflect changes in the
laws and regulations without the approval of its shareholders.

SHAREHOLDER MANUAL

SHARES ARE SOLD "NO-LOAD"--WITHOUT A SALES CHARGE. YOUR MINIMUM INITIAL
INVESTMENT IS ONLY $2,500 OR $500 IF YOU PARTICIPATE IN THE AUTOMATIC
INVESTMENT PROGRAM.

PRICING OF SHARES

The Fund attempts to stabilize the net asset value of its Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. Net asset
value per Share for purposes of pricing purchases and redemptions is calculated
by dividing the value of all securities and other assets belonging to the Fund,
less the liabilities charged to the Fund by the number of outstanding Shares of
the Fund.

THE TERM "NET ASSET VALUE" PER SHARE REFERS TO THE VALUE OF ONE FUND
SHARE.

The Fund cannot guarantee that its net asset value will always remain at $1.00
per Share.

The net asset value is determined at 12:00 noon (Eastern time), 1:00 p.m.
(Eastern time), and the close of regular trading hours on the New York Stock
Exchange, currently 4:00 p.m. (Eastern time), Monday through Friday, except on
the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

The Fund offers Shares only on days on which the New York Stock Exchange and the
Federal Reserve Bank of Boston are open for business ("Business Days"). If
BayBank Systems, Inc. (the "Shareholder Servicing Agent") receives your purchase
order on a non-Business Day, the order will not be executed until the next
Business Day in accordance with the Distributor's procedures. The Fund and the
Distributor reserve the right to reject any purchase request.

HOW TO BUY SHARES

MINIMUM INVESTMENT. You can become a shareholder with an initial investment of
$2,500 or $500 if you participate in the Automatic Investment Program. You must
submit a completed application at the time of your initial purchase. Subsequent
investments must be in amounts of at least $100, or if you participate in the
Automatic Investment Program, the minimum for additional Share purchases is $50.
The Fund may waive any investment minimums from time to time. In addition, the
Fund may reduce or waive investment minimums for investors purchasing through
qualified BayBanks accounts.

If your purchase order is received in good order and accepted by the Fund from
Federated Services Company (the "Transfer Agent") by 1:00 p.m. (Eastern time) on
a Business Day, it will be executed at the net asset value next determined and
your Shares will begin earning dividends that day. The Transfer Agent will not
communicate your purchase order to the Fund until the Shareholder Servicing
Agent has received the purchase price in Federal funds or other immediately
available funds. If your purchase order is received in good order and accepted
by the Fund from the Transfer Agent after 1:00 p.m. (Eastern time), and prior to
4:00 p.m. (Eastern time), it will be executed at the net asset value next
determined and Shares will begin earning dividends the next Business Day. When
you purchase Shares by check, the order is considered received when the check is
converted into federal funds, normally within two Business Days.

The Shareholder Servicing Agent is responsible for the prompt transmission of
purchase orders received in good order to the Transfer Agent.

YOU MAY BUY SHARES BY TELEPHONE, MAIL, WIRE, OR IN PERSON THROUGH BAYBANKS
OFFICES.

BY PHONE. Once you are a shareholder, you may purchase additional Shares by
calling 1-800-BAYFUND (1-800-229-3863).

You must have previously authorized the Fund in writing to accept telephone
requests. If you have not done so, call 1-800-BAYFUND to receive the necessary
form and information on this Fund feature.

The establishment of certain types of deposit account relationships with
BayBanks may permit the direct deduction of your purchase price from your
BayBanks deposit account. Please call 1-800-BAYFUND to determine whether your
BayBanks deposit account qualifies.

For the protection of investors, all phone communications may be recorded where
not otherwise prohibited by law.

BY MAIL. If you make your initial Share purchase by mail, you must send a
completed application, and a check payable to the Fund, to:

BayFunds
P.O. Box 889
Burlington, MA 01803

You may obtain an application by calling
1-800-BAYFUND.

You may make subsequent investments in the Fund at any time by sending a check
for a minimum of $100 payable to the Fund at the following address:

BayFunds
P.O. Box 5-0900
Woburn, MA 01815-0900

along with either (a) the detachable form that regularly accompanies
confirmation of a prior transaction, (b) a subsequent order form that may be
obtained by calling 1-800-BAYFUND, or (c) a letter stating the amount of the
investment, the name of the Fund, the exact name and address of the account, and
your account number.

If the check does not clear, your purchase order will be cancelled.

BY WIRE. If you are a shareholder, you may purchase additional Shares by wire to
BayBanks, as agent for the Shareholder Servicing Agent, as follows:

BayBanks

ABA Number: 0110-0174-2

Attention: Mutual Funds Services

For Credit to: BayFunds Shares, Massachusetts Municipal Cash Trust; Account
37153931

Further Credit to: shareholder name and account number

Shares cannot be purchased by wire on days on which the New York Stock Exchange
and the Federal Reserve Wire System are not open for business and on the
following holidays: Martin Luther King Day, Columbus Day, or Veterans' Day.

THROUGH BAYBANKS OFFICES. You may place an order to purchase Shares in person
through designated BayBanks offices.

Purchase orders placed through BayBanks offices typically would be received by
the Transfer Agent within two Business Days. If you want more prompt processing,
you should consider another method, such as by phone. See above.

CORPORATE CUSTOMERS/CAPITAL MARKETS CUSTOMERS. Corporate and/or Capital Markets
customers of BayBanks interested in purchasing Shares

should consult their account relationship managers for procedures applicable to
their accounts or call 1-800-554-3311. This prospectus should be read in
conjunction with any materials provided by BayBanks regarding such procedures.

AUTOMATIC INVESTMENT PROGRAM

YOU CAN BUY SHARES CONVENIENTLY THROUGH THE AUTOMATIC INVESTMENT PROGRAM.

When you participate in the Automatic Investment Program, you can purchase
additional Shares in minimum amounts of $50. You must previously have authorized
in writing the total dollar amount to be deducted automatically from eligible
BayBanks deposit accounts or your deposit account maintained at a domestic
financial institution which is an automated clearing house member, and the
frequency of the deductions. The funds will be invested in Shares at the net
asset value next determined. The Fund may reduce or waive the investment
minimums for investors purchasing through qualified BayBanks accounts.

HOW TO EXCHANGE SHARES

IF YOUR INVESTMENT NEEDS CHANGE, YOU CAN EASILY REDEEM FUND SHARES AND
PURCHASE SHARES OF ANY BAYFUNDS' PORTFOLIO AT NO CHARGE.

BayFunds consists of the BayFunds Money Market Portfolio, the BayFunds U.S.
Treasury Money Market Portfolio, the BayFunds Short Term Yield Portfolio, the
BayFunds Bond Portfolio and the BayFunds Equity Portfolio. As a shareholder, you
have access to all of these portfolios ("Participating Funds") of BayFunds.
Because the BayFunds offer separate classes of shares, Fund shareholders (other
than certain trust and institutional investors, including qualified employee
benefit plans) must purchase shares of the Investment Shares class of these
Participating Funds.

You may redeem Shares having a net asset value of at least $100 and purchase
shares of any other Participating Funds in which you have an account. The
minimum initial investment to establish an account in any other Participating
Fund is $2,500 or $500 if you participate in the Automatic Investment Program.
BayFunds does not charge any fees for these transactions.

Shares will be redeemed at the net asset value next determined and Shares of the
Participating Fund to be acquired will be purchased at the net asset value per
share next determined after receipt of the request by the Transfer Agent on a
Business Day.

If you do not have an account in the Participating Fund whose shares you want to
acquire, you must establish an account. Prior to any such transaction, you must
receive a copy of the current prospectus of the Participating Fund into which a
purchase is to be effected. This account will be registered in the same name and
you will receive your dividends and distributions as an automatic reinvestment
in additional shares. If the new account registration (name, address, and
taxpayer identification number) is not identical to your existing account,
please call 1-800-BAYFUND for the necessary new account or transfer procedures.

You may find this privilege useful if your investment objectives or market
outlook should change after you invest in the Fund or in any of the
Participating Funds. You may obtain further information on this privilege and
obtain a prospectus by calling 1-800-BAYFUND.

The exchange privilege is available to shareholders resident in any state in
which Participating Funds' shares being acquired may be sold.

BayFunds reserves the right to terminate this privilege at any time on 60 days'
notice. Shareholders will be notified if this privilege is terminated.

Depending on the circumstances, an exchange with a fluctuating net asset value
Participating Fund may generate a short- or long-term capital gain or loss for
federal income tax purposes.

BY PHONE. You may provide instructions to redeem Shares and purchase shares of
any Participating Funds by calling 1-800-BAYFUND.

You must have previously authorized the Fund in writing to accept telephone
requests. If you have not done so, call 1-800-BAYFUND to receive the necessary
form and information on this Fund feature. The Fund uses reasonable procedures
(including a shareholder identity test and sending a written confirmation of
each telephone transaction) to confirm that instructions given by telephone are
genuine. However, the Fund is not responsible for the authenticity of telephone
instructions or for any losses caused by fraudulent or unauthorized telephone
instructions if the Fund reasonably believed that the instructions were genuine.

BY MAIL. You may send a written request to redeem Shares and purchase shares of
any Participating Funds to:

BayFunds
P.O. Box 889
Burlington, MA 01803

Your written request must include your name and tax identification number; the
name of the Fund, the dollar amount or number of Shares to be redeemed; the name
of the Participating Fund in which shares are to be purchased; and your account
number. Your request must be signed by the registered owner(s) exactly as
required by the account application.

THROUGH BAYBANKS OFFICES. You may place an order to redeem Shares and purchase
shares of any Participating Funds in person through designated BayBanks offices.

Orders received through designated BayBanks offices typically would be received
by the Transfer Agent within two Business Days. For more prompt processing, you
should consider another method, such as exchanging shares by phone. See above.

HOW TO REDEEM SHARES

WHEN YOU SELL YOUR SHARES--"REDEEM" THEM--YOU RECEIVE THE NET ASSET VALUE
PER SHARE NEXT DETERMINED AFTER YOU'VE MADE THE REQUEST. THERE ARE NO FEES
OR OTHER REDEMPTION CHARGES (EXCEPT FOR REDEMPTIONS BY WIRE). YOU MAY
REDEEM SOME OR ALL OF YOUR INVESTMENT.

The Fund redeems Shares at the net asset value next determined after the Fund
has received your redemption request from the Transfer Agent in proper form.
Redemption requests can be executed only on Business Days. If your redemption
request is received by the Shareholder Servicing Agent on a non-Business Day,
the Transfer Agent will not communicate your redemption request to the Fund
until the next Business Day.

Redemption proceeds may be credited to an eligible BayBanks deposit account,
paid by check, or paid by wire, as you previously designated in writing. The
Fund ordinarily will make payment for Shares redeemed after proper receipt from
the Transfer Agent of the redemption request and of all documents in proper form
within one Business Day to an eligible BayBanks deposit account, within five
Business Days if you requested redemption proceeds by check, or the same day by
wire if the Fund receives your redemption request from the Transfer Agent by
12:00 noon (Eastern time) on the day of redemption. Shares redeemed and wired
the same day will not receive the dividend declared on the day of redemption.

SIGNATURE GUARANTEES. If you request a redemption for an amount in excess of
$25,000 (no limitation if the proceeds are being credited to your BayBanks
deposit account), a redemption of any amount to be sent to an address other than
your address of record with the Fund, the transfer of the registration of
Shares, or a redemption of any amount payable to someone other than yourself as
the shareholder of record, your signature must be guaranteed on a written
redemption request by a trust company or insured commercial bank; an insured
savings and loan association or savings bank; a member firm of a national or
regional stock exchange; or any other "eligible guarantor institution," as
defined in the Securities Exchange Act of 1934. The Transfer Agent has adopted
standards for accepting signature guarantees from the above institutions. The
Fund may elect in the future to limit eligible signature guarantors to
institutions that are members of a signature guarantee program. The Fund does
not accept signatures guaranteed by a notary public. The Fund and the Transfer
Agent reserve the right to amend these standards at any time without notice. If
you have a question about the proper form for redemption requests, call
1-800-BAYFUND.

YOU MAY REDEEM SHARES BY PHONE, MAIL, WIRE OR THROUGH BAYBANKS OFFICES

BY PHONE. You may redeem Shares by calling
1-800-BAYFUND.

You must have previously authorized the Fund in writing to accept telephone
requests. If you have not done so, call 1-800-BAYFUND to receive the necessary
form.

In the event of drastic economic or market changes, you may experience
difficulty in redeeming by telephone. If this occurs, you should consider
another method of redemption, such as by mail or by wire. See below. The Fund
uses reasonable procedures (including a shareholder identity test and sending a
written confirmation of each telephone transaction) to confirm that instructions
given by telephone are genuine. However, the Fund is not responsible for the
authenticity of telephone instructions or for any losses caused by fraudulent or
unauthorized telephone instructions if the Fund reasonably believed that the
instructions were genuine.

BY MAIL. You may redeem Shares by submitting a written request for redemption
to:

BayFunds
P.O. Box 889
Burlington, MA 01803

Your written request must include your name and tax identification number, the
Fund's name, the dollar amount or number of Shares to be redeemed, and your
account number. Your request must be signed by the registered owner(s) exactly
as required by the account application.

BY WIRE. You may redeem Shares by wire (see "How to Buy Shares--By Wire") or by
calling
1-800-BAYFUND. Redemption proceeds of at least $1,000 will be wired directly to
the domestic commercial bank and account you previously designated in writing.
You are charged a fee for each wire redemption and the fee is deducted from your
redemption proceeds.

The Fund reserves the right to wire redemption proceeds within seven days after
receiving the redemption order if, in its judgment, an earlier payment could
adversely affect the Fund. The Fund also reserves the right to terminate or
modify the telephone and wire redemption procedures at any time. In that event,
shareholders would be promptly notified. Neither the Fund, the Transfer Agent,
the Sub-Transfer Agent, nor the Shareholder Servicing Agent will be responsible
for the authenticity of redemption instructions received by phone.

THROUGH BAYBANKS OFFICES. You may place an order to redeem Shares in person
through designated BayBanks offices.

Redemption orders received through designated BayBanks offices typically would
be received by the Transfer Agent within two Business Days. For more prompt
processing, you should consider another method, such as by phone. See page 13.

REDEMPTIONS BEFORE PURCHASE INSTRUMENTS CLEAR. If any portion of the Shares to
be redeemed represents an investment made with uncollected funds, the Fund
reserves the right to delay payment of proceeds until the Shareholder Servicing
Agent is reasonably certain that the funds have been collected, which could take
up to five business days.

ADDITIONAL INFORMATION YOU
SHOULD KNOW

MINIMUM BALANCE. Due to the high cost of maintaining accounts with low balances,
the Fund may redeem your Shares and send you the proceeds if, due to shareholder
redemptions your account balance falls below a minimum value of $1,000. However,
before Shares are redeemed to close an account, the shareholder will be notified
in writing and given 60 days to purchase additional Shares to meet the minimum
balance requirement. The Fund reserves the right to amend this standard upon 60
days' prior written notice to shareholders. The Fund also reserves the right to
redeem Shares involuntarily or make payment for redemptions in the form of
securities if it appears appropriate to do so in light of the Fund's
responsibilities under the ICA.

CONFIRMATIONS AND STATEMENTS. Confirmations of each purchase, exchange or
redemption are sent to each shareholder. Monthly statements are sent to report
transactions as well as dividends paid during the month. The Fund may suspend or
terminate its practice of confirming each transaction at any time without
notice.

DIVIDENDS AND DISTRIBUTIONS

YOU EARN DIVIDENDS DAILY AND RECEIVE THEM MONTHLY AS AN AUTOMATIC
REINVESTMENT IN ADDITIONAL SHARES.

Dividends from the Fund's net investment income are declared daily to
shareholders of record immediately following the 1:00 p.m. (Eastern time)
pricing of Shares. Dividends are paid monthly within five Business Days after
the end of such calendar month. The Fund does not expect to realize any net
long-term capital gains. However, if any such gains are realized, they
will be distributed to shareholders at least annually.

You will receive your dividends and your distributions as an automatic
reinvestment in additional Shares at the net asset value next determined on the
payment dates.

TAX INFORMATION

THIS DISCUSSION OF TAXES IS FOR GENERAL INFORMATION ONLY. PLEASE CONSULT
YOUR OWN TAX ADVISER ABOUT YOUR PARTICULAR SITUATION.

FEDERAL INCOME TAX. The Fund intends to meet the requirements of the Internal
Revenue Code in order not to be liable for any federal income taxes on income
and gains distributed to Fund shareholders. The Fund will distribute
substantially all of its net investment income and realized gains at least
annually.

The Fund will be treated as a single, separate entity for federal income tax
purposes.

INTEREST ON SOME MUNICIPAL SECURITIES MAY BE SUBJECT TO THE FEDERAL
ALTERNATIVE MINIMUM TAX.

Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on some municipal bonds may be included in
calculating the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.

The alternative minimum tax, equal to up to 28% of alternative minimum taxable
income for individuals and 20% for corporations, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.

The Tax Reform Act of 1986 treats interest on certain "private activity" bonds
issued after August 7, 1986, as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties. The Fund may purchase all
types of municipal bonds, including private activity bonds. Should the Fund
purchase any such bonds, a portion of the Fund's dividends may be treated as a
tax preference item.

In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of a taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Fund dividend, and alternative minimum taxable income does not
include the portion of the Fund's dividend attributable to municipal bonds which
are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.

Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.

These tax consequences apply to dividends received as additional Shares.
Information on the tax status of dividends and distributions is provided
annually.

MASSACHUSETTS TAX CONSIDERATIONS. Under existing Massachusetts laws,
distributions made by the Fund will not be subject to Massachusetts personal
income taxes to the extent that such distributions qualify as exempt interest
dividends under the Internal Revenue Code, and represent (i) obligations issued
by the Commonwealth of Massachusetts, its political subdivisions or agencies; or
(ii) obligations of the United States, its territories or possessions to the
extent exempt from taxation by the states pursuant to federal law. Conversely,
to the extent that distributions made by the Fund are derived from other types
of obligations, such distributions may be subject to Massachusetts personal
income taxes.

