CASH TRUST SERIES II, 485BPOS, 1999-09-24

CASH TRUST SERIES II
485BPOS, 1999-09-24

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1933 Act File No. 33-38550
1940 Act File No. 811-6269

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. 13 ............................ X
------- ------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
------

Amendment No. 12 ........................................... X
------- ------

CASH TRUST SERIES II

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)

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

John W. McGonigle, Esquire
1001 Liberty Avenue
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on September 30, 1999 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.

Copies to:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037

PROSPECTUS
Municipal Cash Series II

A Portfolio of Cash Trust Series II

A money market mutual fund seeking current income exempt from federal regular
income tax consistent with stability of principal by investing in a portfolio of
high-quality tax exempt securities maturing in 397 days or less.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

SEPTEMBER 30, 1999

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 3

What are the Fund's Investment Strategies? 4

What are the Principal Securities in Which

the Fund Invests? 5

What are the Specific Risks of Investing in the Fund? 5

What Do Shares Cost? 6

How is the Fund Sold? 6

How to Purchase Shares 7

How to Redeem Shares 8

Account and Share Information 10

Who Manages the Fund? 10

Last Meeting of Shareholders 11

Financial Information 13

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is current income exempt
from federal regular income tax consistent with stability of principal. While
there is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the strategies and policies described in this
prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests in a portfolio of high-quality tax exempt securities maturing
in 397 days or less. At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax. Interest from the Fund's investments may
be subject to the alternative minimum tax for individuals and corporations
(AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90
days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.

The Fund's Shares are not sold subject to a sales charge (load). The total
returns displayed above are based upon net asset value.

The Fund's total return for the six-month period from January 1, 1999 to June
30, 1999 was 1.28%.

Within the period shown in the Chart, the Fund's highest quarterly return was
0.90% (quarter ended June 30, 1995). Its lowest quarterly return was 0.45%
(quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Average Annual Total Returns for the
calendar periods ending December 31, 1998.

<TABLE>

CALENDAR PERIOD FUND
<S> <C>
1 Year 2.94%
5 Years 2.96%
Start of Performance 1 2.97%

</TABLE>

1 The Fund's start of performance date was February 13, 1991.

The Fund's 7-Day Net Yield as of December 31, 1998 was 3.06%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.

What are the Fund's Fees and Expenses?

MUNICIPAL CASH SERIES II

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>

SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or redemption proceeds,
as applicable) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions) (as a percentage of offering price) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (Before Waiver) 1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets)
Management Fee 2 0.50%
Distribution (12b-1) Fee 0.20%
Shareholder Services Fee None
Other Expenses 0.18%
Total Annual Fund Operating Expenses 0.88%
1 Although not contractually obligated to do so, the adviser waived certain
amounts. These are shown below along with the net expenses the Fund actually paid
for the fiscal year ended May 31, 1999.
Total Waiver of Fund Expenses 0.07%
Total Actual Annual Fund Operating Expenses (after waiver) 0.81%
2 The adviser voluntarily waived a portion of the management fee during the year
ended May 31, 1999. The adviser can terminate this voluntary waiver at any time.
The management fee paid by the Fund (after voluntary waiver) was 0.43% for the
fiscal year ended May 31, 1999.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Shares' operating expenses are BEFORE WAIVERS as shown in
the Table and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>

<S> <C>
1 Year $ 88
3 Years $ 281
5 Years $ 488
10 Years $1,084

</TABLE>

What are the Fund's Investment Strategies?

The Fund invests in a portfolio of high-quality tax exempt securities maturing
in 397 days or less. At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax. Interest from the Fund's investments may
be subject to federal (AMT). The dollar-weighted average maturity of the Fund's
portfolio will be 90 days or less. The Fund's investment adviser (Adviser)
actively manages the Fund's portfolio, seeking to limit the credit risk taken by
the Fund and select investments with enhanced yields.

The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized statistical rating organizations services.

The Adviser targets an average portfolio maturity based upon its interest rate
outlook and the tax exempt securities available. The Adviser formulates its
interest rate outlook by analyzing a variety of factors such as current and
expected U.S. economic growth; current and expected interest rates and
inflation; and the Federal Reserve's monetary policy. The Adviser structures the
portfolio by investing primarily in variable rate demand instruments and
municipal notes. The Adviser generally shortens the portfolio's maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.

TEMPORARY DEFENSIVE INVESTMENTS

The Fund may temporarily depart from its principal investment strategies by
investing its assets in securities subject to federal income tax. It may do this
to minimize potential losses and maintain liquidity to meet shareholder
redemptions during adverse market conditions. This may cause the Fund to receive
and distribute taxable income to investors.

What are the Principal Securities in Which the Fund Invests?

TAX EXEMPT SECURITIES

Tax exempt securities are fixed income securities that pay interest that is not
subject to federal income taxes. Fixed income securities pay interest, dividends
or distributions at a specified rate. The rate may be fixed or adjusted
periodically. The issuer must also repay the principal amount of the security,
normally within a specified time.

Typically, states, counties, cities and other political subdivisions and
authorities issue tax exempt securities. The market categorizes tax exempt
securities by their source of repayment.

VARIABLE RATE DEMAND INSTRUMENTS

Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Fund
treats demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond 397 days.

MUNICIPAL NOTES

Municipal notes are short-term tax exempt securities. Many municipalities issue
such notes to fund their current operations before collecting taxes or other
municipal revenues. Municipalities may also issue notes to fund capital projects
prior to issuing long-term bonds. The issuers typically repay the notes at the
end of their fiscal year, either with taxes, other revenues or proceeds from
newly issued notes or bonds.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.

INVESTMENT RATINGS

What are the Specific Risks of Investing in the Fund?

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely on the Adviser's credit assessment.

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

SECTOR RISKS

A substantial part of the Fund's portfolio may be comprised of securities credit
enhanced by banks or companies with similar characteristics. As a result, the
Fund will be more susceptible to any economic, business, political or other
developments which generally affect these entities.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time) and as of the end of regular trading (normally 4:00
p.m. Eastern time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $25,000. The required
minimum subsequent investment amount is $500.

An institutional investor's minimum investment is calculated by combining all
accounts it maintains with the Fund. Accounts established through investment
professionals may be subject to a smaller minimum investment amount. Keep in
mind that investment professionals may charge you fees for their services in
connection with your Share transactions.

How is the Fund Sold?

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to customers of financial institutions such as banks,
fiduciaries, custodians of public funds, investment advisers and broker/dealers,
or individuals, directly or through investment professionals. The Fund may not
be a suitable investment for retirement plans.

When the Distributor receives marketing fees, it may pay some or all of them to
investment professionals. The Distributor and its affiliates may pay out of
their assets other amounts (including items of material value) to investment
professionals for marketing and servicing Shares. The Distributor is a
subsidiary of Federated Investors, Inc. (Federated).

RULE 12B-1 PLAN

The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's Shares. Because these Shares pay marketing fees
on an ongoing basis, your investment cost may be higher over time than other
shares with different sales charges and marketing fees.

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

* Establish your account with the Fund by submitting a completed New
Account Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company

Boston, MA

Dollar Amount of Wire

ABA Number 011000028

Attention: EDGEWIRE

Wire Order Number, Dealer Number or Group Number

Nominee/Institution Name

Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.

BY SYSTEMATIC INVESTMENT PROGRAM

Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $100.

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend. Under
limited circumstances, arrangements may be made with the Distributor for
same-day payment of redemption proceeds, without that day's dividend, for
redemption requests received before 2:00 p.m. (Eastern time).

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration;

* amount to be redeemed; and

* signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

SYSTEMATIC WITHDRAWAL PROGRAM

You may automatically redeem Shares in a minimum amount of $100 on a regular
basis. Complete the appropriate section of the New Account Form or an Account
Service Options Form or contact your investment professional or the Fund. Your
account value must meet the minimum initial investment amount at the time the
program is established. This program may reduce, and eventually deplete, your
account. Payments should not be considered yield or income.

CHECKWRITING

You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.

DEBIT CARD

You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

ACCOUNT ACTIVITY

You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.

The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions cause the account balance to fall below the minimum
initial investment amount. Before an account is closed, you will be notified and
allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. It is anticipated that
Fund distributions will be primarily dividends that are exempt from federal
income tax, although a portion of the Fund's dividends may not be exempt.
Dividends may be subject to state and local taxes. Capital gains and non-exempt
dividends are taxable whether paid in cash or reinvested in the Fund.
Redemptions are taxable sales. Please consult your tax adviser regarding your
federal, state and local tax liability.

Who Manages the Fund?

The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

ADVISORY FEES

The Adviser receives an annual investment advisory fee of 0.50% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.

YEAR 2000 READINESS

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.

While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.

Last Meeting of Shareholders

A Special Meeting of Fund shareholders was held on August 11, 1999. On April 30,
1999, the record date for shareholders voting at the meeting, there were
267,462,413 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:

AGENDA ITEM 1

Election of Trustees. 1

<TABLE>

WITHHELD
AUTHORITY
NAMES FOR TO VOTE
<S> <C> <C>
Thomas G. Bigley 144,925,189 2,531,991
Nicholas P. Constantakis 144,957,943 2,499,237
John F. Cunningham 144,957,943 2,499,237
Charles F. Mansfield, Jr. 144,957,943 2,499,237
John E. Murray, Jr., J.D., S.J.D. 144,957,943 2,499,237
John S. Walsh 144,957,943 2,499,237

</TABLE>

1 The following Trustees of the Trust continued their terms as Trustees of
Cash Trust Series II: John F. Donahue, John T. Conroy, Jr., William
J. Copeland, James E. Dowd, Esq., Lawrence D. Ellis, M.D., Edward L.
Flaherty, Jr., Esq., Peter E. Madden, Wesley W. Posvar, and Marjorie P.
Smuts..

AGENDA ITEM 2

Ratified the selection of Deloitte & Touche LLP as the independent auditors for
Cash Trust Series II.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
133,447,372 12,386,454 1,623,354

</TABLE>

AGENDA ITEM 3

Made changes to the Fund's fundamental investment policies:

(a) Amended the Fund's fundamental investment policy regarding diversification.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
105,496,263 39,102,639 2,858,278

</TABLE>

(b) Amended the Fund's fundamental investment policy regarding borrowing money
and issuing senior securities.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
104,470,123 40,182,643 2,804,414

</TABLE>

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
104,296,287 40,378,253 2,782,640

</TABLE>

(d) Amended the Fund's fundamental investment policy regarding investing in
commodities.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
98,867,769 45,789,395 2,800,016

</TABLE>

(e) Amended the Fund's fundamental investment policy regarding underwriting
securities.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
104,090,585 40,362,674 3,003,921

</TABLE>

(f) Amended the Fund's fundamental investment policy regarding lending assets.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
104,319,838 40,254,070 2,883,272

</TABLE>

(g) Amended the Fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
105,257,072 39,369,300 2,830,808

</TABLE>

(h) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding buying securities on margin.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
103,203,888 41,455,267 2,798,025

</TABLE>

(i) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding pledging assets.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
103,966,111 40,710,374 2,780,695

</TABLE>

AGENDA ITEM 4

Eliminated certain of the Fund's fundamental investment policies:

(a) Removed the Fund's fundamental investment policy on investing in restricted
securities.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
104,383,959 40,192,261 2,880,960

</TABLE>

(b) Removed the Fund's fundamental investment policy on selling securities
short.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
103,914,335 40,762,197 2,780,648

</TABLE>

AGENDA ITEM 5

Amended and restated the Declaration of Trust for Cash Trust Series II to permit
the Board of Trustees to liquidate the assets of Cash Trust Series II, its
series or classes, and distribute the proceeds of such assets to the holders of
shares representing such interest, without seeking shareholder approval.

<TABLE>

WITHHELD
AUTHORITY
FOR AGAINST TO VOTE
<S> <C> <C>
102,808,966 41,804,974 2,843,240

</TABLE>

Financial Information

FINANCIAL HIGHLIGHTS

The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.

This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's audited financial statements, is included in the Annual Report.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

YEAR ENDED MAY 31 1999 1998 1997 1996 1995
<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 0.03 0.03 0.03 0.03 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 2.76% 3.09% 2.96% 3.22% 3.02%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.88% 0.85% 0.95% 1.10% 1.02%
Net investment income 2 2.65% 2.99% 2.77% 2.86% 2.68%
Expenses (after waivers) 0.81% 0.81% 0.79% 0.79% 0.79%
Net investment income (after waivers) 2.72% 3.03% 2.93% 3.17% 2.91%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $257,445 $266,076 $253,106 $59,888 $67,611

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period, certain fees were voluntarily waived and reimbursed. If
such voluntary waivers had not occurred, the ratios would have been as
indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated July 31, 1999, which can be obtained free of charge.

[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS

Municipal Cash Series II

A Portfolio of Cash Trust Series II

SEPTEMBER 30, 1999

A Statement of Additional Information (SAI), dated September 30, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and Annual and
Semi-Annual Report to shareholders as they become available. The Annual Report
discusses market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. To obtain the SAI,
the Annual Report, the Semi-Annual Report and other information without charge,
and make inquiries, call your investment professional or the Fund at
1-800-341-7400.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. Call 1-202- 942-8090 for
information on the Public Reference Room's operations and copying fees.