Shareholders subject to the Massachusetts corporate excise tax must include all
dividends paid by the Fund in their net income, and the value of their shares of
stock in the Fund in their net worth, when computing the Massachusetts corporate
excise tax.

OTHER STATE AND LOCAL TAXES. Income from the Fund is not necessarily free from
state income taxes in states other than Massachusetts or from personal property
taxes. State laws differ on this issue, and shareholders are urged to consult
their own tax advisers regarding the status of their accounts under state and
local tax laws.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders, the
performance and yield of the Fund may be quoted and compared to those of other
mutual funds with similar investment objectives and to relevant money market
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds. For example,
the performance of the Fund may be compared to data prepared by Lipper
Analytical Services, Inc., a widely recognized independent service which
monitors the performance of mutual funds.

National financial publications in which performance and yield data are reported
may include The Wall Street Journal, The New York Times, Forbes, or Money
magazine. Publications of a local or regional nature, such as The Boston Globe
or The Boston Herald, may also be used in comparing the performance and yield of
the Fund.

YIELD. The yield of the Shares represents the annualized rate of income earned
on an investment in the Shares over a seven-day period. It is the annualized
dividends earned during the period on the investment shown as a percentage of
the investment. The effective yield is calculated similarly to the yield but,
when annualized, the income earned by an investment in the Shares is assumed to
be reinvested daily. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The
tax-equivalent yield of the BayFunds Shares is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that the BayFunds Shares
would have had to earn to equal their actual yield, assuming a specific tax
rate.

Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in the Shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.

Yield, effective yield, tax-equivalent yield and total return will be calculated
separately for BayFunds Shares and Institutional Service Shares. The yield,
effective yield, tax-equivalent yield and total return for Institutional Service
Shares will exceed that of BayFunds Shares due to the difference in Class
Expenses.

From time to time, the Fund may advertise the performance of BayFunds Shares
using certain financial publications and/or compare the performance of BayFunds
Shares to certain indices.

TAX-EQUIVALENT YIELD. For the seven day periods ended October 31, 1994, and
November 30, 1994, the tax-equivalent yields for BayFunds Shares were 5.60% and
6.16%, respectively, and 5.74% and 6.30%, respectively, for Institutional
Service Shares.

The tax-equivalent yield for both classes of shares is calculated similarly to
the yield, but is adjusted to reflect the taxable yield that BayFunds Shares
would have had to earn to equal its actual yield, assuming a 39.6% federal tax
rate and the 12% regular personal income tax rate imposed by Massachusetts and
assuming that income earned by the Fund is 100% tax-exempt on a regular federal,
state, and local basis.

TAX-EQUIVALENCY TABLE

Both classes of Shares may also use a tax-equivalency table in advertising and
sales literature. The interest earned by the municipal securities in the Fund's
portfolio generally remains free from federal regular income tax, and from the
regular personal income taxes imposed by Massachusetts.* As the table below
indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads between "tax-free" and taxable yields.

<TABLE>
TAXABLE YIELD EQUIVALENT FOR 1994
STATE OF MASSACHUSETTS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TAX BRACKET:
FEDERAL 15.00% 28.00% 31.00% 36.00% 39.60%

COMBINED FEDERAL
AND STATE 27.00% 40.00% 43.00% 48.00% 51.60%
- --------------------------------------------------------------------------------
JOINT RETURN: $1- $38,001- $91,851- $140,001- Over
38,000 91,850 140,000 250,000 $ 250,000

SINGLE RETURN: $1- $22,751- $55,101- $115,001- Over
22,750 55,100 115,000 250,000 $ 250,000
- --------------------------------------------------------------------------------
TAX-EXEMPT YIELD TAXABLE YIELD EQUIVALENT
- --------------------------------------------------------------------------------
1.50% 2.05% 2.50% 2.63% 2.88% 3.10%
2.00 2.74 3.33 3.51 3.85 4.13
2.50 3.42 4.17 4.39 4.81 5.17
3.00 4.11 5.00 5.26 5.77 6.20
3.50 4.79 5.83 6.14 6.73 7.23
4.00 5.48 6.67 7.02 7.69 8.26
4.50 6.16 7.50 7.89 8.65 9.30
5.00 6.85 8.33 8.77 9.62 10.33
5.50 7.53 9.17 9.65 10.58 11.36
6.00 8.22 10.00 10.53 11.54 12.40
</TABLE>

NOTE: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes
paid on comparable taxable investments were not used to increase federal
deductions.

The above chart is for illustrative purposes only. It is not an indicator of
past or future performance of either class of Shares.

* Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local regular or alternative minimum taxes.

MANAGEMENT, DISTRIBUTION
AND ADMINISTRATION

The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated September 1, 1989. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of this
prospectus, the Board of Trustees ("Trustees") has established two classes of
shares, BayFunds Shares and Institutional Service Shares. This prospectus
relates only to BayFunds Shares of the Fund (the "Shares").

Shares are designed primarily for individuals, partnerships and corporations who
seek a convenient means of accumulating an interest in a professionally managed,
non-diversified portfolio limited to short-term Massachusetts municipal
securities. The Fund is not likely to be a suitable investment for
non-Massachusetts taxpayers or retirement plans since it intends to invest
primarily in Massachusetts municipal securities.

AS A SHAREHOLDER, YOU ARE ENTITLED TO VOTE ON CERTAIN MATTERS.

VOTING RIGHTS. Each Share of the Fund gives the shareholder one vote in Trustee
elections and other matters submitted to shareholders for vote. All shares of
all classes of each portfolio in the Trust have equal voting rights except that
in matters affecting only a particular Fund or class, only shares of that
particular Fund or class are entitled to vote.

As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for the election of Trustees
under certain circumstances. Trustees may be removed by the Trustees or by
shareholders at a special meeting. A special meeting of the shareholders shall
be called by the Trustees upon the written request of shareholders owning at
least 10% of the outstanding shares of all series of the Trust entitled to vote.

A BOARD OF TRUSTEES SUPERVISES FEDERATED MUNICIPAL TRUST.

The Trust is managed by a Board of Trustees. The Trustees are responsible for
managing the business affairs of the Trust and for exercising all of the powers
of the Trust except those reserved for the shareholders. An Executive Committee
handles the Trustees' responsibilities between meetings of the Trustees.

INVESTMENT ADVISER

ACTING UNDER THE DIRECTION OF THE TRUSTEES, THE ADVISER MAKES INVESTMENT
DECISIONS FOR THE FUND.

Pursuant to an investment advisory contract (the "Advisory Contract") with the
Trust, investment decisions for the Fund are made by Federated Management, the
Fund's investment adviser (the "Adviser") subject to direction by the Trustees.
The Adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase or sale of portfolio instruments, for
which it receives an annual fee from the Fund.

ADVISORY FEES. The Adviser receives an annual investment advisory fee equal to
.50 of 1% of the Fund's average daily net assets. Under the Advisory Contract,
which provides for the voluntary waiver of the advisory fee by the Adviser, the
Adviser may voluntarily waive some or all of the

advisory fee. This does not include reimbursement to the Fund of any expenses
incurred by shareholders who use the transfer agent's sub-accounting facilities.
The Adviser can terminate this voluntary waiver of expenses at any time in its
sole discretion. The Adviser has also undertaken to reimburse the Fund for
operating expenses in excess of limitations established by certain states.

THE ADVISER HAS EXTENSIVE INVESTMENT EXPERIENCE.

ADVISER'S BACKGROUND. Federated Management, a Delaware business trust organized
on April 11, 1989, is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust, the
trustees of which are John F. Donahue, Chairman and Trustee of Federated
Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher Donahue,
who is President and Trustee of Federated Investors.

Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private accounts.
Certain other subsidiaries also provide administrative services to a number of
investment companies. Total assets under management or administration by these
and other subsidiaries of Federated Investors are approximately $70 billion.
Federated Investors, which was founded in 1956 as Federated Investors, Inc.,
develops and manages mutual funds primarily for the financial industry.
Federated Investors' track record of competitive performance and its
disciplined, risk-averse investment philosophy serve approximately 3,500 client
institutions nationwide. Through these same client institutions, individual
shareholders also have access to this same level of investment expertise.

DISTRIBUTION

FEDERATED SECURITIES CORP. IS THE PRINCIPAL DISTRIBUTOR FOR SHARES OF THE
FUND.

Federated Securities Corp. is the principal distributor (the "Distributor") for
the Shares of the Fund. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment companies.
Federated Securities Corp. is a subsidiary of Federated Investors.

SHAREHOLDER SERVICING ARRANGEMENTS. The Distributor may pay financial
institutions such as banks, fiduciaries, custodians for public funds, investment
advisers, and broker/dealers to provide certain services to shareholders. These
services may include, but are not limited to, distributing prospectuses and
other information, providing accounting assistance, and communicating or
facilitating purchases and redemptions of shares. Any fees paid for these
services by the Distributor will be reimbursed by the Adviser and not the Fund.

The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Trustees will consider appropriate changes in the administrative services.

State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.

ADMINISTRATION
VARIOUS ORGANIZATIONS PROVIDE SERVICES TO THE FUND.

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors ("Federated Funds") as specified below:

<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of
$750 million
</TABLE>

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, a subsidiary of Federated Investors, is transfer agent
for the Shares of the Fund and dividend disbursing agent for the Fund.

The Fund's Transfer Agent maintains a Share account for each shareholder of
record. Share certificates are not issued.

SUB-TRANSFER AGENT. Supervised Service Company, Inc. (the "Sub-Transfer Agent"),
Kansas City, Missouri, is the sub-transfer agent for the Shares of the Fund. The
Institutional Service Shares class has no sub-transfer agent.

CUSTODIAN. State Street Bank and Trust Company, Boston, Massachusetts, is
custodian for the securities and cash of the Fund.

SHAREHOLDER SERVICING AGENT. BayBank Systems, Inc., Waltham, Massachusetts, is
the Fund's shareholder servicing agent. The Fund may pay the Shareholder
Servicing Agent a fee based on the average daily net asset value of Shares for
which it provides shareholder services. These shareholder services include, but
are not limited to, distributing prospectuses and other information, providing
shareholder assistance and communicating or facilitating purchases and
redemptions of Shares. This fee will be equal to .25 of 1% of the Fund's average
daily net assets for which the Shareholder Servicing Agent provides services;
however, the Shareholder Servicing Agent may choose voluntarily to waive all or
a portion of its fee at any time.

LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.

INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, Pennsylvania.
OTHER CLASSES OF SHARES

Institutional Service Shares are sold to accounts for which financial
institutions act in an agency capacity. Investments in Institutional Service
Shares are subject to a minimum initial investment of $25,000. Institutional
Service Shares are sold at net asset value.

The Distributor may pay an administrative fee to a financial institution or
broker for administrative services provided to the Institutional Service Shares
class, and may pay such a fee for administrative services provided to the
BayFunds Shares class. Any fee paid by the Distributor for administrative
services will not be an expense of either class, but will be reimbursed to the
Distributor by the Adviser.

The amount of dividends payable to Institutional Service Shares will exceed the
amount of dividends payable to BayFunds Shares by an amount equal to the
sub-transfer agent fee allocated to the BayFunds Shares.

The stated advisory fee is the same for both
classes of the Fund.

The presentation of the "Financial Highlights" of Institutional Service Shares,
that appears on the next page, is required by law.

MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994 1993 1992 1991 1990*
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------
Net investment income 0.02 0.02 0.03 0.05 0.03
- ------------------------------------------------------------------ --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------
Dividends to shareholders from net investment income (0.02) (0.02) (0.03) (0.05) (0.03)
- ------------------------------------------------------------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------ --------- --------- --------- --------- ---------
TOTAL RETURN** 2.14% 1.99% 2.87% 4.63% 2.59%
- ------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------
Expenses 0.55% 0.53% 0.34% 0.30% 0.17%(b)
- ------------------------------------------------------------------
Net investment income 2.12% 1.97% 2.82% 4.48% 5.66%(b)
- ------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.35% 0.43% 0.55% 0.69% 0.57%(b)
- ------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------
Net assets, end of period (000 omitted) $90,013 $84,524 $85,570 $81,681 $63,483
- ------------------------------------------------------------------
</TABLE>

* Reflects operations for the period from May 18, 1990 (date of initial public
investment) to
October 31, 1990.

** Based on net asset value, which does not reflect sales load or redemption
fee, if applicable.

(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(b) Computed on an annualized basis.

<PAGE>

THIS PAGE INTENTIONALLY LEFT BLANK

ADDRESSES

Massachusetts Municipal Cash Trust
BayFunds Shares
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

INVESTMENT ADVISER
Federated Management
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Federated Services Company
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

SUB-TRANSFER AGENT
Supervised Service Company, Inc.
811 Main Street
Kansas City, Missouri 64105

SHAREHOLDER SERVICING AGENT
BayBank Systems, Inc.
One BayBank Technology Place
Waltham, Massachusetts 02154

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1119
Boston, Massachusetts 02266

LEGAL COUNSEL
Houston, Houston & Donnelly
2510 Centre City Tower
Pittsburgh, Pennsylvania 15222

LEGAL COUNSEL
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037

INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
2100 One PPG Place
Pittsburgh, Pennsylvania 15222

Massachusetts Municipal Cash Trust

(A Portfolio of Federated Municipal Trust)

BayFundsR Shares
Statement of Additional Information

This Statement of Additional Information should be read with the
prospectus for BayFunds Shares of Massachusetts Municipal Cash Trust
(the "Fund") dated December 31, 1994. This Statement is not a
prospectus. To receive a copy of the prospectus, write to the Fund or
call toll-free 1-800-BAYFUND (1-800-229-3863).
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated December 31, 1994

FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors

General Information About the Fund 1
Investment Objective and Policies 1
Acceptable Investments 1
When-Issued and Delayed Delivery
Transactions 2
Temporary Investments 2
Investment Limitations 2
Massachusetts Investment Risks 4
Federated Municipal Trust
Management 5
The Funds 8
Fund Ownership 9
Trustee Liability 9
Investment Advisory Services 9
Adviser to the Fund 9
Advisory Fees 9
Administrative Services 9
Shareholder Servicing Agent 10
Brokerage Transactions 10
Conversion to Federal Funds 10
Exchanging Securities for Shares 11
Determining Net Asset Value 11
Use of the Amortized Cost Method 11
Redeeming BayFunds Shares 12
Redemption in Kind 12
Massachusetts Law 12
Tax Status 13
The Fund's Tax Status 13
Massachusetts State Income Tax 13
Yield 13
Effective Yield 14
Performance Comparisons 14
General Information About the Fund
The Fund is a portfolio in Federated Municipal Trust (the "Trust"). The
Trust was established as a Massachusetts business trust under a Declaration
of Trust dated September 1, 1989.
Shares of the Fund are offered in two classes known as BayFunds Shares and
Institutional Service Shares. This Statement of Additional Information
relates to the BayFunds Shares ("Shares") of the Fund.
Investment Objective and Policies
The Fund's investment objective is to provide current income which is
exempt from federal regular income tax, and Massachusetts state income tax,
consistent with stability of principal. The investment objective cannot be
changed without approval of shareholders.
Acceptable Investments
The Fund invests primarily in debt obligations issued by or on behalf of
Massachusetts and of other states, territories, and possessions of the
United States, including the District of Columbia, and any political
subdivision or financing authority of any of these, the income from which
is, in the opinion of qualified legal counsel, exempt from both federal
regular income tax and Massachusetts state income tax imposed upon non-
corporate taxpayers.
When determining whether a Massachusetts municipal security presents
minimal credit risks, the investment adviser considers the creditworthiness
of the issuer of the security, the issuer of a demand feature if the Fund
has the unconditional right to demand payment for the security, or the
guarantor of payment by either of those issuers.
If a security loses its rating or the security's rating is reduced below
the required minimum after the Fund purchases it, the Fund is not required
to sell the security. The investment adviser considers this event, however,
in its determination of whether the Fund should continue to hold the
security in its portfolio. If ratings made by Moody's Investors Service,
Inc. ("Moody's") or Standard & Poor's Ratings Group ("S&P") change because
of changes in those organizations or in their ratings systems, the Fund
will try to use comparable short-term ratings as standards in accordance
with the investment policies described in the Fund's prospectus.
Municipal Leases
The Fund may purchase municipal securities in the form of
participation interests which represent undivided proportional
interests in lease payments by a governmental or nonprofit entity.
The lease payments and other rights under the lease provide for and
secure the payments on the certificates. Lease obligations may be
limited by municipal charter or the nature of the appropriation for
the lease. In particular, lease obligations may be subject to
periodic appropriation. If the entity does not appropriate funds for
future lease payments, the entity cannot be compelled to make such
payments. Furthermore, a lease may provide that the participants
cannot accelerate lease obligations upon default. The participants
would only be able to enforce lease payments as they became due. In
the event of a default or failure of appropriation, unless the
participation interests are credit enhanced, it is unlikely that the
participants would be able to obtain an acceptable substitute source
of payment.
Under the criteria currently established by the Board of Trustees
("Trustees"), the Fund's investment adviser must consider the
following factors in determining the liquidity of municipal lease
securities: (1) the frequency of trades and quotes for the security;
(2) the volatility of quotations and trade prices for the security;
(3) the number of dealers willing to purchase or sell the security
and the number of potential purchasers; (4) dealer undertakings to
make a market in the security; (5) the nature of the security and the
nature of the marketplace trades; (6) the rating of the security and
the financial condition and prospects of the issuer of the security;
(7) such other factors as may be relevant to the Fund's ability to
dispose of the security; (8) whether the lease can be terminated by
the lessee; (9) the potential recovery, if any, from a sale of the
leased property upon termination of the lease; (10) the lessee's
general credit strength; (11) the likelihood that the lessee will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to its operations; and (12)
any credit enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease.
When-Issued and Delayed Delivery Transactions
These transactions are arrangements in which the Fund purchases securities
with payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of
acquiring portfolio securities connected with the Fund's investment
objective and policies, not for investment leverage.
These transactions are made to secure what is considered to be an
advantageous price and yield for the Fund. Settlement dates may be a month
or more after entering into these transactions, and the market values of
the securities purchased may vary from the purchase prices.