[Graphic]
Federated
Municipal Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

Investment Company Act File No.811-6269

Cusip 147552103

0111205A (9/99)

[Graphic]

PROSPECTUS

Treasury Cash Series II

A Portfolio of Cash Trust Series II

A money market mutual fund seeking to provide current income consistent with
stability of principal and liquidity by investing primarily in a portfolio of
U.S. Treasury securities maturing in 397 or less.

SEPTEMBER 30, 1999

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 3

What are the Fund's Investment Strategies? 4

What are the Principal Securities in Which the

Fund Invests? 4

What are the Specific Risks of Investing in the Fund? 5

What Do Shares Cost? 5

How is the Fund Sold? 5

How to Purchase Shares 6

How to Redeem Shares 7

Account and Share Information 9

Who Manages the Fund? 10

Last Meeting of Shareholders 11

Financial Information 13

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is to provide current income
consistent with stability of principal and liquidity. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund invests primarily in a portfolio of U.S. Treasury securities maturing
in 397 days or less. These investments include repurchase agreements
collateralized fully by U.S. Treasury securities. The dollar-weighted average
maturity of the Fund's portfolio will be 90 days or less.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

RISK/RETURN BAR CHART AND TABLE

[Graphic]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.

The Fund's shares are not sold subject to a sales charge (load). The total
returns displayed above are based upon net asset value.

The Fund's total return for the six-month period from January 1, 1999 to June
30, 1999 was 2.00%.

Within the period shown in the Chart, the Fund's highest quarterly return was
1.31% (quarter ended June 30, 1995). Its lowest quarterly return was 0.58%
(quarter ended December 31, 1993).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Average Annual Total Returns for the
calendar periods ended December 31, 1998.

CALENDAR PERIOD FUND
1 Year 4.71%
5 Years 4.55%
Start of Performance 1 4.18%

1 The Fund's start of performance date was February 8, 1991.

The Fund's 7-Day Net Yield as of December 31, 1998 was 4.14%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield.

What are the Fund's Fees and Expenses?

TREASURY CASH SERIES II

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund.

<TABLE>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions)
(as a percentage of
offering price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (Before Waiver and Reduction) 1 Expenses That are
Deducted From Fund Assets (as a percentage of average net assets)
Management Fee 2 0.50%
Distribution (12b-1) Fee 3 0.20%
Shareholder Services Fee None
Other Expenses 0.18%
Total Annual Fund
Operating Expenses 0.88%
1 Although not contractually obligated to do so, the adviser waived certain
amounts and the distributor elected not to accrue a portion of its distribution
(12b-1) fee during the fiscal year ended May 31, 1999. These are shown below
along with the net expenses the Fund actually paid for the fiscal year ended
May
31, 1999.
Total Waivers and
Reductions of Fund
Expenses 0.05%
Total Actual Annual Fund
Operating Expenses (after
waiver and reduction) 0.83%
2 The adviser voluntarily waived a portion of the management fee during the fiscal
year ended May 31, 1999. The adviser can terminate this voluntary waiver at any
time. The management fee paid by the Fund (after the voluntary waiver) was 0.46%
for the year ended May 31, 1999.
3 The distributor voluntarily elected not to accrue a portion of its distribution
(12b-1) fee during the fiscal year ended May 31, 1999. The distributor can
terminate this voluntary reduction at any time. The distribution (12b-1) fee paid
by the Fund (after the voluntary reduction) was 0.19% for the year ended May 31,
1999.
</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your Shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Shares' operating expenses are BEFORE WAIVERS AND REDUCTIONS
as shown in the Table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

1 Year $ 90
3 Years $ 281
5 Years $ 488
10 Years $ 1,084

What are the Fund's Investment Strategies?

The Fund invests at least 65% of its total assets in a portfolio of U.S.
Treasury securities maturing in 397 days or less. These investments include
repurchase agreements collateralized fully by U.S. Treasury securities. The
dollar-weighted average maturity of the Fund's portfolio will be 90 days or
less.

The Fund's investment adviser (Adviser) targets a dollar-weighted average
portfolio maturity range based upon its interest rate outlook. The Adviser
formulates its interest rate outlook by analyzing a variety of factors, such as:

* current U.S. economic activity and the economic outlook;

* current short-term interest rates;

* the Federal Reserve Board's policies regarding short-term interest
rates; and

* the potential effects of foreign economic activity on U.S. short-term
interest rates.

The Adviser generally shortens the portfolio's dollar-weighted average maturity
when it expects interest rates to rise and extends the maturity when it expects
interest rates to fall. The Adviser selects securities used to shorten or extend
the portfolio's dollar-weighted average maturity by comparing the returns
currently offered by different investments to their historical and expected
returns.

What are the Principal Securities in Which the Fund Invests?

U.S. TREASURY SECURITIES

U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities pay interest, dividends or
distributions at a specified rate. The rate may be a fixed percentage of
the principal or adjusted periodically. In addition, the U.S. Treasury
must repay the principal amount of the security, normally within a
specified time.

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser. Repurchase agreements are subject
to credit risks.

What are the Specific Risks of Investing in the Fund?

INTEREST RATE RISKS

Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.

CREDIT RISKS

Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time) and as of the end of regular trading (normally 4:00
p.m. Eastern time) each day the NYSE is open.

The required minimum initial investment for Fund Shares is $25,000. The required
minimum subsequent investment amount is $500. The minimum initial and subsequent
investment amounts for retirement plans are $1,000 and $50, respectively.

How is the Fund Sold?

The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to customers of financial institutions such as banks,
fiduciaries, custodians of public funds, investment advisers, and
broker/dealers, or individuals, directly or through investment professionals.

RULE 12B-1 PLAN

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

* Establish your account with the Fund by submitting a completed New
Account Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE

Wire Order Number, Dealer Number or Group Number

Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

BY SYSTEMATIC INVESTMENT PROGRAM

RETIREMENT INVESTMENTS

You may purchase Shares as retirement investments (such as qualified plans and
IRAs or transfer or rollover of assets). Call your investment professional or
the Fund for information on retirement investments. We suggest that you discuss
retirement investments with your tax adviser. You may be subject to an annual
IRA account fee.

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund at

1-800-341-7400 once you have completed the appropriate authorization form
for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

BY MAIL

You may redeem Shares by mailing a written request to the Fund.

Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

Send requests by mail to:

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration; * amount
to be redeemed; and * signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

PAYMENT METHODS FOR REDEMPTIONS

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

REDEMPTIONS FROM RETIREMENT ACCOUNTS

In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.

SYSTEMATIC WITHDRAWAL PROGRAM

CHECKWRITING

You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.

DEBIT CARD

You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

Account and Share Information

ACCOUNT ACTIVITY

You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.

Who Manages the Fund?

ADVISORY FEES

YEAR 2000 READINESS

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other

date-related problems. The Year 2000 problem may cause systems to process
information incorrectly and could disrupt businesses, such as the Fund, that
rely on computers.

Last Meeting of Shareholders

A Special Meeting of Fund shareholders was held on August 11, 1999. On April 30,
1999, the record date for shareholders voting at the meeting, there were
236,573,370 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:

AGENDA ITEM 1

Elected Trustees: 1

WITHHELD
AUTHORITY
FOR TO VOTE
Thomas G. Bigley 175,325,761 3,439,840
Nicholas P. Constantakis 178,705,502 60,099
John F. Cunningham 178,705,502 60,099
Charles F. Mansfield, Jr. 178,705,502 60,099
John E. Murray, Jr., J.D., S.J.D. 178,705,502 60,099
John S. Walsh 178,705,502 60,099

1 The following Trustees continued their terms as Trustees of Cash Trust
Series II: John F. Donahue, John T. Conroy, Jr.,

William J. Copeland, James E. Dowd, Esq., Lawrence D. Ellis, M.D.,
Edward L. Flaherty, Jr., Esq., Peter E. Madden, Wesley W. Posvar and
Marjorie P. Smuts.

AGENDA ITEM 2

Ratified the selection of Deloitte & Touche LLP as the independent auditors for
Cash Trust Series II:

ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
178,480,521 23,071 262,009

AGENDA ITEM 3

Made changes to the Fund's fundamental investment policies:

(a) Amended the Fund's fundamental investment policy regarding borrowing money
and issuing senior securities.

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
153,986,508 24,130,486 648,607
</TABLE>

(b) Amended the Fund's fundamental investment policy regarding lending by the
Fund.

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
123,171,602 54,945,392 648,607
</TABLE>

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
119,791,859 58,325,135 648,607
</TABLE>

(d) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding pledging assets.

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
119,830,999 58,285,995 648,607
</TABLE>

AGENDA ITEM 4

Eliminated certain of the Fund's fundamental investment policies:

(a) Removed the Fund's fundamental investment policy on investing in restricted
securities.

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
157,002,499 21,062,617 700,485
</TABLE>

(b) Removed the Fund's fundamental investment policy on selling securities
short.

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
157,040,584 21,024,532 700,485
</TABLE>

AGENDA ITEM 5

<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
157,159,048 21,041,400 565,153
</TABLE>

Financial Information

FINANCIAL HIGHLIGHTS

This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's audited financial statements, is included in the Annual Report.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED MAY 31 1999 1998 1997 1996 1995
<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 0.04 0.05 0.05 0.05 0.04
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.04) (0.05) (0.05) (0.05) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.39% 4.88% 4.65% 4.97% 4.47%

RATIOS TO AVERAGE NET ASSETS:
Expenses 2 0.87% 0.85% 0.86% 0.87% 0.88%
Net investment income 2 4.24% 4.74% 4.54% 4.82% 4.40%
Expenses (after waivers) 0.83% 0.83% 0.85% 0.86% 0.88%
Net investment income (after waivers) 4.28% 4.76% 4.55% 4.83% 4.40%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $233,037 $226,667 $343,071 $402,378 $243,651
</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 During the period certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.

Further information about the Fund's performance is contained in the Fund's
Annual Report, dated May 31, 1999, which can be obtained free of charge.

[Graphic]

Federated
World-Class Investment Manager

PROSPECTUS

Treasury Cash Series II

A Portfolio of Cash Trust Series II

SEPTEMBER 30, 1999

A Statement of Additional Information (SAI), dated July 31, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and Annual and
Semi-Annual Report to shareholders as they become available. The Annual Report
discusses market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. To obtain the SAI,
the Annual Report, the Semi-Annual Report and other information without charge,
and make inquiries, call your investment professional or the Fund at
1-800-341-7400.

[Graphic]
Federated
Treasury Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

Investment Company Act File No. 811-6269

Cusip 147552301

0111203A (9/99)

[Graphic]

STATEMENT OF ADDITIONAL INFORMATION
Municipal Cash Series II

A Portfolio of Cash Trust Series II

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Municipal Cash Series II (Fund),
dated September 30, 1999. This SAI incorporates by reference the Fund's Annual
Report. Obtain the prospectus or the Annual Report without charge by calling
1-800-341-7400.

SEPTEMBER 30, 1999

[Graphic]
Federated
World-Class Investment Manager
Municipal Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

0111205B (9/99)

[Graphic]

CONTENTS

How is the Fund Organized? 1

Securities in Which the Fund Invests 1

How is the Fund Sold? 4

Subaccounting Services 5

Redemption in Kind 5

Massachusetts Partnership Law 5

Account and Share Information 5

Tax Information 5

Who Manages and Provides Services to the Fund? 6

How Does the Fund Measure Performance? 9

Who is Federated Investors, Inc.? 11

Financial Information 12

Investment Ratings 12

Addresses 14

How is the Fund Organized?

The Fund is a diversified portfolio of Cash Trust Series II (Trust). The Trust
is an open-end, management investment company that was established under the
laws of the Commonwealth of Massachusetts on November 14, 1990. The Trust may
offer separate series of shares representing interests in separate portfolios of
securities. The Fund's investment adviser is Federated Investment Management
Company (Adviser). The Adviser, formerly known as Federated Advisers, changed
its name effective March 31, 1999.

Securities in Which the Fund Invests

The Fund's principal securities are described in its prospectus. Additional
securities and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or may be adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.

The following describes the types of fixed income securities in which the Fund
invests.

TAX EXEMPT SECURITIES

Tax exempt securities are fixed income securities that pay interest that is not
subject to regular federal income taxes. Typically, states, counties, cities and
other political subdivisions and authorities issue tax exempt securities. The
market categorizes tax exempt securities by their source of repayment.

GENERAL OBLIGATION BONDS

General obligation bonds are supported by the issuer's power to exact property
or other taxes. The issuer must impose and collect taxes sufficient to pay
principal and interest on the bonds. However, the issuer's authority to impose
additional taxes may be limited by its charter or state law.

SPECIAL REVENUE BONDS

Special revenue bonds are payable solely from specific revenues received by the
issuer such as specific taxes, assessments, tolls, or fees. Bondholders may not
collect from the municipality's general taxes or revenues. For example, a
municipality may issue bonds to build a toll road, and pledge the tolls to repay
the bonds. Therefore, a shortfall in the tolls normally would result in a
default on the bonds.