No fees or other expenses, other than normal transaction costs, are
incurred. However, liquid assets of the Fund sufficient to make payment for
the securities to be purchased are segregated on the Fund's records at the
trade date. These securities are marked to market daily and maintained
until the transaction has been settled.
The Fund does not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20%
of the total value of its assets.

Temporary Investments
The Fund may also invest in high quality, temporary investments during
times of unusual market conditions for defensive purposes and to maintain
liquidity.
Repurchase Agreements
Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at
the time of sale to repurchase them at a mutually agreed upon time
and price within one year from the date of acquisition. The Fund or
its custodian will take possession of the securities subject to
repurchase agreements and these securities will be marked to market
daily. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities. In the event that
such a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending
court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Fund and allow retention or disposition of
such securities. The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Fund's adviser to be
creditworthy, pursuant to guidelines established by the Trustees.
From time to time, such as when suitable Massachusetts municipal securities
are not available, the Fund may maintain a portion of its assets in cash.
Any portion of the Fund's assets maintained in cash will reduce the amount
of assets in Massachusetts municipal securities and thereby reduce the
Fund's yield.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are
necessary for the clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed.
The Fund will not borrow money for investment leverage, but rather as
a temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of its total assets are
outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets at the time of the
pledge.
Diversification of Investments
With regard to at least 50% of its total assets, no more than 5% of
its total assets are to be invested in the securities of a single
issuer, and no more than 25% of its total assets are to be invested
in the securities of a single issuer at the close of each quarter of
each fiscal year. Under this limitation, each governmental
subdivision, including states, territories, possessions of the United
States or their political subdivisions, agencies, authorities,
instrumentalities, or similar entities will be considered a separate
issuer if its assets and revenues are separate from those of the
governmental body creating it and the security is backed only by its
own assets and revenues.
Industrial development bonds backed only by the assets and revenues
of a nongovernmental issuer are considered to be issued solely by
that issuer. If, in the case of an industrial development bond or
government-issued security, a governmental or other entity guarantees
the security, such guarantee would be considered a separate security
issued by the guarantor, as well as the other issuer, subject to
limited exclusions allowed by the Investment Company Act of 1940.
Investing in Real Estate
The Fund will not purchase or sell real estate or real estate limited
partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in
securities which are secured by real estate or interests in real
estate.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
Investing in Restricted Securities
The Fund will not invest more than 10% of its net assets in
securities subject to restrictions on resale under the Securities Act
of 1933.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
Lending Cash or Securities
The Fund will not lend any of its assets except that it may acquire
publicly or nonpublicly issued Massachusetts municipal securities or
temporary investments or enter into repurchase agreements in
accordance with its investment objective, policies, and limitations.
Concentration of Investments
The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be
invested in any one industry or in industrial development bonds or
other securities, the interest upon which is paid from revenues of
similar types of projects. However, the Fund may invest as temporary
investments more than 25% of the value of its total assets in cash or
cash items, securities issued or guaranteed by the U.S. government,
its agencies, or instrumentalities, or instruments secured by these
money market instruments, such as repurchase agreements.
The above investment limitations cannot be changed without shareholder
approval. The Fund does not consider the issuance of separate classes of
shares to involve the issuance of "senior securities" within the meaning of
the investment limitation set forth above. The following limitations,
however, may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these
limitations becomes effective.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies
except as part of a merger, consolidation, reorganization, or other
acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in industrial development bonds or other municipal securities
where the principal and interest are the responsibility of companies
(or guarantors, where applicable) with less than three years of
continuous operations, including the operation of any predecessor.
Investing in Issuers Whose Securities are Owned by Officers and Trustees
of the Trust
The Fund will not purchase or retain the securities of any issuer if
the officers and Trustees of the Trust or the Fund's investment
adviser, owning individually more than 1/2 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
Dealing in Puts and Calls
The Fund will not purchase or sell puts, calls, straddles, spreads,
or any combination of them, except that the Fund may purchase
municipal securities accompanied by agreements of sellers to
repurchase them at the Fund's option.
Investing in Minerals
The Fund will not purchase or sell oil, gas, or other mineral
exploration or development programs or leases.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets
in securities which are illiquid, including repurchase agreements
providing for settlement in more than seven days after notice,
certain restricted securities not determined by the Trustees to be
liquid, and non-negotiable fixed time deposits with maturities over
seven days.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such restriction.
The Fund does not expect to borrow money or pledge securities in excess of
5% of the value of its net assets during the coming fiscal year.

For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment to be
"cash items."

Massachusetts Investment Risks
The Fund invests in obligations of Massachusetts issuers which results in
the Fund's performance being subject to risks associated with the overall
economic conditions present within Massachusetts (the "Commonwealth"). The
following information is a brief summary of the recent prevailing economic
conditions and a general summary of the Commonwealth's financial status.
This information is based on official statements relating to securities
that have been offered by Massachusetts issuers and from other sources
believed to be reliable but should not be relied upon as a complete
description of all relevant information.
The Commonwealth has a diverse economy with manufacturing, education,
health care, computers and financial services all being significant
contributors. Massachusetts is generally considered the leader in research
and development within the biotechnology, software and robotics industries
as well as having many highly prestigious universities. In addition to a
highly skilled and educated workforce, the Commonwealth has one of the
higher average per capita incomes in this country.
Throughout the early to mid-1980's Massachusetts had a strong economy which
was evidenced by low unemployment and high personal income growth as
compared to national averages. However, beginning in the late 1980's,
economic growth in the New England region and Massachusetts, in particular,
slowed and showed pronounced deterioration in the construction, real
estate, financial and manufacturing sectors. Between 1988 and 1992 there
were extensive job losses that resulted in a 10% reduction in the work
force. In addition, after years of above average property value growth,
property values have decreased an estimated 6% over the same period.
The two major revenue sources available to cities and towns in
Massachusetts are local property taxes and local aid from the Commonwealth.
Property taxes are subject to limitations imposed by a state-wide
initiative approved by the voters in November, 1980 (commonly known as
Proposition 2-1/2), which limits the property taxes that may be levied by
any city or town in any fiscal year to the lesser of (i) 2.5% of the full
valuation of the real estate and personal property therein or (ii) 2.5%
over the previous year's levy limit plus any growth in the tax base from
new construction. In recent years the decrease in property values due to
the recession and the limitations of tax levy growth imposed by Prop 2-1/2
have resulted in budget constraints for many cities and towns.
The overall financial condition of the Commonwealth can also be illustrated
by the changes of its debt ratings. During the period in which the
Commonwealth has experienced its financial difficulties beginning in 1988,
its general obligation long-term debt ratings as determined by Moody's and
S&P decreased from Aa and AA+, respectively, to a low of Baa and BBB. Since
then the Commonwealth has had its debt ratings raised by the two rating
agencies to A and A+ (Moody's and S&P) reflecting its improved fiscal
performance.
The Fund's concentration in securities issued by the Commonwealth and its
political subdivisions provides a greater level of risk than a fund which
is diversified across numerous states and municipal entities. The ability
of the Commonwealth or its municipalities to meet their obligations will
depend on the availability of tax and other revenues; economic, political,
and demographic conditions within the Commonwealth; and the underlying
fiscal condition of the Commonwealth and its municipalities.

Federated Municipal Trust Management
Officers and Trustees are listed with their addresses, present positions
with Federated Municipal Trust, and principal occupations.

John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life and
Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue , Vice President of the Trust.

Thomas G. Bigley
28th Floor
One Oxford Center
Pittsburgh, PA 15219

Trustee

Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.

John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; President, Northgate Village
Development Corporation; Partner or Trustee in private real estate ventures
in Southwest Florida; Director, Trustee, or Managing General Partner of the
Funds; formerly, President, Naples Property Management, Inc.

William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and Director,
Ryan Homes, Inc.

James E. Dowd
571 Hayward Mill Road
Concord, MA
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director, Blue
Cross of Massachusetts, Inc.

Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Trustee
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Professor of Medicine and Trustee, University of Pittsburgh;
Director of Corporate Health, University of Pittsburgh Medical Center;
Director, Trustee, or Managing General Partner of the Funds.

Edward L. Flaherty, Jr.@
Two Gateway Center - Suite 674
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Henny, Koehuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.

Glen R. Johnson*
Federated Investors Tower
Pittsburgh, PA
President and Trustee
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp. and Federated
Administrative Services.

Peter E. Madden
225 Franklin Street
Boston, MA
Trustee
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President,
State Street Bank and Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
Two Gateway Center - Suite 674
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Henny, Koehuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the Funds; formerly, Vice Chairman, Horizon
Financial, F.A.

Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.

Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.

J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp.; President, Passport Research, Ltd.; Trustee, Federated
Administrative Services, Federated Services Company, and Federated
Shareholder Services; President or Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Trust.

Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice President
and Treasurer, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Executive
Vice President, Treasurer, and Director, Federated Securities Corp.;
Trustee, Federated Services Company and Federated Shareholder Services;
Chairman, Treasurer, and Trustee, Federated Administrative Services;
Trustee or Director of some of the Funds; Vice President and Treasurer of
the Funds.

John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and Secretary,
Federated Research Corp. and Passport Research, Ltd.; Trustee, Federated
Services Company; Executive Vice President, Secretary, and Trustee,
Federated Administrative Services; Secretary and Trustee, Federated
Shareholder Services; Executive Vice President and Director, Federated
Securities Corp.; Vice President and Secretary of the Funds.

* This Trustee is deemed to be an "interested person" as defined in
the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of
Trustees between meetings of the Board.

The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds;
Automated Cash Management Trust; Automated Government Money Trust; Cash
Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Institutional Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Short-Intermediate Government Trust; Federated
Short-Term U.S. Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated U.S. Government Bond Fund; First Priority Funds; Fixed
Income Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund,
Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fund for U.S. Government Securities, Inc.; Government Income Securities,
Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.; Insurance
Management Series; Intermediate Municipal Trust; International Series,
Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty
Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty
Municipal Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.; Liquid
Cash Trust; Managed Series Trust; The Medalist Funds: Money Market
Management, Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Star Funds; The Starburst Funds; The Starburst
Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration
Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for Financial
Institutions; Trust For Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; World
Investment Series, Inc.
Fund Ownership
Officers and Trustees, as a group, do not own more than 1% of the Fund's
outstanding shares as of November 30, 1994.
As of November 30, 1994, the following shareholders of record owned 5% or
more of the outstanding BayFunds Shares of the Fund: Express & Co., Boston,
Massachusetts, owned approximately 4,528,072 shares (10.63%); Claire S.
Caine & Daniel B. Caine, Newton, Massachusetts, owned approximately
3,681,018 shares (8.65%).
As of December 12, 1994, the following shareholders of record owned 5% or
more of the outstanding Institutional Service Shares of the Fund: State
Street Bank and Trust Company, North Quincy, Massachusetts, owned
approximately 27,210,780 shares (32.77%); John & Company, Burlington,
Massachusetts, owned approximately 16,467,900 shares (19.83%); and Scaup &
Company, Boston, Massachusetts, owned approximately 4,226,057 shares
(5.09%).

Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they 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.
Investment Advisory Services
Adviser to the Fund

The Fund's investment adviser is Federated Management (the "Adviser"). It
is a subsidiary of Federated Investors. All of the voting securities of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue.

The Adviser shall not be liable to the Trust, the Fund, or any shareholder
of the Fund for any losses that may be sustained in the purchase, holding,
or sale of any security, or for anything done or omitted by it, except acts
or omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Trust.
Advisory Fees

For its advisory services, the Adviser receives an annual investment
advisory fee as described in the prospectus. During the fiscal years ended
October 31, 1994, 1993, and 1992, the Fund's adviser earned $643,293,
$498,975, and $445,783, respectively of which $445,711, $427,232, and
$445,783, respectively, were voluntarily waived because of undertakings to
limit the Fund's expenses.

State Expense Limitations
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Fund's normal
operating expenses (including the investment advisory fee, but not
including brokerage commissions, interest, taxes, and extraordinary
expenses) exceed 2-1/2% per year of the first $30 million of average
net assets, 2% per year of the next $70 million of average net
assets, and 1-1/2% per year of the remaining average net assets, the
Adviser will reimburse the Fund for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
expense limitation, the investment advisory fee paid will be reduced
by the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited by the amount of the investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
Administrative Services

Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's administrator. For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred to
as the "Administrators." For the fiscal year ended October 31, 1994, the
Administrators collectively earned $195,483. For the fiscal years ended
October 31, 1993, and 1992, Federated Administrative Services, Inc., earned
$253,380, and $197,636, respectively. Dr. Henry J. Gailliot, an officer of
Federated Management, the adviser to the Fund, holds approximately 20% of
the outstanding common stock and serves as director of Commercial Data
Services, Inc., a company which provides computer processing services to
Federated Administrative Services, Inc.

Shareholder Servicing Agent
Under a Shareholder Servicing Plan, the Fund may pay a fee to BayBank
Systems, Inc., as shareholder servicing agent, for services provided which
are necessary for the maintenance of shareholder accounts. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balance; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.
For the fiscal period ending October 31, 1994, payments in the amount of
$19,344 were made to the shareholder servicing agent.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the Adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Trustees.
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the
adviser and may include:
o advice as to the advisability of investing in securities;
o security analysis and reports;
o economic studies;
o industry studies;
o receipt of quotations for portfolio evaluations; and
o similar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of the
brokerage and research services provided.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising Federated funds and other
accounts. To the extent that receipt of these services may supplant
services for which the adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses.
Purchasing BayFunds Shares
Investors may purchase Shares of the Fund on days on which the New York
Stock Exchange and the Federal Reserve Bank of Boston are open for
business. The procedure for purchasing Shares is explained in the
prospectus under "How to Buy Shares."
Conversion to Federal Funds
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be
in Federal funds or be converted into Federal funds. The Shareholder
Servicing Agent (as defined in the prospectus) acts as the shareholder's
agent in depositing checks and converting them to Federal funds.

Exchanging Securities for Shares
The Fund may accept securities in exchange for Shares. The Fund will allow
such exchanges only upon the prior approval of the Fund and a determination
by the Fund and the Adviser that the securities to be exchanged are
acceptable.
Any securities exchanged must meet the investment objective and policies of
the Fund, must have a readily ascertainable market value and must be
liquid. The Fund acquires the exchanged securities for investment and not
for resale. The market value of any securities exchanged in an initial
investment. plus any cash, must be at least $25,000.
Securities accepted by the Fund will be valued in the same manner as the
Fund values its assets. The basis of the exchange will depend upon the net
asset value of Shares on the day the securities are valued. One Share of
the Fund will be issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be
considered in valuing the securities. All interest, dividends,
subscription or other rights attached to the securities become the property
of the Fund, along with the securities.

Determining Net Asset Value
The Fund attempts to stabilize the value of a share at $1.00. The days on
which net asset value is calculated by the Fund are described in the
prospectus.
Use of the Amortized Cost Method
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-7
(the "Rule") promulgated by the Securities and Exchange Commission under
the Investment Company Act of 1940. Under the Rule, the Trustees must
establish procedures reasonably designed to stabilize the net asset value
per share, as computed for purposes of distribution and redemption, at
$1.00 per share, taking into account current market conditions and the
Fund's investment objective.
Under the Rule, the Fund is permitted to purchase instruments which are
subject to demand features or standby commitments. As defined by the Rule,
a demand feature entitles the Fund to receive the principal amount of the
instrument from the issuer or a third party on (1) no more than 30 days'
notice or (2) specified intervals not exceeding thirteen months on no more
than 30 days' notice. A standby commitment entitles the Fund to achieve
same-day settlement and to receive an exercise price equal to the amortized
cost of the underlying instrument plus accrued interest at the time of
exercise.
Although demand features and standby commitments are techniques and are
defined as "puts" under the Rule, the Fund does not consider them to be
"puts" as that term is used in the Fund's investment limitations. Demand
features and standby commitments are features which enhance an instrument's
liquidity, and the investment limitation which proscribes puts is designed
to prohibit the purchase and sale of put and call options and is not
designed to prohibit the Fund from using techniques which enhance the
liquidity of portfolio instruments.
Monitoring Procedures
The Trustees' procedures include monitoring the relationship between
the amortized cost value per share and the net asset value per share
based upon available indications of market value. The Trustees will
decide what, if any, steps should be taken if there is a difference
of more than 0.5% between the two values. The Trustees will take any
steps they consider appropriate (such as redemption in kind or
shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the
two methods of determining net asset value.
Investment Restrictions
The Rule requires that the Fund limit its investments to instruments
that, in the opinion of the Trustees, present minimal credit risk and
have received the requisite rating from one or more nationally
recognized statistical rating organizations. If the instruments are
not rated, the Trustees must determine that they are of comparable
quality. The Rule also requires the Fund to maintain a dollar-
weighted average portfolio maturity (not more than 90 days)
appropriate to the objective of maintaining a stable net asset value
of $1.00 per share. In addition, no instrument with a remaining
maturity of more than 397 days can be purchased by the Fund. For a
discussion of the treatment of variable rate municipal securities
with demand features, refer to "Variable Rate Demand Notes" in the
prospectus.
Should the disposition of a portfolio security result in a dollar-
weighted average portfolio maturity of more than 90 days, the Fund
will invest its available cash so as to reduce the average maturity
to 90 days or less as soon as possible.
The Fund may attempt to increase yield by trading portfolio securities to
take advantage of short-term market variations. This policy may, from time
to time, result in high portfolio turnover. Under the amortized cost method
of valuation, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio.
In periods of declining interest rates, the indicated daily yield on Shares
of the Fund, computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above, may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates.
In periods of rising interest rates, the indicated daily yield on Shares of
the Fund computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market prices
and estimates.
Redeeming BayFunds Shares
The Fund redeems Shares at the next computed net asset value after the Fund
receives the redemption request from the Transfer Agent in proper form.
Redemption procedures are explained in the prospectus under "How to Redeem
Shares."
Redemption in Kind
Although the Fund intends to redeem shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part
by a distribution of securities from the Fund's portfolio. To the extent
available, such securities will be readily marketable.
Redemption in kind will be made in conformity with applicable Securities
and Exchange Commission rules, taking such securities at the same value
employed in determining net asset value and selecting the securities in a
manner the Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940 which obligates the Fund to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net
asset value of the respective class during any 90-day period.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them
before their maturity could receive less than the redemption value of their
securities and could incur certain transaction costs.
Monthly Statements
Shareholders of the Fund who have eligible BayBanks deposit accounts
will receive combined monthly statements containing all information
relating to their deposit account(s) and BayFunds transactions.
Companion Account Availability
Certain BayBanks deposit account customers may elect to open a
companion BayFunds account to facilitate BayFunds transactions.
Massachusetts Law
Under certain circumstances, shareholders may be held personally liable
under Massachusetts law for obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in
each agreement, obligation, or instrument that the Trust or its Trustees
enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required to use its property to protect
or compensate the shareholder. On request, the Trust will defend any claim
made and pay any judgment against a shareholder for any act or obligation
of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust cannot meet its obligations to
indemnify shareholders and pay judgments against them from its assets.
Tax Status
The Fund's Tax Status
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, the Fund must,
among other requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
o derive less than 30% of its gross income from the sale of securities
held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
Massachusetts State Income Tax
Individual shareholders of the Fund who are subject to Massachusetts income
taxation will not be required to pay Massachusetts income tax on that
portion of their dividends which are attributable to: interest earned on
Massachusetts tax-free municipal obligations; gain from the sale of certain
of such obligations; and interest earned on obligations of United States
territories or possessions, to the extent interest on such obligations is
exempt from taxation by the state pursuant to federal law. All remaining
dividends will be subject to Massachusetts income tax.
If a shareholder of the Fund is a Massachusetts business corporation or any
foreign business corporation which exercises its charter, qualifies to do
business, actually does business or owns or uses any part of its capital,
plant or other property in Massachusetts, then it will be subject to
Massachusetts excise taxation either as a tangible property corporation or
as an intangible property corporation. If the corporate shareholder is a
tangible property corporation, it will be taxed upon its net income
allocated to Massachusetts and the value of certain tangible property. If
it is an intangible property corporation, it will be taxed upon its net
income and net worth allocated to Massachusetts. Net income is gross income
less allowable deductions for federal income tax purposes, subject to
specified modifications. Dividends received from the Fund are includable in
gross income and generally may not be deducted by a corporate shareholder
in computing its net income. The corporation's shares in the Fund are not
includable in the computation of the tangible property base of a tangible
property corporation, but are includable in the computation of the net
worth base of an intangible property corporation.
Shares of Massachusetts Municipal Cash Trust will be exempt from local
property taxes in Massachusetts.

Yield
The Fund's yield for BayFunds Shares for the seven-day period ended October
31, 1994 was 2.71%. The yield for Institutional Service Shares was 2.78%
for the same period.
The Fund calculates the yield for both classes of shares daily, based upon
the seven days ending on the day of the calculation, called the "base
period." This yield is computed by:
o determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and (on funds that pay dividends daily) all dividends declared on
the original and any purchased shares;
o dividing the net change in the account's value by the value of the
account at the beginning of the base period to determine the base period
return; and
o multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in any
class of shares, the performance will be reduced for those shareholders
paying those fees.
Effective Yield
The Fund's effective yield for BayFunds Shares for the seven-day period
ended October 31, 1994 was 2.75%. The effective yield for Institutional
Service Shares was 2.82% for the same period.
The Fund's effective yield for both classes of Shares is computed by
compounding the unannualized base period return by:
o adding 1 to the base period return;
o raising the sum to the 365/7th power; and
o subtracting 1 from the result.

Performance Comparisons
The performance of Shares depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates on money market instruments;
o changes in the Fund's or any class of Shares' expenses; and
o the relative amount of Fund cash flow.

Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the compositions of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute
offering price. The financial publications and/or indices which the Fund
uses in advertising may include:

o Lipper Analytical Services, Inc., ranks funds in various fund categories
by making comparative calculations using total return. Total return
assumes the reinvestment of all income dividends and capital gains
distributions, if any. From time to time, the Fund will quote its Lipper
ranking in the "money market funds" category in advertising and sales
literature.

From time to time as it deems appropriate, the Fund may advertise the
performance of its shares using charts, graphs and description, compared to
federally insured bank products, including certificates of deposit and time
deposits, and to money market funds using the Lipper Analytical Services
money market instruments average. Unlike federally insured bank products,
the shares of the Fund are not insured.

Advertisements and other sales literature for BayFunds Shares may refer to
total return. Total return is the historic change in the value of an
investment in BayFunds Shares based on the monthly reinvestment of
dividends over a specified period of time.
0032603B (12/94)

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) Financial Statements: Incorporated by reference to the
Annual Reports to Shareholders of
the Funds dated December 31, 1994
(File No. 811-5911).
(b) Exhibits:
(1) Copy of Declaration of Trust of the Registrant
(1);
(i) Copy of the Declaration of Trust, as
amended (7);
(ii) Copy of Amendment No. 10, dated November
18,
1992, to the Declaration of Trust (12);
(iii) Conformed copy of Amendment No. 12, dated
Nov. 22, 1993, to the Declaration of Trust
(17);
(iv) Conformed copy of Amendment No. 13, dated
February 24, 1994, to the Declaration of
Trust (17);
(v) Conformed copy of Amendment No. 14, dated
August 25, 1994 (20);
(2) Copy of By-Laws of the Registrant (7);
(3) Not applicable;
(4) (i) Copy of Specimen Certificates for Shares
of Beneficial Interest of Alabama
Municipal Cash Trust, Minnesota Municipal
Cash Trust (Cash Series Shares and
Institutional Shares), Pennsylvania
Municipal Cash Trust (Cash Series Shares
and Institutional Service Shares),
Virginia Municipal Cash Trust
(Institutional Service Shares and
Institutional Shares), North Carolina
Municipal Cash Trust, Ohio Municipal Cash
Trust (Cash II Shares and Institutional
Shares), Massachusetts Municipal Cash
Trust (Institutional Service Shares and
BayFunds Shares), and New Jersey Municipal
Cash Trust (Institutional Shares and
Institutional Service Shares) (16);

______________________

1. Response is incorporated by reference to Registrant's
Initial Registration Statement on Form N-1A filed on September 29,
1989 (File Nos. 33-31259 and 811-5911).
7. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 6 on Form N-1A filed on November 6, 1990
(File Nos. 33-31259 and 811-5911).
12. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 14 on Form N-1A filed on December 23, 1992
(File Nos. 33-31251 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 21 on Form N-1A filed on December 29, 1993
(File Nos. 33-31251 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 22 on Form N-1A filed on March 2, 1994 (File
Nos. 33-31251 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 30 on Form N-1A
filed on September 19, 1994 (File Nos. 33-
31251 and 811-5911).
(ii) Copy of Specimen Certificate for Maryland
Municipal Cash Trust (17);
(iii) Copy of Specimen Certificate for Florida
Municipal Cash Trust (20)
(5) Copy of Investment Advisory Contract of the
Registrant (7);
(i) Conformed copy of Exhibit G to Investment
Advisory Contract for Virginia Municipal
Cash Trust (18);
(ii) Conformed copy of Exhibit H
to Investment Advisory Contract for
Alabama Municipal Cash Trust (19);
(iii) Conformed copy of Exhibit I
to Investment Advisory Contract for North
Carolina Municipal Cash Trust (19);
(iv) Conformed copy of Exhibit J
to Investment Advisory Contract for
Maryland Municipal Cash Trust (19);
(v) Conformed copy of Exhibit K
to Investment Advisory Contract for New
York Municipal Cash Trust; +
(vi) Conformed copy of Exhibit L to
Investment Advisory Contract for California
Municipal Cash Trust; +
(vii) Conformed copy of Exhibit M
to the Investment Advisory Contract for
Florida Municipal Cash Trust; +
(6) Copy of Distributor's Contract of the Registrant
(5);
(i) Conformed copy of Exhibit M
to Distributor's Contract; +
(ii) Conformed copy of Exhibit N
to the Distributor's Contract for Virginia
Municipal Cash Trust (19);
(iii) Conformed copy of Exhibit O
to the Distributor's Contract for Alabama
Municipal Cash Trust (19);

+ All exhibits have been filed electronically.
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed August 3, 1990 (File Nos. 33-31259 and
811-5911).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-31259
and 811-5911).
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed on December 24, 1992 (File Nos. 33-
31259 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on March 2, 1994 (File Nos. 33-31259
and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-31259
and 811-5911).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed on September 19, 1994 (File Nos. 33-
31259 and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).

(iv) Conformed copy of Exhibit P
to the Distributor's Contract for North
Carolina Municipal Cash Trust (19);
(v) Conformed copy of Exhibit Q
to the Distributor's Contract for Maryland
Municipal Cash Trust (19);
(vi) Conformed copy of Exhibit R
to the Distributor's Contract for New York
Municipal Cash Trust, Cash II Shares (21);
(vii) Conformed copy of Exhibit S
to the Distributor's Contract for New York
Municipal Cash Trust, Institutional
Service Shares (21);
(viii) Conformed copy of Exhibit T to
the Distributor's Contract for California
Municipal Cash Trust (21);
(ix) Conformed copy of Exhibit U
to the Distributor's Contract for Florida
Municipal Cash Trust; +
(7) Not applicable;
(8) (i) Conformed copy of Custodian Agreement of
the Registrant; +
(9) (i) Conformed copy of Transfer Agency
Agreement of the Registrant; +
(ii) Conformed copy of Sub-Transfer Agency
Agreement of the Registrant (Massachusetts
Municipal Cash Trust--BayFunds Shares
only)(15);
(iii) Conformed copy of Shareholder Services
Agreement of the Registrant (Massachusetts
Municipal Cash Trust--BayFunds Shares
only) (15);
(iv) Conformed copy of
Shareholder Services Agreement of the
Registrant; +
(v) Copy of Exhibit A to Shareholder Services
Agreement for Virginia Municipal Cash
Trust(17);
(vii) Copy of Exhibit B to Shareholder Services
Agreement for Maryland Municipal Cash
Trust (17);
(viii) Conformed copy of Shareholder Services
Plan of the Registrant; +

+ All exhibits have been filed electronically.
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 18 on Form N-1A filed on October 1, 1993 (File Nos. 33-31259
and 811-5911).
17. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 22 on Form N-1A filed on March 2, 1994
(File Nos. 33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-31259
and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
(ix) Conformed copy of Exhibit A to
Shareholder Services Plan for Virginia
Municipal Cash Trust-Institutional Service
Shares; (19)
(x) Conformed copy of Exhibit B to
Shareholder Services Plan for Maryland
Municipal Cash Trust; (18)
(xi) Form of Exhibit C to Shareholder Services
Plan for Florida Municipal Cash Trust; +
(xii) Conformed copy of Administrative Services
Agreement of the Registrant; +
(10) (i) Copy of Opinion and Consent of Counsel as
to the legality of shares for Minnesota
Municipal Cash Trust (5);
(ii) Copy of Opinion and Consent of Counsel as
to the legality of shares for New Jersey
Municipal Cash Trust (7);
(11) Conformed copy of Consent of Independent Public
Accountants; +
(12) Not applicable;
(13) Copy of Initial Capital Understanding (2);
(14) Not applicable.
(15) (i) Copy of Rule 12b-1 Plan of the Registrant
(7); Additional Exhibits to the Rule 12b-1
Plan and Agreement have been executed to
reflect the coverage of subsequently created
portfolios and/or classes under these
documents. Because these exhibits are
substantially identical but differ only as to
the Fund name, dates, and any other Fund -
specific information, pursuant to Rule 8b-31
of the Investment Company Act they need not
be filed.
(1) Conformed copy of Exhibit H to 12b-1
Plan for New York Municipal Cash Trust,
Cash II Shares (21);
(2) Conformed copy of Exhibit I to 12b-1
Plan for New York Municipal Cash Trust,
Institutional Service Shares (21);
(3) Conformed copy of Exhibit J to 12b-1
Plan for Florida Municipal Cash Trust; +

_________________________
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed on October 31, 1989
(File Nos. 33-31259 and 811-5911).
5. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 3 on Form N-1A filed August 3, 1990 (File
Nos. 33-31259 and 811-5911).
7. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 6 on Form N-1A filed on November 6, 1990
(File Nos. 33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-31259
and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
(16) Schedules for Computation of Performance Data;
(i) New Jersey Municipal Cash Trust (9);
(ii) Ohio Municipal Cash Trust (10);
(iii) Virginia Municipal Cash Trust
(Institutional Share and Institutional
Service Shares) (16);
(iv) Alabama Municipal Cash Trust (18);
(v) North Carolina Municipal Cash Trust (18);
(vi) Maryland Municipal Cash Trust (21);
(17) Financial Data Schedule;+
(18) Conformed copy of Opinion and Consent of Counsel
as to Availability of Rule 485 (b);+
(19) Conformed copy of Power of Attorney;+

Item 25. Persons Controlled by or Under Common Control with
Registrant:

None

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of December 2, 1994

Shares of beneficial
interest (no par value)

Alabama Municipal Cash Trust 172
California Municipal Cash Trust 481
Connecticut Municipal Cash Trust
Institutional Service Shares 948
Florida Municipal Cash Trust 63
Maryland Municipal Cash Trust 213
Massachusetts Municipal Cash Trust
Institutional Service Shares 239
BayFunds Shares 3
____________________________
+All exhibits have been filed electronically.
9. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 10 on Form N-1A filed on June 7, 1991
(File Nos. 33-31259 and 811-5911).
10. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 11 on Form N-1A filed on June 28, 1991
(File Nos. 33-31259 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 21 on Form N-1A filed on December 29, 1993
(File Nos. 33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-31259
and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
Number of Record Holders
Title of Class as of December 2, 1994

Minnesota Municipal Cash Trust
Cash Series Shares 184
Institutional Shares 41
New Jersey Municipal Cash Trust
Institutional Service Shares 120
Institutional Shares 32
New York Municipal Cash Trust
Cash II Shares 98
Institutional Service Shares 120
North Carolina Municipal Cash Trust 221
Ohio Municipal Cash Trust
Cash II Shares 136
Institutional Shares 53
Pennsylvania Municipal Cash Trust
Cash Series Shares 535
Institutional Service Shares 291
Virginia Municipal Cash Trust
Institutional Shares 23
Institutional Service Shares 437

Item 27. Indemnification: (3.)

Item 28. Business and Other Connections of Investment Adviser:

For a description of the other business of the investment
adviser, see the section entitled "Federated Municipal Trust
Information - Management of the Trust" in Part A. The
affiliations with the Registrant of four of the Trustees and
one of the Officers of the investment adviser are included
in Part B of this Registration Statement under "Federated
Municipal Trust Management - Officers and Trustees." The
remaining Trustee of the investment adviser, his position
with the investment adviser, and, in parentheses, his
principal occupation is: Mark D. Olson (Partner, Wilson,
Halbrook & Bayard), 107 W. Market Street, Georgetown,
Delaware 19947.

The remaining Officers of the investment adviser are:
William D. Dawson, J. Thomas Madden, Mark L. Mallon,
Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Gary J. Madich, and
J. Alan Minteer, Senior Vice Presidents; J. Scott Albrecht,
Randall A. Bauer, Jonathan C. Conley, Deborah A. Cunningham,
Michael P. Donnelly, Mark E. Durbiano, Kathleen M. Foody-
Malus, Thomas M. Franks, Edward C. Gonzales, Jeff A.
Kozemchak, Marian R. Marinack, John W. McGonigle, Gregory M.
Melvin, Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski,
Frederick L. Plautz, Jr., Charles A. Ritter, James D.
Roberge, and Christopher H. Wiles, Vice Presidents; Edward
C. Gonzales, Treasurer; and John W. McGonigle, Secretary.
The business address of each of the Officers of the
investment adviser is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the
Funds listed in Part B of this Registration Statement under
"The Funds."

3. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 1 on Form N-1A filed on March 22, 1990
(File Nos. 33-31259 and 811-5911).

Item 29. Principal Underwriters:

(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Cash Management Trust; Automated
Government Money Trust; BayFunds; The Biltmore Funds; The
Biltmore Municipal Funds; California Municipal Cash Trust; Cash
Trust Series, Inc.; Cash Trust Series II; DG Investor Series;
Edward D. Jones & Co. Daily Passport Cash Trust; Federated ARMs
Fund; Federated Exchange Fund, Ltd.; Federated GNMA Trust;
Federated Government Trust; Federated Growth Trust; Federated
High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-
Intermediate Government Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated U.S. Government Bond Fund; First Priority
Funds; First Union Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress
Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fountain Square Funds; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Independence One Mutual Funds; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate
Municipal Trust; International Series Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty Equity Income
Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty
Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; The Medalist Funds; Money Market Obligations
Trust; Money Market Trust; The Monitor Funds; Municipal
Securities Income Trust; New York Municipal Cash Trust; 111
Corcoran Funds; Peachtree Funds; The Planters Funds; Portage
Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; SouthTrust Vulcan Funds; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund,
Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds; Trademark Funds; Trust
for Financial Institutions; Trust for Government Cash Reserves;
Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; Vision Fiduciary Funds, Inc.; Vision
Group of Funds, Inc.; and World Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty Term
Trust, Inc.- 1999.
(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice Vice President
Federated Investors Tower President, and Treasurer, and Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.