PRIVATE ACTIVITY BONDS

Private activity bonds are special revenue bonds used to finance private
entities. For example, a municipality may issue bonds to finance a new factory
to improve its local economy. The municipality would lend the proceeds from its
bonds to the company using the factory, and the company would agree to make loan
payments sufficient to repay the bonds. The bonds would be payable solely from
the company's loan payments, not from any other revenues of the municipality.
Therefore, any default on the loan normally would result in a default on the
bonds.

The interest on many types of private activity bonds is subject to the federal
alternative minimum tax (AMT). The Fund may invest in bonds subject to AMT.

MUNICIPAL LEASES

Municipalities may enter into leases for equipment or facilities. In order to
comply with state public financing laws, these leases are typically subject to
annual appropriation. In other words, a municipality may end a lease, without
penalty, by not providing for the lease payments in its annual budget. After the
lease ends, the lessor can resell the equipment or facility but may lose money
on the sale.

The Fund may invest in securities supported by individual leases pools of
municipal leases.

ZERO COUPON SECURITIES

Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the interest rate and credit risks of a zero coupon security.

Credit Enhancement

Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.

SPECIAL TRANSACTIONS

DELAYED DELIVERY

Delayed delivery transaction, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records transactions when it
agrees buy the securities and reflects their value in determining the price of
its shares. Settlement may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

ASSET COVERAGE

In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting derivative transaction or terminating the special
transaction. This may cause the Fund to miss favorable trading opportunities or
to realize losses on special transactions.

TEMPORARY DEFENSIVE INVESTMENTS

The Fund may make temporary defensive investments in the following taxable
securities:

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States.

AGENCY SECURITIES

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities.

BANK INSTRUMENTS

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities.

COMMERCIAL PAPER

Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.

REPURCHASE AGREEMENTS

The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

INVESTMENT RATINGS

The securities in which the Fund invests must 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 ("S&P"), MIG-1 or MIG-2 by Moody's Investors
Service, Inc. ("Moodys"), or F-1+, F-1 or F-2 by Fitch IBCA, Inc. ("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 on the two highest
short-term rating categories; currently, such securities must be rated by two
NRSROs in one of their two highest rating categories.

INVESTMENT RISKS

There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

CREDIT RISKS

LEVERAGE RISKS

Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.

TAX RISKS

In order to be tax-exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Fund to shareholders to be taxable.

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

FUNDAMENTAL INVESTMENT OBJECTIVE AND POLICY

The Fund's investment objective is current income exempt from federal regular
income tax consistent with stability of principal. At least 80% of the Fund's
annual interest income will be exempt from federal regular income tax.

This investment objective and policy may not be changed by the Fund's Trustees
without shareholder approval.

INVESTMENT LIMITATIONS

DIVERSIFICATION

With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
it agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in the securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities or that issuer.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

INVESTING IN REAL ESTATE

The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.

INVESTING IN COMMODITIES

The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.

UNDERWRITING

The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.

LENDING CASH OR SECURITIES

The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.

CONCENTRATION OF INVESTMENTS

The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments will not be
deemed to constitute an industry.

THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD OF
TRUSTEES (BOARD) AND BY THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES," AS DEFINED BY THE INVESTMENT COMPANY ACT OF 1940. THE FOLLOWING
LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL.
SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS
BECOMES EFFECTIVE.

INVESTING IN ILLIQUID SECURITIES

The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.

PLEDGING ASSETS

The Fund will not mortgage, pledge, or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

BUYING ON MARGIN

The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

INVESTING IN RESTRICTED SECURITIES

The Fund may invest in securities subject to restrictions on resale under the
federal securities laws.

In applying the Fund's concentration limitation: (a) utility companies will be
divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying assets securing such
securities. In addition, for purposes of the concentration policy, bank
instruments will be limited to instruments of domestic banks. To conform to the
current view of the staff of the Securities and Exchange Commission (SEC) that
only domestic bank instruments may be excluded from industry concentration
limitations, the Fund will not exclude foreign bank instruments from industry
concentration limitations tests so long as the policy of the SEC remains in
effect. The Fund will consider concentration to be the investment of more than
25% of the value of the total assets in any one industry.

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

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
limitations.

REGULATORY COMPLIANCE

The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this 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. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (the Rule), which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments according to the Rule. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.

DETERMINING MARKET VALUE OF SECURITIES

The Board has 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.
Accordingly, 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 opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board 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. The 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 Board will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the two
values. The Board 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.

How is the Fund Sold?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN

As a reimbursement-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.

The Fund reimburses the Distributor only for those payments made to investment
professionals up to the maximum Rule 12b-1 Plan fee. The Distributor may seek
reimbursement in following years for any unreimbursed expenses permitted under
the Plan. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.

The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing-related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.

SUPPLEMENTAL PAYMENTS

Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.

Investment professionals receive such fees for providing distribution- related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

Subaccounting Services

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

Redemption in Kind

Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

Massachusetts Partnership Law

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust 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 itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

Account and Share Information

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 the Trust have equal voting rights, except that in matters
affecting only a particular Fund or class, only Shares of that Fund or class are
entitled to vote.

Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding Shares
of all series entitled to vote.

As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: Mark Epstein, Potomac,
MD, owned approximately 15,737,293 shares (5.90%).

Tax Information

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.

The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.

Who Manages and Provides Services to the Fund?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of two
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.

As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Shares.

NAME
BIRTH DATE AGGREGATE
TOTAL
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
COMPENSATION FROM
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST TRUST AND
FUND COMPLEX
<S> <C> <C>
<C>
JOHN F. DONAHUE*+ Chief Executive Officer $0 $0 for the
Trust and
Birth Date: July 28, 1924 and Director or Trustee of 54 other
investment
Federated Investors Tower the Federated Fund companies
in the
1001 Liberty Avenue Complex; Chairman and Fund
Complex
Pittsburgh, PA Director,
Federated
CHAIRMAN AND TRUSTEE Investors, Inc.;
Chairman
and Trustee,
Federated
Investment
Management
Company; Chairman
and
Director,
Federated
Investment Counseling
and
Federated
Global
Investment
Management
Corp.; Chairman,
Passport
Research, Ltd.

THOMAS G. BIGLEY Director or Trustee of the Federated Fund $665.94
$113,860.22 for the
Birth Date: February 3, 1934 Complex; Director, Member of Executive Trust and
56 other
15 Old Timber Trail Committee, Children's Hospital of Pittsburgh; investment
companies
Pittsburgh, PA Director, Robroy Industries, Inc. (coated steel in the
Fund Complex
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst & Young LLP;
Director, MED 3000 Group, Inc.
(physician
practice management); Director, Member
of
Executive Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated Fund $732.66
$125,264.48 for the
Birth Date: June 23, 1937 Complex; President, Investment Properties Trust and
54 other
Wood/Commercial Dept. Corporation; Senior Vice President, investment
companies
John R. Wood Associates, Inc.
Realtors John R. Wood and Associates, Inc., Realtors; in the
Fund Complex
3255 Tamiami Trail North Partner or Trustee in private real estate
ventures
Naples, FL in Southwest Florida; formerly: President,
TRUSTEE Naples Property Management, Inc.
and
Northgate Village Development Corporation.