John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael D. Fitzgerald Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert D. Oehlschlager Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jamie M. Teschner Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779

Item 30. Location of Accounts and Records:

Federated Municipal Trust Federated Investors
Tower
Registrant Pittsburgh, PA 15222-
3779

Federated Services Company
Transfer Agent, Dividend
Disbursing Agent and Federated Investors
Tower
Portfolio Recordkeeper Pittsburgh, PA 15222-
3779

Federative Administrative
Services Federated Investors
Tower
Administrator Pittsburgh, PA 15222-
3779

Federated Management Federated Investors
Tower
Adviser Pittsburgh, PA 15222-
3779

State Street Bank
Trust Company P.O. Box 8604
Custodian Boston, MA 02266-8604

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to comply with the provisions
of Section 16(c) of the 1940 Act with respect to the removal
of Trustees and the calling of special shareholder meetings
by shareholders.

Registrant hereby undertakes to file a post-effective
amendment on behalf of Florida Municipal Cash Trust, using
financial statements for such portfolio, which need not be
certified, within four to six months from the effective date
of Registrant's Post-Effective Amendment Nos. 29 and 30.

Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED MUNICIPAL TRUST,
has duly caused this Amendment to its Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 28th day of December,
1994.

FEDERATED MUNICIPAL TRUST

BY: /s/ G. Andrew Bonnewell
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
December 28, 1994

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ G. Andrew Bonnewell
G. Andrew Bonnewell Attorney In Fact December 28,
1994
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

Glen R. Johnson* President and Trustee

Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

William J. Copeland* Trustee

James E. Dowd* Trustee

Lawrence D. Ellis, M.D.* Trustee

Edward L. Flaherty, Jr.* Trustee

Peter E. Madden* Trustee

Gregor F. Meyer* Trustee

Wesley W. Posvar* Trustee

Marjorie P. Smuts* Trustee

* By Power of Attorney

Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK

ARTHUR ANDERSEN LLP

Pittsburgh, Pennsylvania

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use in Post-
Effective Amendment No. 32 to Form N-1A Registration Statement of Federated
Municipal Trust, of our report dated December 14, 1994, on the financial
statements of Federated Massachusetts Municipal Cash Trust (an investment
portfolio of Federated Municipal Trust), included in or made part of this
registration statement.

By: ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.

Pittsburgh, Pennsylvania,
December 22, 1994

HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)

MARIO SANTILLI, JR.
THEODORE M. HAMMER

December 15, 1994

Federated Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779

Gentlemen:

As counsel to Federated Municipal Trust ("Trust") we have reviewed Post-
effective Amendment No. 32 to the Trust's Registration Statement to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
(File No. 33-31259). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective pursuant to said
Rule on December 31, 1994.

Our review also included an examination of other relevant portions of
the amended 1933 Act Registration Statement of the Trust and such other
documents and records deemed appropriate. On the basis of this review we are
of the opinion that Post-effective Amendment No. 32 does not contain
disclosures which would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.

We hereby consent to the filing of this representation letter as a part
of the Trust's Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 and as part of any application or
registration statement filed under the Securities Laws of the States of the
United States.

Very truly yours,

Houston, Houston & Donnelly

By: /s/ Thomas J. Donnelly

TJD:heh

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of FEDERATED MUNICIPAL TRUST
and the Assistant General Counsel of Federated Investors, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead,
in any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by
means of the Securities and Exchange Commission's electronic disclosure system
known as EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to sign and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as each of them might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.

SIGNATURES TITLE DATE

/s/ John F. Donahue____________
John F. Donahue Chairman and Trustee December 28, 1994
(Chief Executive Officer)

/s/ Glen R. Johnson___________
Glen R. Johnson President and Trustee December 28, 1994

/s/ Edward C. Gonzales________
Edward C. Gonzales Vice President and Treasurer December 28, 1994
(Principal Financial and
Accounting Officer)

/s/ Thomas G Bigley___________ Trustee December 28, 1994
Thomas G Bigley

/s/ William J. Copeland_______ Trustee December 28, 1994
William J. Copeland

/s/ James E. Dowd_____________ Trustee December 28, 1994
James E. Dowd

/s/ Lawrence D. Ellis, M.D.___ Trustee December 28, 1994
Lawrence D. Ellis, M.D.

/s/ Edward L. Flaherty, Jr.___ Trustee December 28, 1994
Edward L. Flaherty, Jr.

SIGNATURES TITLE DATE

/s/ Gregor F. Meyer__________ Trustee December 28, 1994
Gregor F. Meyer

/s/ Wesley W. Posvar__________ Trustee December 28, 1994
Wesley W. Posvar

/s/ Marjorie P. Smuts_____ ___ Trustee December 28, 1994
Marjorie P. Smuts

/s/ Peter E. Madden__ _______ Trustee December 28, 1994
Peter E. Madden

/s/ John T. Conroy, Jr.______ Trustee December 28, 1994
John T. Conroy, Jr.

Sworn to and subscribed before me this 28th day of December, 1994

_/s/ Marie Hamm_____________________________
Marie Hamm
Notary Public

-1-
Exhibit 5(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT K
to the
Investment Advisory Contract

New York Municipal Cash Trust

For all services rendered by Adviser hereunder, the above-named Fund of
the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .40 of 1% of the average daily net assets of the Fund.

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .40 of 1% applied to the
daily net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser daily.

Witness the due execution hereof this 1st day of March, 1994.

Attest: FEDERATED MANAGEMENT

/s/ John W. McGonigle By: /s/ William D. Dawson, III
Secretary Executive Vice
President

Attest: FEDERATED MUNICIPAL TRUST

/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Assistant Secretary Vice
President

-1-
Exhibit 5(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT L
to the
Investment Advisory Contract

California Municipal Cash Trust

For all services rendered by Adviser hereunder, the above-named Fund of
the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .50 of 1% of the average daily net assets of the Fund.

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser daily.

Witness the due execution hereof this 1st day of March, 1994.

Attest: FEDERATED MANAGEMENT

/s/ John W. McGonigle By: /s/ William D. Dawson, III
Secretary Executive Vice
President

Attest: FEDERATED MUNICIPAL TRUST

/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Assistant Secretary Vice
President

-1-
Exhibit 5(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT M
to the
Investment Advisory Contract

Florida Municipal Cash Trust

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .40 of 1% applied to the
daily net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser daily.

Witness the due execution hereof this 1st day of September, 1994.

Attest: FEDERATED MANAGEMENT

/s/ John W. McGonigle By:/s/ William B. Dawson
Secretary Executive Vice
President

Attest: FEDERATED MUNICIPAL TRUST

/s/ S. Elliott Cohan By:/s/ J. Christopher Donahue
Assistant Secretary Vice President

-1-
Exhibit 6(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

Exhibit M
to the
Distributor's Contract

FEDERATED MUNICIPAL TRUST

Massachusetts Municipal Cash Trust
BayFunds Shares

In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to
the separate Classes of Shares thereof, first set forth in this Exhibit.

Witness the due execution hereof this 1st day of December, 1992

Attest: FEDERATED MUNICIPAL TRUST

/s/John W. McGonigle By:/s/Glen R. Johnson
Secretary President

(SEAL)

Attest: FEDERATED SECURITIES CORP.

/s/S. Elliott Cohan By:/s/Richard B. Fisher
Secretary President

(SEAL)

Exhibit 6(ix) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Exhibit U
to the
Distributor's Contract

FEDERATED MUNICIPAL TRUST

Florida Municipal Cash Trust

The following provisions are hereby incorporated and made part of
the Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
Classes of the Funds set forth above.

1. The Trust hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-listed
Portfolio ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of brokers ("Brokers") to sell Shares at the current
offering price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative support services
to the Trust and its shareholders. In addition, FSC is authorized to
select a group of administrators ("Administrators") to render
administrative support services to the Trust and its shareholders.

2. Administrative support services may include, but are not
limited to, the following functions: 1) account openings: the Broker
or Administrator communicates account openings via computer terminals
located on the Broker's or Administrator's premises; 2) account
closings: the Broker or Administrator communicates account closings via
computer terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or Administrator's own
personal computer or through the use of a toll-free telephone number; 4)
enter redemption transactions: Broker or Administrator enters
redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide
accounting support for all transactions. Broker or Administrator also
wires funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the
activity in the Trust's accounts, and provides training and supervision
of its personnel; 6) interest posting: Broker or Administrator posts
and reinvests dividends to the Trust's accounts; 7) prospectus and
shareholder reports: Broker or Administrator maintains and distributes
current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the
Broker or Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and develops methods
of making such materials accessible to customers; and 11) consultation
services: the Broker or Administrator continuously provides information
about the product needs of customers.

3. During the term of this Agreement, the Trust will pay FSC
for services pursuant to this Agreement, a monthly fee computed at the
annual rate of .25% of the average aggregate net asset value of the
Shares held during the month. For the month in which this Agreement
becomes effective or terminates, there shall be an appropriate proration
of any fee payable on the basis of the number of days that the Agreement
is in effect during the month.

4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.

5. FSC will enter into separate written agreements with
various firms to provide certain of the services set forth in Paragraph
1 herein. FSC, in its sole discretion, may pay Brokers and
Administrators a periodic fee in respect of Shares owned from time to
time by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid shall be determined from time to
time by FSC in its sole discretion.

6. FSC will prepare reports to the Board of Trustees of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.

Witness the due execution hereof this 1st day of September, 1994.

ATTEST: FEDERATED MUNICIPAL TRUST

/s/ John W. McGonigle By: /s/ Glen R. Johnson
Secretary President
(SEAL)

ATTEST: FEDERATED SECURITIES CORP.

/s/ S. Elliott Cohan By: /s/ Edward C. Gonzales
Secretary Executive Vice President
(SEAL)

Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

CUSTODIAN CONTRACT
Between

FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY

TABLE OF CONTENTS

Page
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities
2
2.2 Delivery of Securities
2
2.3 Registration of Securities
5
2.4 Bank Accounts
6
2.5 Payments for Shares
7
2.6 Availability of Federal Funds
7
2.7 Collection of Income
7
2.8 Payment of Fund Moneys
8
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund 9
2.11 Appointment of Agents
10
2.12 Deposit of Fund Assets in Securities System
10
2.13 Segregated Account
12
2.14 Joint Repurchase Agreements
13
2.15 Ownership Certificates for Tax Purposes
13
2.16 Proxies
13
2.17 Communications Relating to Fund Portfolio Securities
13
2.18 Proper Instructions
14
2.19 Actions Permitted Without Express Authority
14
2.20 Evidence of Authority
15
2.21 Notice to Trust by Custodian Regarding Cash Movement.
15
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 15
4. Records 16
5. Opinion of Funds' Independent Public Accountants/Auditors 16
6. Reports to Trust by Independent Public Accountants/Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22

CUSTODIAN CONTRACT

This Contract between those INVESTMENT COMPANIES listed on Exhibit 1, as
it may be amended from time to time, (the "Trust"), which may be
Massachusetts business trusts or Maryland corporations or have such other
form of organization as may be indicated, on behalf of the portfolios
(hereinafter collectively called the "Funds" and individually referred to
as a "Fund") of the Trust, having its principal place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company,
having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian", and FEDERATED
SERVICES COMPANY, a Delaware Business trust company, having its principal
place of business at Federated Investors Tower, Pittsburgh, Pennsylvania,
15222-3779, hereinafter called ("Company").

WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It

The Trust hereby employs the Custodian as the custodian of the assets
of each of the Funds of the Trust. Except as otherwise expressly
provided herein, the securities and other assets of each of the
Funds shall be segregated from the assets of each of the other Funds
and from all other persons and entities. The Trust will deliver to
the Custodian all securities and cash owned by the Funds and all
payments of income, payments of principal or capital distributions
received by them with respect to all securities owned by the Funds
from time to time, and the cash consideration received by them for
shares ("Shares") of beneficial interest/capital stock of the Funds
as may be issued or sold from time to time. The Custodian shall not
be responsible for any property of the Funds held or received by the
Funds and not delivered to the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of Section
2.18), the Custodian shall from time to time employ one or more sub-
custodians upon the terms specified in the Proper Instructions,
provided that the Custodian shall have no more or less
responsibility or liability to the Trust or any of the Funds on
account of any actions or omissions of any sub-custodian so employed
than any such sub-custodian has to the Custodian.

2.Duties of the Custodian With Respect to Property of the Funds Held by
the Custodian

2.1Holding Securities. The Custodian shall hold and physically segr
egate for the account of each Fund all non-cash property,
including all securities owned by each Fund, other than
securities which are maintained pursuant to Section 2.12 in a
clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities
System", or securities which are subject to a joint repurchase
agreement with affiliated funds pursuant to Section 2.14. The
Custodian shall maintain records of all receipts, deliveries and
locations of such securities, together with a current inventory
thereof, and shall conduct periodic physical inspections of
certificates representing stocks, bonds and other securities
held by it under this Contract in such manner as the Custodian
shall determine from time to time to be advisable in order to
verify the accuracy of such inventory. With respect to
securities held by any agent appointed pursuant to Section 2.11
hereof, and with respect to securities held by any sub-custodian
appointed pursuant to Section 1 hereof, the Custodian may rely
upon certificates from such agent as to the holdings of such
agent and from such sub-custodian as to the holdings of such sub-
custodian, it being understood that such reliance in no way
relieves the Custodian of its responsibilities under this
Contract. The Custodian will promptly report to the Trust the
results of such inspections, indicating any shortages or
discrepancies uncovered thereby, and take appropriate action to
remedy any such shortages or discrepancies.

2.2Delivery of Securities. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a
Securities System account of the Custodian only upon receipt of
Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following
cases:

(1)Upon sale of such securities for the account of a Fund and r
eceipt of payment therefor;

(2)Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Trust;

(3)In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.12 hereof;

(4)To the depository agent in connection with tender or other s
imilar offers for portfolio securities of a Fund, in
accordance with the provisions of Section 2.17 hereof;

(5)To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;

(6)To the issuer thereof, or its agent, for transfer into the n
ame of a Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any
agent appointed pursuant to Section 2.11 or into the name
or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to
the Custodian;

(7)Upon the sale of such securities for the account of a Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery custom";
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's
own failure to act in accordance with the standard of
reasonable care or any higher standard of care imposed upon
the Custodian by any applicable law or regulation if such
above-stated standard of reasonable care were not part of
this Contract;

(8)For exchange or conversion pursuant to any plan of merger, c
onsolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;

(9)In the case of warrants, rights or similar securities, the s
urrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;

(10)For delivery in connection with any loans of portfolio secu
rities of a Fund, but only against receipt of adequate
collateral in the form of (a) cash, in an amount specified
by the Trust, (b) certificated securities of a description
specified by the Trust, registered in the name of the Fund
or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, or (c)
securities of a description specified by the Trust,
transferred through a Securities System in accordance with
Section 2.12 hereof;

(11)For delivery as security in connection with any borrowings
requiring a pledge of assets by a Fund, but only against
receipt of amounts borrowed, except that in cases where
additional collateral is required to secure a borrowing
already made, further securities may be released for the
purpose;

(12)For delivery in accordance with the provisions of any agree
ment among the Trust or a Fund, the Custodian and a broker-
dealer registered under the Securities Exchange Act of
1934, as amended, (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions for a Fund;

(13)For delivery in accordance with the provisions of any agree
ment among the Trust or a Fund, the Custodian, and a
Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract
Market, or any similar organization or organizations,
regarding account deposits in connection with transaction
for a Fund;

(14)Upon receipt of instructions from the transfer agent ("Tran
sfer Agent") for a Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, in satisfaction of requests by
holders of Shares for repurchase or redemption; and

(15)For any other proper corporate purpose, but only upon recei
pt of, in addition to Proper Instructions, a certified copy
of a resolution of the Executive Committee of the Trust on
behalf of a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth
the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom delivery of such
securities shall be made.

2.3 Registration of Securities. Securities held by the Custodian (o
ther than bearer securities) shall be registered in the name of
a particular Fund or in the name of any nominee of the Fund or
of any nominee of the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Trust has authorized in
writing the appointment of a nominee to be used in common with
other registered investment companies affiliated with the Fund,
or in the name or nominee name of any agent appointed pursuant
to Section 2.11 or in the name or nominee name of any sub-
custodian appointed pursuant to Section 1. All securities
accepted by the Custodian on behalf of a Fund under the terms of
this Contract shall be in "street name" or other good delivery
form.

2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the name of each Fund, subject only
to draft or order by the Custodian acting pursuant to the terms
of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from
or for the account of each Fund, other than cash maintained in a
joint repurchase account with other affiliated funds pursuant to
Section 2.14 of this Contract or by a particular Fund in a bank
account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940, as amended, (the "1940
Act"). Funds held by the Custodian for a Fund may be deposited
by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as it
may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each
such bank or trust company and the funds to be deposited with
each such bank or trust company shall be approved by vote of a
majority of the Board of Trustees/Directors ("Board") of the
Trust. Such funds shall be deposited by the Custodian in its
capacity as Custodian for the Fund and shall be withdrawable by
the Custodian only in that capacity. If requested by the Trust,
the Custodian shall furnish the Trust, not later than twenty
(20) days after the last business day of each month, an internal
reconciliation of the closing balance as of that day in all
accounts described in this section to the balance shown on the
daily cash report for that day rendered to the Trust.

2.5Payments for Shares. The Custodian shall make such arrangements
with the Transfer Agent of each Fund, as will enable the
Custodian to receive the cash consideration due to each Fund and
will deposit into each Fund's account such payments as are
received from the Transfer Agent. The Custodian will provide
timely notification to the Trust and the Transfer Agent of any
receipt by it of payments for Shares of the respective Fund.

2.6Availability of Federal Funds. Upon mutual agreement between the
Trust and the Custodian, the Custodian shall make federal funds
available to the Funds as of specified times agreed upon from
time to time by the Trust and the Custodian in the amount of
checks, clearing house funds, and other non-federal funds
received in payment for Shares of the Funds which are deposited
into the Funds' accounts.