NICHOLAS CONSTANTAKIS Director or Trustee of some of the Federated $665.94 $47,958.02
for the
Birth Date: September 3, 1939 Fund Complex; formerly: Partner, Andersen Trust and
29 other
175 Woodshire Drive Worldwide SC. investment
companies
Pittsburgh, PA in the
Fund Complex
TRUSTEE

JOHN F. CUNNINGHAM ++ Director or Trustee of some of the Federated $329.47 $0 for the
Trust and
Birth Date: March 5, 1943 Funds Complex; Chairman, President and Chief 47 other
investment
353 El Brillo Way Executive Officer, Cunningham & Co., Inc.; companies
in the
Palm Beach, FL Trustee Associate, Boston College; Director, Fund
Complex
TRUSTEE Iperia Corp. (communications/software)
EMC
Corporation; formerly: Director,
Redgate
Communications EMC Corporation
(computer
storage systems).
Previous Positions: Chairman of the Board
and
Chief Executive Officer, Computer Consoles,
Inc.; President and Chief Operating Officer,
Wang Laboratories; Director, First
National
Bank of Boston; Director, Apollo Computer, Inc.

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund $665.94
$113,860.22 for the
Birth Date: October 11, 1932 Complex; Professor of Medicine, University of Trust and
54 other
3471 Fifth Avenue Pittsburgh; Medical Director, University of investment
companies
Suite 1111 Pittsburgh Medical Center - Downtown; in the
Fund Complex
Pittsburgh, PA Hematologist, Oncologist, and Internist,
TRUSTEE University of Pittsburgh Medical Center;
Member, National Board of Trustees,
Leukemia
Society of America.

PETER E. MADDEN Director or Trustee of the Federated Fund $590.55
$113,860.22 for the
Birth Date: March 16, 1942 Complex; formerly: Representative, Trust and
54 other
One Royal Palm Way Commonwealth of Massachusetts General investment
companies
100 Royal Palm Way Court; President, State Street Bank and Trust in the
Fund Complex
Palm Beach, FL Company and State Street Corporation.
TRUSTEE Previous Positions: Director, VISA USA
and
VISA International; Chairman and Director,
Massachusetts Bankers Association; Director,
Depository Trust Corporation; Director,
The
Boston Stock Exchange.

<CAPTION>
NAME
BIRTH DATE AGGREGATE
TOTAL
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
COMPENSATION FROM
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST TRUST AND
FUND COMPLEX
<S> <C> <C>
<C>

CHARLES F. MANSFIELD, JR. ++ Director or Trustee of some $0 $0 for the
Trust and
Birth Date: April 10, 1945 of the Federated Fund 43 other
investment
80 South Road Complex; Management companies
in the
Westhampton Beach, NY Consultant. Fund
Complex
TRUSTEE Previous Positions:
Chief
Executive Officer,
PBTC
International Bank;
Partner, Arthur Young
&
company (now, Ernst &
Young
LLP), Chief
Financial
Officer of Retail
Banking
Sector, Chase
Manhattan
Bank; Senior
Vice
President, Marine
Midland
Bank; Vice President,
Citibank;
Assistant
Professor of Banking
and
Finance, Frank G.
Zarb
School of Business,
Hofstra University.

JOHN E. MURRAY, JR., J.D., S.J.D. Director or Trustee of the Federated Fund $698.94
$113,860.22 for the
Birth Date: December 20, 1932 Complex; President, Law Professor, Duquesne Trust and
54 other
President, Duquesne University University; Consulting Partner, Mollica & investment
companies
Pittsburgh, PA Murray; Director, Michael Baker Corp. in the
Fund Complex
TRUSTEE (engineering, construction, operations,
and
technical services).
Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law;
Dean
and Professor of Law, Villanova
University
School of Law.

MARJORIE P. SMUTS Director or Trustee of some of the Federated $665.94
$113,860.22 for the
Birth Date: June 21, 1935 Fund Complex; Public Relations/Marketing/ Trust and
54 other
4905 Bayard Street Conference Planning. investment
companies
Pittsburgh, PA Previous Positions: National Spokesperson, in the
Fund Complex
TRUSTEE Aluminum Company of America;
television
producer; business owner.

JOHN S. WALSH++ Director or Trustee of some of the Federated $0 $0 for the
Trust and
Birth Date: November 28, 1957 Fund Complex; President and Director, Heat 41 other
investment
2007 Sherwood Drive Wagon, Inc. (manufacturer of construction companies
in the
Valparaiso, IN temporary heaters); President and Director, Fund
Complex
TRUSTEE Manufacturers Products, Inc. (distributor
of
portable construction heaters); President,
Portable Heater Parts, a division
of
Manufacturers Products, Inc.; Director, Walsh
&
Kelly, Inc. (heavy highway contractor); formerly:
Vice President, Walsh & Kelly, Inc.

RICHARD B. FISHER President or Vice President of some of the $0 $0 for the
Trust and
Birth Date: May 17, 1923 Funds in the Federated Fund Complex; Director 6 other
investment
Federated Investors Tower or Trustee of some of the Funds in the companies
in the
1001 Liberty Avenue Federated Fund Complex; Executive Vice Fund
Complex
Pittsburgh, PA President, Federated Investors, Inc.;
Chairman
PRESIDENT and Director, Federated Securities Corp.

J. CHRISTOPHER DONAHUE+ President or Executive Vice President of the $0 $0 for the
Trust and
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of 16 other
investment
Federated Investors Tower some of the Funds in the Federated Fund companies
in the
1001 Liberty Avenue Complex; President, CEO and Director, Fund
Complex
Pittsburgh, PA Federated Investors, Inc.; President and Trustee,
EXECUTIVE VICE PRESIDENT Federated Investment Management Company;
AND TRUSTEE President and Trustee, Federated
Investment
Counseling, and President and
Director
Federated Global Investment
Management
Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder
Services
Company; Director, Federated
Services
Company.