2.7 Collection of Income.

(1)The Custodian shall collect on a timely basis all income and
other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by
law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date
of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such
income, as collected, to each Fund's custodian account.
Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when
they become due and shall collect interest when due on
securities held hereunder. The collection of income due
the Funds on securities loaned pursuant to the provisions
of Section 2.2 (10) shall be the responsibility of the
Trust. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Trust
with such information or data as may be necessary to assist
the Trust in arranging for the timely delivery to the
Custodian of the income to which each Fund is properly
entitled.

(2)The Custodian shall promptly notify the Trust whenever income
due on securities is not collected in due course and will
provide the Trust with monthly reports of the status of
past due income unless the parties otherwise agree.

2.8Payment of Fund Moneys. Upon receipt of Proper Instructions, whi
ch may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of each Fund in the
following cases only:

(1)Upon the purchase of securities, futures contracts or options
on futures contracts for the account of a Fund but only (a)
against the delivery of such securities, or evidence of
title to futures contracts, to the Custodian (or any bank,
banking firm or trust company doing business in the United
States or abroad which is qualified under the 1940 Act to
act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of
the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer, (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set
forth in Section 2.12 hereof or (c) in the case of
repurchase agreements entered into between the Trust and
any other party, (i) against delivery of the securities
either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Fund;

(2)In connection with conversion, exchange or surrender of secu
rities owned by a Fund as set forth in Section 2.2 hereof;

(3)For the redemption or repurchase of Shares of a Fund issued
by the Trust as set forth in Section 2.10 hereof;

(4)For the payment of any expense or liability incurred by a Fu
nd, including but not limited to the following payments for
the account of the Fund: interest; taxes; management,
accounting, transfer agent and legal fees; and operating
expenses of the Fund, whether or not such expenses are to
be in whole or part capitalized or treated as deferred
expenses;

(5)For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;

(6)For payment of the amount of dividends received in respect of
securities sold short;

(7)For any other proper purpose, but only upon receipt of, in a
ddition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on
behalf of a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring
such purpose to be a proper purpose, and naming the person
or persons to whom such payment is to be made.

2.9Liability for Payment in Advance of Receipt of Securities Purchas
ed. In any and every case where payment for purchase of
securities for the account of a Fund is made by the Custodian in
advance of receipt of the securities purchased, in the absence
of specific written instructions from the Trust to so pay in
advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had
been received by the Custodian.

2.10Payments for Repurchases or Redemptions of Shares of a Fund. Fr
om such funds as may be available for the purpose of
repurchasing or redeeming Shares of a Fund, but subject to the
limitations of the Declaration of Trust/Articles of
Incorporation and any applicable votes of the Board of the Trust
pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for
payment to holders of shares of such Fund who have delivered to
the Transfer Agent a request for redemption or repurchase of
their shares including without limitation through bank drafts,
automated clearinghouse facilities, or by other means. In
connection with the redemption or repurchase of Shares of the
Funds, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders.

2.11Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other
bank or trust company which is itself qualified under the 1940
Act and any applicable state law or regulation, to act as a
custodian, as its agent to carry out such of the provisions of
this Section 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.

2.12Deposit of Fund Assets in Securities System. The Custodian may
deposit and/or maintain securities owned by the Funds in a
clearing agency registered with the Securities and Exchange
Commission ("SEC") under Section 17A of the Exchange Act, which
acts as a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and
SEC rules and regulations, if any, and subject to the following
provisions:

(1)The Custodian may keep securities of each Fund in a Securities System
provided that such
securities are represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the Custodian
other than
assets held as a fiduciary, custodian or otherwise for customers;

(2)The records of the Custodian with respect to securities of the Funds
which are
maintained in a Securities System shall identify by book-entry those
securities
belonging to each Fund;

(3)The Custodian shall pay for securities purchased for the account of each
Fund upon (i)
receipt of advice from the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on the
records of the
Custodian to reflect such payment and transfer for the account of
the Fund. The
Custodian shall transfer securities sold for the account of a Fund upon
(i) receipt of
advice from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the
Custodian to reflect such transfer and payment for the account of the
Fund. Copies of
all advices from the Securities System of transfers of securities for
the account of a
Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be
provided to the Trust at its request. Upon request, the Custodian shall
furnish the
Trust confirmation of each transfer to or from the account of a Fund in
the form of a
written advice or notice and shall furnish to the Trust copies of daily
transaction
sheets reflecting each day's transactions in the Securities System for
the account of
a Fund.

(4)The Custodian shall provide the Trust with any report obtained by the
Custodian on the
Securities System's accounting system, internal accounting control and
procedures for
safeguarding securities deposited in the Securities System;

(5)The Custodian shall have received the initial certificate, required by
Section 9 hereof;

(6)Anything to the contrary in this Contract notwithstanding, the Custodian
shall be liable
to the Trust for any loss or damage to a Fund resulting from use of the
Securities
System by reason of any negligence, misfeasance or misconduct of the
Custodian or any
of its agents or of any of its or their employees or from failure of the
Custodian or
any such agent to enforce effectively such rights as it may have against the
Securities System; at the election of the Trust, it shall be entitled to
be subrogated
to the rights of the Custodian with respect to any claim against the
Securities System
or any other person which the Custodian may have as a consequence of any
such loss or
damage if and to the extent that a Fund has not been made whole for any
such loss or
damage.

(7)The authorization contained in this Section 2.12 shall not relieve the
Custodian from
using reasonable care and diligence in making use of any Securities System.

2.13Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or
accounts for and on behalf of each Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section 2.12 hereof, (i) in accordance with the provisions of
any agreement among the Trust, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or
any futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission
or any registered contract market), or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund, (ii)
for purpose of segregating cash or government securities in
connection with options purchased, sold or written for a Fund or
commodity futures contracts or options thereon purchased or sold
for a Fund, (iii) for the purpose of compliance by the Trust or
a Fund with the procedures required by any release or releases
of the SEC relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Board or of the Executive Committee
signed by an officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.

2.14Joint Repurchase Agreements. Upon the receipt of Proper Instruc
tions, the Custodian shall deposit and/or maintain any assets of
a Fund and any affiliated funds which are subject to joint
repurchase transactions in an account established solely for
such transactions for the Fund and its affiliated funds. For
purposes of this Section 2.14, "affiliated funds" shall include
all investment companies and their portfolios for which
subsidiaries or affiliates of Federated Investors serve as
investment advisers, distributors or administrators in
accordance with applicable exemptive orders from the SEC. The
requirements of segregation set forth in Section 2.1 shall be
deemed to be waived with respect to such assets.

2.15Ownership Certificates for Tax Purposes. The Custodian shall ex
ecute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of a Fund
held by it and in connection with transfers of securities.

2.16Proxies. The Custodian shall, with respect to the securities he
ld hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered
otherwise than in the name of a Fund or a nominee of a Fund, all
proxies, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Trust such
proxies, all proxy soliciting materials and all notices relating
to such securities.

2.17Communications Relating to Fund Portfolio Securities. The Custo
dian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of calls
and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put
options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the
Custodian from issuers of the securities being held for the
Fund. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Trust all written information
received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Trust desires to
take action with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall notify the
Custodian in writing at least three business days prior to the
date on which the Custodian is to take such action. However,
the Custodian shall nevertheless exercise its best efforts to
take such action in the event that notification is received
three business days or less prior to the date on which action is
required.

2.18Proper Instructions. Proper Instructions as used throughout this
Section 2 means a writing signed or initialed by one or more
person or persons as the Board shall have from time to time
authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the Custodian
reasonably believes them to have been given by a person
previously authorized in Proper Instructions to give such
instructions with respect to the transaction involved, and (b)
the Trust promptly causes such oral instructions to be confirmed
in writing. Upon receipt of a certificate of the Secretary or
an Assistant Secretary as to the authorization by the Board of
the Trust accompanied by a detailed description of procedures
approved by the Board, Proper Instructions may include
communications effected directly between electro-mechanical or
electronic devices provided that the Board and the Custodian are
satisfied that such procedures afford adequate safeguards for a
Fund's assets.

2.19Actions Permitted Without Express Authority. The Custodian may
in its discretion, without express authority from the Trust:

(1)make payments to itself or others for minor expenses of hand
ling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Trust in such form that it
may be allocated to the affected Fund;

(2)surrender securities in temporary form for securities in def
initive form;

(3)endorse for collection, in the name of a Fund, checks, drafts
and other negotiable instruments; and

(4)in general, attend to all non-discretionary details in conne
ction with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and
property of each Fund except as otherwise directed by the
Trust.

2.20Evidence of Authority. The Custodian shall be protected in acti
ng upon any instructions, notice, request, consent, certificate
or other instrument or paper reasonably believed by it to be
genuine and to have been properly executed on behalf of a Fund.
The Custodian may receive and accept a certified copy of a vote
of the Board of the Trust as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or
(b) of any determination of or any action by the Board pursuant
to the Declaration of Trust/Articles of Incorporation as
described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written
notice to the contrary.

2.21Notice to Trust by Custodian Regarding Cash Movement. The Custo
dian will provide timely notification to the Trust of any
receipt of cash, income or payments to the Trust and the release
of cash or payment by the Trust.

3.Duties of Custodian With Respect to the Books of Account and Calculati
on of Net Asset Value and Net Income.

The Custodian shall cooperate with and supply necessary information to t
he entity or entities appointed by the Board of the Trust to keep
the books of account of each Fund and/or compute the net asset value
per share of the outstanding Shares of each Fund or, if directed in
writing to do so by the Trust, shall itself keep such books of
account and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net income of
a Fund as described in the Fund's currently effective prospectus and
Statement of Additional Information ("Prospectus") and shall advise
the Trust and the Transfer Agent daily of the total amounts of such
net income and, if instructed in writing by an officer of the Trust
to do so, shall advise the Transfer Agent periodically of the
division of such net income among its various components. The
calculations of the net asset value per share and the daily income
of a Fund shall be made at the time or times described from time to
time in the Fund's currently effective Prospectus.

4. Records.

The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as
will meet the obligations of the Trust and the Funds under the 1940
Act, with particular attention to Section 31 thereof and Rules 31a-1
and 31a-2 thereunder, and specifically including identified cost
records used for tax purposes. All such records shall be the
property of the Trust and shall at all times during the regular
business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Trust and employees
and agents of the SEC. In the event of termination of this
Contract, the Custodian will deliver all such records to the Trust,
to a successor Custodian, or to such other person as the Trust may
direct. The Custodian shall supply daily to the Trust a tabulation
of securities owned by a Fund and held by the Custodian and shall,
when requested to do so by the Trust and for such compensation as
shall be agreed upon between the Trust and the Custodian, include
certificate numbers in such tabulations.

5. Opinion of Funds' Independent Public Accountants/Auditors.

The Custodian shall take all reasonable action, as the Trust may from
time to time request, to obtain from year to year favorable opinions
from each Fund's independent public accountants/auditors with
respect to its activities hereunder in connection with the
preparation of the Fund's registration statement, periodic reports,
or any other reports to the SEC and with respect to any other
requirements of such Commission.

6. Reports to Trust by Independent Public Accountants/Auditors.

The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system,
internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian for the
Fund under this Contract; such reports shall be of sufficient scope
and in sufficient detail, as may reasonably be required by the
Trust, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination and, if there
are no such inadequacies, the reports shall so state.

7. Compensation of Custodian.

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between Company and the Custodian.

8. Responsibility of Custodian.

The Custodian shall be held to a standard of reasonable care in
carrying out the provisions of this Contract; provided, however,
that the Custodian shall be held to any higher standard of care
which would be imposed upon the Custodian by any applicable law or
regulation if such above stated standard of reasonable care was not
part of this Contract. The Custodian shall be entitled to rely on
and may act upon advice of counsel (who may be counsel for the
Trust) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice, provided that
such action is not in violation of applicable federal or state laws
or regulations, and is in good faith and without negligence.
Subject to the limitations set forth in Section 15 hereof, the
Custodian shall be kept indemnified by the Trust but only from the
assets of the Fund involved in the issue at hand and be without
liability for any action taken or thing done by it in carrying out
the terms and provisions of this Contract in accordance with the
above standards.

In order that the indemnification provisions contained in this
Section 8 shall apply, however, it is understood that if in any case
the Trust may be asked to indemnify or save the Custodian harmless,
the Trust shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood
that the Custodian will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification. The Trust shall have the option to defend the
Custodian against any claim which may be the subject of this
indemnification, and in the event that the Trust so elects it will
so notify the Custodian and thereupon the Trust shall take over
complete defense of the claim, and the Custodian shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this Section. The Custodian shall
in no case confess any claim or make any compromise in any case in
which the Trust will be asked to indemnify the Custodian except with
the Trust's prior written consent.

Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemptions effected by check shall be in accordance
with a separate Agreement entered into between the Custodian and the
Trust.

If the Trust requires the Custodian to take any action with respect
to securities, which action involves the payment of money or which
action may, in the reasonable opinion of the Custodian, result in
the Custodian or its nominee assigned to a Fund being liable for the
payment of money or incurring liability of some other form, the
Custodian may request the Trust, as a prerequisite to requiring the
Custodian to take such action, to provide indemnity to the Custodian
in an amount and form satisfactory to the Custodian.

Subject to the limitations set forth in Section 15 hereof, the Trust
agrees to indemnify and hold harmless the Custodian and its nominee
from and against all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) (referred to herein as
authorized charges) incurred or assessed against it or its nominee
in connection with the performance of this Contract, except such as
may arise from it or its nominee's own failure to act in accordance
with the standard of reasonable care or any higher standard of care
which would be imposed upon the Custodian by any applicable law or
regulation if such above-stated standard of reasonable care were not
part of this Contract. To secure any authorized charges and any
advances of cash or securities made by the Custodian to or for the
benefit of a Fund for any purpose which results in the Fund
incurring an overdraft at the end of any business day or for
extraordinary or emergency purposes during any business day, the
Trust hereby grants to the Custodian a security interest in and
pledges to the Custodian securities held for the Fund by the
Custodian, in an amount not to exceed 10 percent of the Fund's gross
assets, the specific securities to be designated in writing from
time to time by the Trust or the Fund's investment adviser. Should
the Trust fail to make such designation, or should it instruct the
Custodian to make advances exceeding the percentage amount set forth
above and should the Custodian do so, the Trust hereby agrees that
the Custodian shall have a security interest in all securities or
other property purchased for a Fund with the advances by the
Custodian, which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of the Trust
instructing their purchase shall be considered the requisite
description and designation of the property so pledged for purposes
of the requirements of the Uniform Commercial Code. Should the
Trust fail to cause a Fund to repay promptly any authorized charges
or advances of cash or securities, subject to the provision of the
second paragraph of this Section 8 regarding indemnification, the
Custodian shall be entitled to use available cash and to dispose of
pledged securities and property as is necessary to repay any such
advances.

9. Effective Period, Termination and Amendment.

This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.12 hereof
in the absence of receipt of an initial certificate of the Secretary
or an Assistant Secretary that the Board of the Trust has approved
the initial use of a particular Securities System as required in
each case by Rule 17f-4 under the 1940 Act; provided further,
however, that the Trust shall not amend or terminate this Contract
in contravention of any applicable federal or state regulations, or
any provision of the Declaration of Trust/Articles of Incorporation,
and further provided, that the Trust may at any time by action of
its Board (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or
(ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the
appropriate banking regulatory agency or upon the happening of a
like event at the direction of an appropriate regulatory agency or
court of competent jurisdiction.

Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.

10. Successor Custodian.

If a successor custodian shall be appointed by the Board of the
Trust, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed
and in the form for transfer, all securities then held by it
hereunder for each Fund and shall transfer to separate accounts of
the successor custodian all of each Fund's securities held in a
Securities System.

If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of
the Board of the Trust, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance
with such vote.

In the event that no written order designating a successor custodian
or certified copy of a vote of the Board shall have been delivered
to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver
to a bank or trust company, which is a "bank" as defined in the 1940
Act, (delete "doing business ... Massachusetts" unless SSBT is the
Custodian) doing business in Boston, Massachusetts, of its own
selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$100,000,000, all securities, funds and other properties held by the
Custodian and all instruments held by the Custodian relative thereto
and all other property held by it under this Contract for each Fund
and to transfer to separate accounts of such successor custodian
all of each Fund's securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.

In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof
owing to failure of the Trust to procure the certified copy of the
vote referred to or of the Board to appoint a successor custodian,
the Custodian shall be entitled to fair compensation for its
services during such period as the Custodian retains possession of
such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.

11. Interpretive and Additional Provisions.

In connection with the operation of this Contract, the Custodian and
the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of
this Contract. Any such interpretive or additional provisions shall
be in a writing signed by both parties and shall be annexed hereto,
provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any
provision of the Declaration of Trust/Articles of Incorporation. No
interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this
Contract.

12. Massachusetts Law to Apply.

This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.

13. Notices.

Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or
to the Custodian at address for SSBT only: 225 Franklin Street,
Boston, Massachusetts, 02110, or to such other address as the Trust
or the Custodian may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.

14. Counterparts.

This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.

15. Limitations of Liability.

The Custodian is expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust of
those Trusts which are business trusts and agrees that the
obligations and liabilities assumed by the Trust and any Fund
pursuant to this Contract, including, without limitation, any
obligation or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the relevant Fund
and its assets and that the Custodian shall not seek satisfaction of
any such obligation from the shareholders of the relevant Fund, from
any other Fund or its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In addition, in
connection with the discharge and satisfaction of any claim made by
the Custodian against the Trust, for whatever reasons, involving
more than one Fund, the Trust shall have the exclusive right to
determine the appropriate allocations of liability for any such
claim between or among the Funds.

IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed effective as of the 1st day of
December, 1993.

ATTEST: INVESTMENT COMPANIES (Except those
listed below)

/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman

ATTEST: STATE STREET BANK AND TRUST
COMPANY

/s/ Ed McKenzie______________ By /s/ F. J. Sidoti, Jr.___________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President

ATTEST: FEDERATED SERVICES COMPANIY

/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President

EXHIBIT 1
Federated Municipal Trust

Alabama Municipal Cash Trust
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Institutional Service Shares
Florida Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
BayFunds Shares
Institutional Service Shares
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Services Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Cash II Shares
Institutional Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares

State Street Bank
Custody/PortRec Fee Schedule
Federated Investors
Federated Funds
Page 1
ceg : JUL93_FeeSched_SSB_Cust/PortRec
Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT

AGREEMENT made as of the 1st day of December, 1994, by and between
those investment companies listed on Exhibit 1 as may be amended from
time to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"), on
behalf of the portfolios (individually referred to herein as a "Fund" and
collectively as "Funds") of the Trust, and FEDERATED SERVICES COMPANY, a
Delaware business trust, having its principal office and place of
business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-
3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of capital stock or
beneficial interest ("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide certain
pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes") if so
indicated on Exhibit 1, and the Company is willing to furnish such
services; and
WHEREAS, the Trust may desire to appoint the Company as its transfer
agent, dividend disbursing agent if so indicated on Exhibit 1, and agent
in connection with certain other activities, and the Company desires to
accept such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent to
select, negotiate and subcontract for custodian services from an approved
list of qualified banks if so indicated on Exhibit 1, and the Company
desires to accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to State Street Bank and Trust Company or
another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds, and/or the Classes, for the period and
on the terms set forth in this Agreement. The Company accepts such
appointment and agrees to furnish the services herein set forth in return
for the compensation as provided in Article 3 of this Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust with
regard to fund accounting for the Trust, and/or the Funds, and/or the
Classes, and in connection therewith undertakes to perform the following
specific services;
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent
pricing services selected by the Company in consultation with the
adviser, or sources selected by the adviser, and reviewed by the
board; secondarily, if a designated pricing service does not
provide a price for a security which the Company believes should
be available by market quotation, the Company may obtain a price
by calling brokers designated by the investment adviser of the
fund holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own to
find brokers to price those securities; thirdly, for securities
for which no market price is available, the Pricing Committee of
the Board will determine a fair value in good faith. Consistent
with Rule 2a-4 of the 40 Act, estimates may be used where
necessary or appropriate. The Company's obligations with regard
to the prices received from outside pricing services and
designated brokers or other outside sources, is to exercise
reasonable care in the supervision of the pricing agent. The
Company is not the guarantor of the securities prices received
from such agents and the Company is not liable to the Fund for
potential errors in valuing a Fund's assets or calculating the
net asset value per share of such Fund or Class when the
calculations are based upon such prices. All of the above
sources of prices used as described are deemed by the Company to
be authorized sources of security prices. The Company provides
daily to the adviser the securities prices used in calculating
the net asset value of the fund, for its use in preparing
exception reports for those prices on which the adviser has
comment. Further, upon receipt of the exception reports
generated by the adviser, the Company diligently pursues
communication regarding exception reports with the designated
pricing agents.

B. Determine the net asset value per share of each Fund and/or Class,
at the time and in the manner from time to time determined by the
Board and as set forth in the Prospectus and Statement of
Additional Information ("Prospectus") of each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds resulting
from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund, and/or
Class, as required under Section 31(a) of the 1940 Act and the
Rules thereunder in connection with the services provided by the
Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940
Act the records to be maintained by Rule 31a-1 under the 1940 Act
in connection with the services provided by the Company. The
Company further agrees that all such records it maintains for the
Trust are the property of the Trust and further agrees to
surrender promptly to the Trust such records upon the Trust's
request;
G. At the request of the Trust, prepare various reports or other
financial documents required by federal, state and other
applicable laws and regulations; and
H. Such other similar services as may be reasonably requested by the
Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with the
fees agreed upon from time to time between the parties hereto.
Such fees do not include out-of-pocket disbursements of the
Company for which the Funds shall reimburse the Company upon
receipt of a separate invoice. Out-of-pocket disbursements shall
include, but shall not be limited to, the items agreed upon
between the parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear the
cost of: custodial expenses; membership dues in the Investment
Company Institute or any similar organization; transfer agency
expenses; investment advisory expenses; costs of printing and
mailing stock certificates, Prospectuses, reports and notices;
administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and other
governmental agencies; fees of Trustees or Directors of the
Trust; independent auditors expenses; Federated Administrative
Services and/or Federated Administrative Services, Inc. legal and
audit department expenses billed to Federated Services Company
for work performed related to the Trust, the Funds, or the
Classes; law firm expenses; or other expenses not specified in
this Article 3 which may be properly payable by the Funds and/or
classes.
C. The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company.
The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.
E. The fee for the period from the effective date of this Agreement
with respect to a Fund or a Class to the end of the initial month
shall be prorated according to the proportion that such period
bears to the full month period. Upon any termination of this
Agreement before the end of any month, the fee for such period
shall be prorated according to the proportion which such period
bears to the full month period. For purposes of determining fees
payable to the Company, the value of the Fund's net assets shall
be computed at the time and in the manner specified in the Fund's
Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited to
assist it in performing services under this Section One. Such
person or persons may be third-party service providers, or they
may be officers and employees who are employed by both the
Company and the Funds. The compensation of such person or
persons shall be paid by the Company and no obligation shall be
incurred on behalf of the Trust, the Funds, or the Classes in
such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the
Trust hereby appoints the Company to act as, and the Company agrees to
act as, transfer agent and dividend disbursing agent for each Fund's
Shares, and agent in connection with any accumulation, open-account or
similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic investment
plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the Board
shall have from time to time authorized. Each such writing shall set
forth the specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a) the Company
reasonably believes them to have been given by a person previously
authorized in Proper Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust, or the Fund, and the
Company promptly cause such oral instructions to be confirmed in writing.
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Trust, or the
Fund, and the Company are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Trust as
to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of the
relevant Fund, (the "Custodian"). The Company shall notify
the Fund and the Custodian on a daily basis of the total
amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute and
issue the appropriate number of Shares of each Fund and/or
Class and hold such Shares in the appropriate Shareholder
accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or
its agent requests a certificate, the Company, as Transfer
Agent, shall countersign and mail by first class mail, a
certificate to the Shareholder at its address as set forth
on the transfer books of the Funds, and/or Classes, subject
to any Proper Instructions regarding the delivery of
certificates.
(4) In the event that any check or other order for the purchase
of Shares of the Fund and/or Class is returned unpaid for
any reason, the Company shall debit the Share account of
the Shareholder by the number of Shares that had been
credited to its account upon receipt of the check or other
order, promptly mail a debit advice to the Shareholder, and
notify the Fund and/or Class of its action. In the event
that the amount paid for such Shares exceeds proceeds of
the redemption of such Shares plus the amount of any
dividends paid with respect to such Shares, the Fund
and/the Class or its distributor will reimburse the Company
on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance with
the provisions of its governing document and the then-
current Prospectus of the Fund. The Company shall prepare
and mail or credit income, capital gain, or any other
payments to Shareholders. As the Dividend Disbursing
Agent, the Company shall, on or before the payment date of
any such distribution, notify the Custodian of the
estimated amount required to pay any portion of said
distribution which is payable in cash and request the
Custodian to make available sufficient funds for the cash
amount to be paid out. The Company shall reconcile the
amounts so requested and the amounts actually received with
the Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits shall be made
to the Shareholder's account, for certificated Funds and/or
Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund
and Class and advise the Trust, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or
set forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the Funds on a daily basis of the total amount of
redemption requests processed and monies paid to the
Company by the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds
from the Custodian with respect to any redemption, the
Company shall pay or cause to be paid the redemption
proceeds in the manner instructed by the redeeming
Shareholders, pursuant to procedures described in the then-
current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request
for redemption does not comply with the procedures for
redemption approved by the Fund, the Company shall promptly
notify the Shareholder of such fact, together with the
reason therefor, and shall effect such redemption at the
price applicable to the date and time of receipt of
documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned accounts
and uncashed checks for state escheat requirements on an
annual basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each
Fund, and/or Class, and maintain pursuant to applicable
rules of the Securities and Exchange Commission ("SEC") a
record of the total number of Shares of the Fund and/or
Class which are authorized, based upon data provided to it
by the Fund, and issued and outstanding. The Company shall
also provide the Fund on a regular basis or upon reasonable
request with the total number of Shares which are
authorized and issued and outstanding, but shall have no
obligation when recording the issuance of Shares, except as
otherwise set forth herein, to monitor the issuance of such
Shares or to take cognizance of any laws relating to the
issue or sale of such Shares, which functions shall be the
sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by
the Trust or the Fund to include a record for each
Shareholder's account of the following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price for all
transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case of
a foreign account or an account for which withholding
is required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by
this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such
record retention shall be at the expense of the Company,
and such records may be inspected by the Fund at reasonable
times. The Company may, at its option at any time, and
shall forthwith upon the Fund's demand, turn over to the
Fund and cease to retain in the Company's files, records
and documents created and maintained by the Company
pursuant to this Agreement, which are no longer needed by
the Company in performance of its services or for its
protection. If not so turned over to the Fund, such
records and documents will be retained by the Company for
six years from the year of creation, during the first two
of which such documents will be in readily accessible form.
At the end of the six year period, such records and
documents will either be turned over to the Fund or
destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in
each state for "blue sky" purposes as determined
according to Proper Instructions delivered from time
to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption
fees, or other transaction- or sales-related
payments;
(f) Such other information as may be agreed upon from time
to time.
(2) The Company shall prepare in the appropriate form, file with
the Internal Revenue Service and appropriate state
agencies, and, if required, mail to Shareholders, such
notices for reporting dividends and distributions paid as
are required to be so filed and mailed and shall withhold
such sums as are required to be withheld under applicable
federal and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth
above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account
or similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder reports
and Prospectuses to current Shareholders, withholding
taxes on accounts subject to back-up or other
withholding (including non-resident alien accounts),
preparing and filing reports on U.S. Treasury
Department Form 1099 and other appropriate forms
required with respect to dividends and distributions
by federal authorities for all Shareholders,
preparing and mailing confirmation forms and
statements of account to Shareholders for all
purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts,
preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to monitor
the total number of Shares of each Fund and/or Class
sold in each state ("blue sky reporting"). The Fund
shall by Proper Instructions (i) identify to the
Company those transactions and assets to be treated
as exempt from the blue sky reporting for each state
and (ii) verify the classification of transactions
for each state on the system prior to activation and
thereafter monitor the daily activity for each state.
The responsibility of the Company for each Fund's
and/or Class's state blue sky registration status is
limited solely to the recording of the initial
classification of transactions or accounts with
regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other
correspondence as may from time to time be addressed to the
Company;
(2) The Company shall prepare Shareholder meeting lists, mail
proxy cards and other material supplied to it by the Fund
in connection with Shareholder Meetings of each Fund;
receive, examine and tabulate returned proxies, and certify
the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of,
such certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the preparation,
contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of
the Securities Act of 1933, as amended (the "1933 Act"), the 1940
Act and any laws, rules and regulations of government authorities
having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by facsimile,
if authorized by the Trust and shall bear the seal of the Trust
or facsimile thereof; and notwithstanding the death, resignation
or removal of any officer of the Trust authorized to sign
certificates, the Company may continue to countersign
certificates which bear the manual or facsimile signature of such
officer until otherwise directed by the Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any Fund's shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company an
annual maintenance fee for each Shareholder account as agreed
upon between the parties and as may be added to or amended from
time to time. Such fees may be changed from time to time subject
to written agreement between the Trust and the Company. Pursuant
to information in the Fund Prospectus or other information or
instructions from the Fund, the Company may sub-divide any Fund
into Classes or other sub-components for recordkeeping purposes.
The Company will charge the Fund the same fees for each such
Class or sub-component the same as if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed
upon between the parties, as may be added to or amended from time
to time. In addition, any other expenses incurred by the Company
at the request or with the consent of the Trust and/or the Fund,
will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company.
The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.

Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section
Two may be assigned by either party without the written consent of the
other party.
A. This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and
assigns.
B. The Company may without further consent on the part of the Trust
subcontract for the performance hereof with (A) State Street Bank
and its subsidiary, Boston Financial Data Services, Inc., a
Massachusetts Trust ("BFDS"), which is duly registered as a
transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934, as amended, or any succeeding statute
("Section 17A(c)(1)"), or (B) a BFDS subsidiary duly registered
as a transfer agent pursuant to Section 17A(c)(1), or (C) a BFDS
affiliate, or (D) such other provider of services duly registered
as a transfer agent under Section 17A(c)(1) as Company shall
select; provided, however, that the Company shall be as fully
responsible to the Trust for the acts and omissions of any
subcontractor as it is for its own acts and omissions; or
C. The Company shall upon instruction from the Trust subcontract for
the performance hereof with an Agent selected by the Trust, other
than BFDS or a provider of services selected by Company, as
described in (2) above; provided, however, that the Company shall
in no way be responsible to the Trust for the acts and omissions
of the Agent.
SECTION THREE: Custody Services Procurement
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and obtain
custody services from a financial institution that (i) meets the criteria
established in Section 17(f) of the 1940 Act and (ii) has been approved
by the Board as eligible for selection by the Company as a custodian (the
"Eligible Custodian"). The Company accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Trust as
Custodian of the Trust's assets substantially on the terms set
forth as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for the
benefit of the Trust, with the Trust as a party to each such
agreement. The Company shall not be a party to any agreement
with any such Custodian;
D. establish procedures to monitor the nature and the quality of the
services provided by the Custodians;
E. continuously monitor the nature and the quality of services
provided by the Custodians; and
F. periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature and
amount of disbursement made on account of the Trust with respect
to each custodial agreement; and (iii) such other information as
the Board shall reasonably request to enable it to fulfill its
duties and obligations under Sections 17(f) and 36(b) of the 1940
Act and other duties and obligations thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three of
this Agreement, the Trust and/or the Fund agree to pay the
Company an annual fee as agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed
upon between the parties, as may be added to or amended from time
to time. In addition, any other expenses incurred by the Company
at the request or with the consent of the Trust and/or the Fund,
will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company.
The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.

Article 12. Representations.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to
enter into this arrangement and to provide the services contemplated in
Section Three of this Agreement.

SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates of
the Trust or the Funds in the forms approved by the Board
of the Trust with a certificate of the Secretary of the
Trust as to such approval;
(4) All account application forms and other documents relating
to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in effect
with respect to the sale of Shares of any Fund, and/or
Class;
(3) A certified copy of each amendment to the governing document
and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement,
and shareholder recordkeeping or transfer agency services;
(5) Specimens of all new Share certificates representing Shares
of any Fund, accompanied by Board resolutions approving
such forms;
(6) Such other certificates, documents or opinions which the
Company may, in its discretion, deem necessary or
appropriate in the proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.

Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State
of Delaware.
(3) It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
(6) It is in compliance with federal securities law requirements
and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and
in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under
this Agreement;
(3) All corporate proceedings required by said Charter and By-
Laws have been taken to authorize it to enter into and
perform its obligations under this Agreement;
(4) The Trust is an open-end investment company registered under
the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with respect
to all Shares of each Fund being offered for sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in
carrying out the provisions of this Contract. The Company shall be
entitled to rely on and may act upon advice of counsel (who may be
counsel for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice, provided that such action is not in violation of
applicable federal or state laws or regulations, and is in good
faith and without negligence.

B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and
affiliates, harmless against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising
out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-adviser
or other party contracted by or approved by the Trust or
Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf of
the Fund, its Shareholders or investors regarding the
purchase, redemption or transfer of Shares and
Shareholder account information;
(b) are received by the Company from independent pricing
services or sources for use in valuing the assets of
the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the Trust
of Fund for use in the performance of services under
this Agreement;
(d) have been prepared and/or maintained by the Fund or
its affiliates or any other person or firm on behalf
of the Trust.
(3) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the
Trust or the Fund.
(4) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such
Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of
such Shares in such state.
Provided, however, that the Company shall not be protected
by this Article 15.A. from liability for any act or
omission resulting from the Company's willful misfeasance,
bad faith, negligence or reckless disregard of its duties
of failure to meet the standard of care set forth in 15.A.
above.
C. Reliance
At any time the Company may apply to any officer of the Trust or
Fund for instructions, and may consult with legal counsel with
respect to any matter arising in connection with the services to
be performed by the Company under this Agreement, and the Company
and its agents or subcontractors shall not be liable and shall be
indemnified by the Trust or the appropriate Fund for any action
reasonably taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel provided such
action is not in violation of applicable federal or state laws or
regulations. The Company, its agents and subcontractors shall be
protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Trust or the Fund, and the
proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party who
may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such
claim. The party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the
other party may be required to indemnify it except with the other
party's prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust exercise
its rights to terminate, all out-of-pocket expenses associated with the
movement of records and materials will be borne by the Trust or the
appropriate Fund. Additionally, the Company reserves the right to charge
for any other reasonable expenses associated with such termination. The
provisions of Article 15 shall survive the termination of this Agreement.

Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by
both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Charter. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Company
at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to
such other address as the Trust or the Company may hereafter specify,
shall be deemed to have been properly delivered or given hereunder to the
respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of the
Trust, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or Shareholders of the Trust, but bind only the
appropriate property of the Fund, or Class, as provided in the
Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Company and signed by an authorized officer of the
Company, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or Shareholders of the Company, but bind only
the property of the Company as provided in the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to such
successor agent at the office of the Company all properties of the Trust
held by it hereunder. If no such successor agent shall be appointed, the
Company shall at its office upon receipt of Proper Instructions deliver
such properties in accordance with such instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or before
the date when such termination shall become effective, then the Company
shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $2,000,000, all properties held by the
Company under this Agreement. Thereafter, such bank or trust company
shall be the successor of the Company under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result of
work stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility of
performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign
to a successor all of or a substantial portion of its business, or to a
party controlling, controlled by, or under common control with such
party. Nothing in this Article 28 shall prevent the Company from
delegating its responsibilities to another entity to the extent provided
herein.

Article 29. Severability.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first
above written.