EDWARD C. GONZALES Trustee or Director of some of the Funds in the $0 $0 for the
Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive 1 other
investment
Federated Investors Tower Vice President and Treasurer of some of the company in
the
1001 Liberty Avenue Funds in the Federated Fund Complex; Vice Fund
Complex
Pittsburgh, PA Chairman, Federated Investors, Inc.;
Vice
EXECUTIVE VICE PRESIDENT President, Federated Investment
Management
Company, Federated Investment Counseling,
Federated Global Investment
Management
Corp. and Passport Research, Ltd.;
Executive
Vice President and Director,
Federated
Securities Corp.; Trustee, Federated
Shareholder
Services Company.

JOHN W. MCGONIGLE Executive Vice President $0 $0 for the
Trust and
Birth Date: October 26, 1938 and Secretary of the 54 other
investment
Federated Investors Tower Federated Fund Complex; companies
in the
1001 Liberty Avenue Executive Vice President, Fund
Complex
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY Trustee,
Federated
Investment
Management
Company, Trustee,
Federated
Investment
Counseling and Director,
Federated
Global
Investment
Management
Corp.; Director,
Federated
Services Company;
Director,
Federated
Securities Corp.

<CAPTION>
NAME
BIRTH DATE AGGREGATE
TOTAL
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
COMPENSATION FROM
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST TRUST AND
FUND COMPLEX
<S> <C> <C>
<C>
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the
Trust and
Birth Date: June 17, 1954 Fund Complex; Vice 54 other
investment
Federated Investors Tower President - Funds companies
in the
1001 Liberty Avenue Financial Services Fund
Complex
Pittsburgh, PA Division,
Federated
TREASURER Investors, Inc.; formerly:
various
management
positions within
Funds
Financial
Services
Division of
Federated
Investors, Inc.

WILLIAM D. DAWSON, III Chief Investment Officer of this Fund and $0 $0 for the
Trust and
Birth Date: March 3, 1949 various other Funds in the Federated Fund 41 other
investment
Federated Investors Tower Complex; Executive Vice President, Federated companies
in the
1001 Liberty Avenue Investment Counseling, Federated Global Fund
Complex
Pittsburgh, PA Investment Management Corp.,
Federated
CHIEF INVESTMENT OFFICER Investment Management Company
and
Passport Research, Ltd.;
Registered
Representative, Federated Securities Corp.;
Portfolio Manager, Federated
Administrative
Services; Vice President, Federated Investors,
Inc.; formerly: Executive Vice President
and
Senior Vice President, Federated
Investment
Counseling Institutional Portfolio
Management
Services Division; Senior Vice President,
Federated Investment Management
Company
and Passport Research, Ltd.

DEBORAH A. CUNNINGHAM Deborah A. Cunningham is Vice President of $0 $0 for the
Trust and
Birth Date: September 15, 1959 the Trust. Ms. Cunningham joined Federated in 6 other
investment
Federated Investors Tower 1981 and has been a Senior Portfolio Manager companies
in the
1001 Liberty Avenue and a Senior Vice President of the Fund's Fund
Complex
Pittsburgh, PA Adviser since 1997. Ms. Cunningham served
as
VICE PRESIDENT a Portfolio Manager and a Vice President of
the
Adviser from 1993 until 1996. Ms.
Cunningham
is a Chartered Financial Analyst and
received
her M.S.B.A. in Finance from Robert
Morris
College.

MARY JO OCHSON Mary Jo Ochson has been the Fund's portfolio $0 $0 for the
Trust and
Birth Date: September 12, 1953 manager since August 1989. She is Vice 7 other
investment
Federated Investors Tower President of the Trust. Ms. Ochson joined companies
in the
1001 Liberty Avenue Federated in 1982 and has been a Senior Fund
Complex
Pittsburgh, PA Portfolio Manager and a Senior Vice
President
VICE PRESIDENT of the Fund's Adviser since 1996. From
1988
through 1995, Ms. Ochson served as a
Portfolio
Manager and a Vice President of the
Fund's
Adviser. Ms. Ochson is a Chartered
Financial
Analyst and received her M.B.A. in Finance
from
the University of Pittsburgh.

</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President and Trustee of the Trust.

++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees/Directors on January 1, 1999, and July 1, 1999, respectively. They did
not earn any fees for serving the Fund Complex since these fees are reported as
of the end of the last calendar year. They did not receive any fees as of the
fiscal year end of the Trust.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser shall not be liable to the Trust or any Fund shareholder 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.

OTHER RELATED SERVICES

Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.

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. 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. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.

Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:

<TABLE>

MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 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. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by
shareholders.

INDEPENDENT AUDITORS

The independent auditors for the Fund, Deloitte & Touche LLP, plans and performs
its audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatements.

FEES PAID BY THE FUND FOR SERVICES

<TABLE>

FOR THE YEAR ENDED MAY 31 1999 1998 1997
<S> <C> <C> <C>
Advisory Fee Earned $1,355,245 $1,373,797 $888,564
Advisory Fee Reduction 171,453 108,571 289,868
Administrative Fee 204,390 207,302 167,736
12B-1 FEE 542,149 - -

</TABLE>

How Does the Fund Measure Performance?

The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-year, five-year and start of performance periods
ended May 31, 1999.

Yield, Effective Yield and Tax-Equivalent Yield given for the 7-day period ended
May 31, 1999.

<TABLE>

7-DAY START OF PERFORMANCE
PERIOD 1 YEAR 5 YEARS ON FEBRUARY 13, 1991
<S> <C> <C> <C> <C>
Total Return - 2.76% 3.01% 2.95%
Yield 2.69% - - -
Effective Yield 2.72% - - -
Tax-Equivalent Yield 4.45% - - -

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD, EFFECTIVE YIELD AND TAX EQUIVALENT YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: 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 all dividends declared on the
original and any purchased Shares; 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 multiplying the base-period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.

TAX EQUIVALENCY TABLE

Set forth below is a sample of a tax-equivalency table that may be used in
advertising and sales literature. This table is for illustrative purposes only
and is not representative of past or future performance of the Fund. The
interest earned by the municipal securities owned by the Fund generally remains
free from federal regular income tax and is often free from state and local
taxes as well. However, some of the Fund's income may be subject to the federal
alternative minimum tax and state and/or local taxes.