ATTEST: INVESTMENT COMPANIES (listed on Exhibit 1)

/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman

ATTEST: FEDERATED SERVICES COMPANY

/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President

EXHIBIT 1
Federated Municipal Trust

Page 1
Exhibit 9(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SHAREHOLDER SERVICES AGREEMENT

AGREEMENT made as of the first day of March, 1994, by and between those
investment companies listed on Exhibit 1, as may be amended from time to time,
having their principal office and place of business at Federated Investors
Tower, Pittsburgh, PA 15222-3779 and who have approved a Shareholder Services
Plan (the "Plan") and this form of Agreement (individually referred to herein
as a "Fund" and collectively as "Funds") and Federated Shareholder Services, a
Delaware business trust, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS").
1. The Funds hereby appoint FSS to render or cause to be rendered
personal services to shareholders of the Funds and/or the maintenance of
accounts of shareholders of the Funds ("Services"). In addition to providing
Services directly to shareholders of the Funds, FSS is hereby appointed the
Funds' agent to select, negotiate and subcontract for the performance of
Services. FSS hereby accepts such appointments. FSS agrees to provide or
cause to be provided Services which, in its best judgment (subject to
supervision and control of the Funds' Boards of Trustees or Directors, as
applicable), are necessary or desirable for shareholders of the Funds. FSS
further agrees to provide the Funds, upon request, a written description of
the Services which FSS is providing hereunder.
2. During the term of this Agreement, each Fund will pay FSS and FSS
agrees to accept as full compensation for its services rendered hereunder a
fee at an annual rate, calculated daily and payable monthly, up to 0.25% of 1%
of average net assets of each Fund.
For the payment period in which this Agreement becomes effective or
terminates with respect to any Fund, there shall be an appropriate proration
of the monthly fee on the basis of the number of days that this Agreement is
in effect with respect to such Fund during the month. To enable the Funds to
comply with an applicable exemptive order, FSS represents that the fees
received pursuant to this Agreement will be disclosed to and authorized by any
person or entity receiving Services, and will not result in an excessive fee
to FSS.
3. This Agreement shall continue in effect for one year from the date of
its execution, and thereafter for successive periods of one year only if the
form of this Agreement is approved at least annually by the Board of each
Fund, including a majority of the members of the Board of the Fund who are not
interested persons of the Fund and have no direct or indirect financial
interest in the operation of the Funds' Plan or in any related documents to
the Plan ("Independent Board Members") cast in person at a meeting called for
that purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the vote of
a majority of the Independent Board Members of any Fund or by a
vote of a majority of the outstanding voting securities of any
Fund as defined in the Investment Company Act of 1940 on sixty
(60) days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940; and
(c) by any party to the Agreement without cause by giving the other
party at least sixty (60) days' written notice of its intention
to terminate.
5. FSS agrees to obtain any taxpayer identification number certification
from each shareholder of the Funds to which it provides Services that is
required under Section 3406 of the Internal Revenue Code, and any applicable
Treasury regulations, and to provide each Fund or its designee with timely
written notice of any failure to obtain such taxpayer identification number
certification in order to enable the implementation of any required backup
withholding.
6. FSS shall not be liable for any error of judgment or mistake of law
or for any loss suffered by any Fund in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
FSS shall be entitled to rely on and may act upon advice of counsel (who may
be counsel for such Fund) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice. Any person,
even though also an officer, trustee, partner, employee or agent of FSS, who
may be or become a member of such Fund's Board, officer, employee or agent of
any Fund, shall be deemed, when rendering services to such Fund or acting on
any business of such Fund (other than services or business in connection with
the duties of FSS hereunder) to be rendering such services to or acting solely
for such Fund and not as an officer, trustee, partner, employee or agent or
one under the control or direction of FSS even though paid by FSS.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination
is sought.
8. FSS is expressly put on notice of the limitation of liability as set
forth in the Declaration of Trust of each Fund that is a Massachusetts
business trust and agrees that the obligations assumed by each such Fund
pursuant to this Agreement shall be limited in any case to such Fund and its
assets and that FSS shall not seek satisfaction of any such obligations from
the shareholders of such Fund, the Trustees, Officers, Employees or Agents of
such Fund, or any of them.
9. The execution and delivery of this Agreement have been authorized by
the Trustees of FSS and signed by an authorized officer of FSS, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of FSS, but bind only the trust property of FSS as provided in
the Declaration of Trust of FSS.
10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if delivered to
any Fund and to such Fund at the following address: Federated Investors
Tower, Pittsburgh, PA 15222-3779, Attention: President and if delivered to
FSS at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.
11. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written. If any provision of this Agreement shall be
held or made invalid by a court or regulatory agency decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by Pennsylvania law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the Investment Company Act of 1940 or any rule or regulation promulgated by
the Securities and Exchange Commission thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.
13. This Agreement shall not be assigned by any party without the
prior written consent of FSS in the case of assignment by any Fund, or of the
Funds in the case of assignment by FSS, except that any party may assign to a
successor all of or a substantial portion of its business to a party
controlling, controlled by, or under common control with such party. Nothing
in this Section 14 shall prevent FSS from delegating its responsibilities to
another entity to the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

Investment Companies (listed on Exhibit 1)

By: /s/ John F. Donahue
John F. Donahue
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

Federated Shareholder Services

By: /s/ James J. Dolan

Title: President

Attest: /s/ John W. McGonigle
John W. McGonigle

EXHIBIT 1
Federated Municipal Trust

Page 1
Exhibit 9(viii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SHAREHOLDER SERVICES PLAN
This Shareholder Services Plan ("Plan") is adopted as of this 1st day of
March, 1994, by the Boards of Directors or Trustees, as applicable (the
"Boards"), of those investment companies listed on Exhibit 1 hereto as may be
amended from time to time, having their principal office and place of business
at Federated Investors Tower, Pittsburgh, PA 15222-3779 (individually
referred to herein as a "Fund" and collectively as "Funds").
1. This Plan is adopted to allow the Funds to make payments as
contemplated herein to obtain certain personal services for shareholders
and/or the maintenance of shareholder accounts ("Services").
2. This Plan is designed to compensate Federated Shareholder Services
("FSS") for providing personal services and/or the maintenance of shareholder
accounts to the Funds and their shareholders. In compensation for the
services provided pursuant to this Plan, FSS may be paid a monthly fee
computed at the annual rate not to exceed .25 of 1% of the average aggregate
net asset value of the shares of each Fund held during the month.
3. Any payments made by the Funds to FSS pursuant to this Plan will be
made pursuant to a "Shareholder Services Agreement" between FSS and each of
the Funds.
4. Quarterly in each year that this Plan remains in effect, FSS shall
prepare and furnish to the Boards of the Funds, and the Boards shall review, a
written report of the amounts expended under the Plan.
5. This Plan shall become effective with regard to each Fund (i) after
approval by majority votes of: (a) such Fund's Board; and (b) the members of
the Board of such Fund who are not interested persons of such Fund and have no
direct or indirect financial interest in the operation of such Fund's Plan or
in any related documents to the Plan ("Independent Trustees or Directors"),
cast in person at a meeting called for the purpose of voting on the Plan.
6. This Plan shall remain in effect with respect to each Fund presently
set forth on an exhibit and any subsequent Fund added pursuant to an exhibit
during the initial year of this Plan for the period of one year from the date
set forth above and may be continued thereafter if this Plan is approved with
respect to each Fund at least annually by a majority of the relevant Fund's
Board and a majority of the Independent Trustees or
Directors, of such Fund as applicable, cast in person at a meeting
called for the purpose of voting on the renewal of such Plan. If this Plan
is adopted with respect to a fund after the first annual approval by the
Trustees or Directors as described above, this Plan will be effective as to
that Fund at such time as Exhibit 1 hereto is amended to add such Fund and
will continue in effect until the next annual approval of this Plan by the
Funds' Boards and thereafter for successive periods of one year subject to
approval as described above.
7. All material amendments to this Plan must be approved by a vote of
the Board of each Fund and of the Independent Directors or Trustees of such
Fund, cast in person at a meeting called for such purpose.
8. This Plan may be terminated as follows:
(a) at any time, without the payment of any penalty, by the vote of
a majority of the Independent Board Members of any Fund or by a
vote of a majority of the outstanding voting securities of any
Fund as defined in the Investment Company Act of 1940 on sixty
(60) days' written notice to the parties to this Agreement; or
(b) by any party to the Agreement without cause by giving the other
party at least sixty (60) days' written notice of its intention
to terminate.
9. While this Plan shall be in effect, the selection and nomination of
Independent Directors or Trustees of each Fund shall be committed to the
discretion of the Independent Directors or Trustees then in office.
10. All agreements with any person relating to the implementation of
this Plan shall be in writing and any agreement related to this Plan shall be
subject to termination, without penalty, pursuant to the provisions of
Paragraph 8 herein.
11. This Plan shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Witness the due execution hereof this as of the date set forth above.

Investment Companies (listed on Exhibit 1)

By: /s/ John F. Donahue
John F. Donahue
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

Federated Shareholder Services

By: /s/ James J. Dolan

Title: President

Attest: /s/ John W. McGonigle
John W. McGonigle
EXHIBIT 1
Federated Municipal Trust

Exhibit 9(xi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT C
to the
Plan

FEDERATED MUNICIPAL TRUST

Florida Municipal Cash Trust

This Plan is adopted by FEDERATED MUNICIPAL TRUST with respect to
the Shares of the Portfolio of the Trust set forth above.

In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of .25
of 1% of the average aggregate net asset value of the Shares of Florida
Municipal Cash Trust held during the month.

Witness the due execution hereof this 1st day of September, 1994.

FEDERATED MUNICIPAL TRUST

By:
President

Page 1
Exhibit 9(xii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
ADMINISTRATIVE SERVICES AGREEMENT

This Administrative Services Agreement is made as of this first day of
March, 1994, between those investment companies listed on Exhibit 1, as may be
amended from time to time, having their principal office and place of business
at Federated Investors Tower, Pittsburgh PA 15222-3779 (individually referred
to herein as "Fund" and collectively referred to as "Funds), on behalf of the
portfolios of the Funds, and Federated Administrative Services, a Delaware
business trust (herein called "FAS").
WHEREAS, the Funds desire to retain FAS as their Administrator to provide
them with Administrative Services (as herein defined), and FAS is willing to
render such services;
WHEREAS, the Funds are registered as open-end management investment
companies under the Investment Company Act of 1940, as amended (the "1940
Act"), with authorized and issued shares of capital stock or beneficial
interest ("Shares"); and
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Funds hereby appoint FAS as
Administrator of the Funds on the terms and conditions set forth in this
Agreement; and FAS hereby accepts such appointment and agrees to perform the
services and duties set forth in Section 2 of this Agreement in consideration
of the compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to the supervision
and control of the Funds' Boards of Trustees or Directors, as applicable (the
"Boards"), FAS will provide facilities, equipment, and personnel to carry out
the following administrative services for operation of the business and affairs
of the Funds and each of their portfolios:
(a) prepare, file, and maintain the Funds' governing documents and any
amendments thereto, including the Declaration of Trust or Articles
of Incorporation, as appropriate,(which has already been prepared
and filed), the By-laws and minutes of meetings of their Boards,
Committees, and shareholders;
(b) prepare and file with the Securities and Exchange Commission and
the appropriate state securities authorities the registration
statements for the Funds and the Funds' shares and all amendments
thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents all as
may be necessary to enable the Funds to make continuous offerings
of their shares, as applicable;
(c) prepare, negotiate, and administer contracts on behalf of the
Funds with, among others, each Fund's investment adviser,
distributor, custodian, and transfer agent, subject to any
applicable restrictions of the Boards or the 1940 Act;
(d) supervise the Funds' custodians in the maintenance of the Funds'
general ledgers and in the preparation of the Funds' financial
statements, including oversight of expense accruals and payments,
the determination of the net asset value of the Funds and the
declaration and payment of dividends and other distributions to
shareholders;
(e) calculate performance data of the Funds for dissemination to
information services covering the investment company industry;
(f) prepare and file the Funds' tax returns;
(g) examine and review the operations of the Funds' custodians and
transfer agents;
(h) coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i) perform internal audit examinations in accordance with a charter
to be adopted by FAS and the Funds;
(j) assist with the design, development, and operation of the Funds;
(k) provide individuals reasonably acceptable to the Funds' Boards for
nomination, appointment, or election as officers of the Funds, who
will be responsible for the management of certain of the Funds'
affairs as determined by the Funds' Boards; and
(l) consult with the Funds and their Boards of Trustees or Directors,
as appropriate, on matters concerning the Funds and their affairs.
The foregoing, along with any additional services that FAS shall agree in
writing to perform for the Funds hereunder, shall hereafter be referred to as
"Administrative Services." Administrative Services shall not include any
duties, functions, or services to be performed for any Fund by such Fund's
investment adviser, distributor, custodian, transfer agent, or shareholder
service agent, pursuant to their respective agreements with such Fund.
3. Expenses. FAS shall be responsible for expenses incurred in providing
office space, equipment, and personnel as may be necessary or convenient to
provide the Administrative Services to the Fund, including the compensation of
FAS employees who serve on the Funds' Boards, or as officers of the Funds.
Each Fund shall be responsible for all other expenses incurred by FAS on behalf
of such Fund, including without limitation postage and courier expenses,
printing expenses, travel expenses, registration fees, filing fees, fees of
outside counsel and independent auditors, insurance premiums, fees payable to
members of such Fund's Board who are not FAS employees, and trade association
dues.
4. Compensation. For the Administrative Services provided, each Fund
hereby agrees to pay and FAS hereby agrees to accept as full compensation for
its services rendered hereunder an administrative fee at an annual rate,
payable daily, as specified below, based upon the total assets of all of the
Funds:
Maximum Administrative Average Daily Net Assets
Fee of the Funds
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
However, in no event shall the administrative fee received during any
year of this Agreement be less than, or be paid at a rate less than would
aggregate, $125,000, per individual Fund, with an additional $30,000 for each
class of shares added to any such Fund after the date hereof.
5. Standard of Care.
(a) FAS shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. FAS
shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for such Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice. Any person, even though also an officer,
trustee, partner, employee or agent of FAS, who may be or become a
member of such Fund's Board, officer, employee or agent of any
Fund, shall be deemed, when rendering services to such Fund or
acting on any business of such Fund (other than services or
business in connection with the duties of FAS hereunder) to be
rendering such services to or acting solely for such Fund and not
as an officer, trustee, partner, employee or agent or one under
the control or direction of FAS even though paid by FAS.
(b) This Section 5 shall survive termination of this Agreement.
6. Duration and Termination. The initial term of this Agreement with
respect to each Fund shall commence on the date hereof, and extend for a period
of one year, renewable annually by the approval of the Board of
Directors/Trustees of each Fund.
7. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
8. Limitations of Liability of Trustees or Officers, Employees, Agents
and Shareholders of the Funds. FAS is expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust of each Fund
that is a Massachusetts business trust and agrees that the obligations assumed
by each such Fund pursuant to this Agreement shall be limited in any case to
such Fund and its assets and that FAS shall not seek satisfaction of any such
obligations from the shareholders of such Fund, the Trustees, Officers,
Employees or Agents of such Fund, or any of them.
9. Limitations of Liability of Trustees and Shareholders of FAS. The
execution and delivery of this Agreement have been authorized by the Trustees
of FAS and signed by an authorized officer of FAS, acting as such, and neither
such authorization by such Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or shareholders of FAS, but
bind only the trust property of FAS as provided in the Declaration of Trust of
FAS.
10. Notices. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to any Fund at the following address: Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President and if delivered to FAS at
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President.
11. Miscellaneous. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject hereof whether oral or written. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court or
regulatory agency decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the provisions of Section
5, hereof, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and shall be governed by
Pennsylvania law; provided, however, that nothing herein shall be construed in
a manner inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission thereunder.
12. Counterparts. This Agreement may be executed by different parties
on separate counterparts, each of which, when so executed and delivered, shall
be an original, and all such counterparts shall together constitute one and the
same instrument.
13. Assignment; Successors. This Agreement shall not be assigned by
any party without the prior written consent of FAS, in the case of assignment
by any Fund, or of the Funds, in the case of assignment by FAS, except that any
party may assign to a successor all of or a substantial portion of its business
to a party controlling, controlled by, or under common control with such party.
Nothing in this Section 14 shall prevent FAS from delegating its
responsibilities to another entity to the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

Investment Companies (listed on Exhibit 1)

By: /s/ John F. Donahue
John F. Donahue
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

Federated Administrative Services

By: /s/ Edward C. Gonzales
Edward C. Gonzales
Chairman

Attest: /s/ John W. McGonigle
John W. McGonigle

EXHIBIT 1
Federated Municipal Trust

Exhibit 15(i)(3) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

EXHIBIT J
to the
Plan

FEDERATED MUNICIPAL TRUST

Florida Municipal Cash Trust

This Plan is adopted by FEDERATED MUNICIPAL TRUST with respect to
the Shares of the Portfolio of the Trust set forth above.

In compensation for the services provided pursuant to this Plan,
FSC will be paid a monthly fee computed at the annual rate of .25 of 1%
of the average aggregate net asset value of Shares of Florida Municipal
Cash Trust held during the month.

Witness the due execution hereof this 1st day of September, 1994.

FEDERATED MUNICIPAL TRUST

By: /s/ Glen R. Johnson
President

<S> <C>

<ARTICLE> 6
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 131,056,993
<INVESTMENTS-AT-VALUE> 131,056,993
<RECEIVABLES> 752,648
<ASSETS-OTHER> 339,824
<OTHER-ITEMS-ASSETS> 0
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<EXPENSES-NET> 734,388
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 679,179
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 51,046,608
<NUMBER-OF-SHARES-REDEEMED> 27,958,997
<SHARES-REINVESTED> 681,051
<NET-CHANGE-IN-ASSETS> 29,257,700
<ACCUMULATED-NII-PRIOR> 0
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<AVERAGE-NET-ASSETS> 128,658,582
<PER-SHARE-NAV-BEGIN> 1.000
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<AVG-DEBT-PER-SHARE> .000

</TABLE>