TAX EQUIVALENCY TABLE

<TABLE>

TAXABLE YIELD EQUIVALENT
FOR 1999 MULTISTATE
MUNICIPAL FUND
FEDERAL INCOME TAX
BRACKET: 15.00% 28.00% 31.00% 36.00% 39.60%
<S> <C> <C> <C> <C> <C>
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150 Over 283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150 Over 283,150
TAX-EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.18% 1.39% 1.45% 1.56% 1.66%
1.50% 1.76% 2.08% 2.17% 2.34% 2.48%
2.00% 2.35% 2.78% 2.90% 3.13% 3.31%
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00% 3.53% 4.17% 4.35% 4.69% 4.97%
3.50% 4.12% 4.86% 5.07% 5.47% 5.79%
4.00% 4.71% 5.56% 5.80% 6.25% 6.62%
4.50% 5.29% 6.25% 6.52% 7.03% 7.45%
5.00% 5.88% 6.94% 7.25% 7.81% 8.28%
5.50% 6.47% 7.64% 7.97% 8.59% 9.11%
6.00% 7.06% 8.33% 8.70% 9.38% 9.93%
6.50% 7.65% 9.03% 9.42% 10.16% 10.76%
7.00% 8.24% 9.72% 10.14% 10.94% 11.59%
7.50% 8.82% 10.42% 10.87% 11.72% 12.42%
8.00% 9.41% 11.11% 11.59% 12.50% 13.25%

</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the tax equivalent yield.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit and
Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the 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:

LIPPER ANALYTICAL SERVICES, INC.

Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.

IBC/DONOGHUE'S MONEY FUND REPORT

IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

MONEY

Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

Who is Federated Investors, Inc.?

Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

EQUITY FUNDS

In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value- oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

CORPORATE BOND FUNDS

In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

GOVERNMENT FUNDS

In the government sector, as of December 31, 1998, Federated manages 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.

MONEY MARKET FUNDS

In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.

The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.

MUTUAL FUND MARKET

Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.

BANK MARKETING

Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.

Financial Information

The Financial Statements for the Fund for the fiscal year ended May 31, 1999 are
incorporated herein by reference to the Annual Report to Shareholders of
Municipal Cash Series II dated May 31, 1999.

Investment Ratings

STANDARD & POOR'S SHORT-TERM MUNICIPAL OBLIGATION RATINGS

A Standard & Poor's (S&P) note rating reflects the liquidity concerns and market
access risks unique to notes.

SP-1-Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.

SP-2-Satisfactory capacity to pay principal and interest.

VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS)
RATINGS

S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)

COMMERCIAL PAPER (CP) RATINGS

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.

A-1-This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.

A-2-Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues designated
A-1.

LONG-TERM DEBT RATINGS

AAA-Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA-Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the highest-rated issues only in small degree.

A-Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.

MOODY'S INVESTORS SERVICE, INC., SHORT-TERM MUNICIPAL OBLIGATION
RATINGS

Moody's Investor Service, Inc. (Moody's) short-term ratings are designated
Moody's Investment Grade (MIG or VMIG). (See below.) The purpose of the MIG or
VMIG ratings is to provide investors with a simple system by which the relative
investment qualities of short-term obligations may be evaluated.

MIG1-This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated broad
based access to the market for refinancing.

MIG2-This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS)
RATINGS

Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity. In this case, two ratings are usually assigned, (for example,
Aaa/VMIG-1); the first representing an evaluation of the degree of risk
associated with scheduled principal and interest payments, and the second
representing an evaluation of the degree of risk associated with the demand
feature. The VMIG rating can be assigned a 1 or 2 designation using the same
definitions described above for the MIG rating.

COMMERCIAL PAPER (CP) RATINGS

P-1-Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.

P-2-Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

LONG-TERM DEBT RATINGS

Aaa-Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa-Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A-Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

NR-Indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated in the defined rating categories.

FITCH INVESTORS SERVICE, L.P. SHORT-TERM DEBT RATING DEFINITIONS

F-1+-Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1-Very Strong Credit Quality. Issues assigned this rating reflect an assurance
for timely payment, only slightly less in degree than issues rated F-1+.

F-2-Good Credit Quality. Issues carrying this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as for
issues assigned F-1+ and F-1 ratings.

Addresses

MUNICIPAL CASH SERIES II

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company

P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT AUDITORS

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116

STATEMENT OF ADDITIONAL INFORMATION

Treasury Cash Series II

A Portfolio of Cash Trust Series II

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Treasury Cash Series II (Fund), dated
September 30, 1999. This SAI incorporates by reference the Fund's Annual Report.
Obtain the prospectus or the Annual Report without charge by calling
1-800-341-7400.

SEPTEMBER 30, 1999

[Graphic]
Federated
World-Class Investment Manager
Treasury Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor

0111203 (9/99)

[Graphic]

CONTENTS

How is the Fund Organized? 1

Securities in Which the Fund Invests 1

How is the Fund Sold? 3

Subaccounting Services 3

Redemption in Kind 3

Massachusetts Partnership Law 4

Account and Share Information 4

Tax Information 4

Who Manages and Provides Services to the Fund? 5

How Does the Fund Measure Performance? 8

Who is Federated Investors, Inc.? 9

Financial Information 11

Addresses 11

How is the Fund Organized?

The Fund is a diversified portfolio of Cash Trust Series II (Trust). The Trust
is an open-end, management investment company that was established under the
laws of the Commonwealth of Massachusetts on November 14, 1991. The Trust may
offer separate series of shares representing interests in separate portfolios of
securities. The Fund's investment adviser is Federated Investment Management
Company (Adviser). The Adviser, formerly known as Federated Advisers, changed
its name effective March 31, 1999.

Securities in Which the Fund Invests

The Fund's principal securities are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

The following describes the types of fixed income securities in which the Fund
invests.

U.S. TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

ZERO COUPON SECURITIES

There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created from interest bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due at
maturity, a process known as coupon stripping. In addition, some securities give
the issuer the option to deliver additional securities in place of cash interest
payments, thereby increasing the amount payable at maturity. These are referred
to as pay-in-kind or PIK securities.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS

Repurchase agreements are subject to credit risks.

REVERSE REPURCHASE AGREEMENTS

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

ASSET COVERAGE

In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting transaction or terminating the special transaction.
This may cause the Fund to miss favorable trading opportunities or to realize
losses on special transactions.

INVESTMENT RISKS

There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.

LEVERAGE RISKS

FUNDAMENTAL INVESTMENT OBJECTIVE

The investment objective is to provide current income consistent with stability
of principal and liquidity. The investment objective may not be changed by the
Fund's Trustees without shareholder approval.

INVESTMENT LIMITATIONS

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

LENDING CASH OR SECURITIES

INVESTING IN ILLIQUID SECURITIES

BUYING ON MARGIN

The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.

PLEDGING ASSETS

The Fund will not mortgage, pledge or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

INVESTING IN RESTRICTED SECURITIES

Fund may invest in securities subject to restriction on resale under federal
securities laws.

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

REGULATORY COMPLIANCE

DETERMINING MARKET VALUE OF SECURITIES

How is the Fund Sold?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN

SUPPLEMENTAL PAYMENTS

Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

Subaccounting Services

Redemption in Kind

Massachusetts Partnership Law

Account and Share Information

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 the Trust have
equal voting rights, except that in matters affecting only a particular Fund or
class, only Shares of that Fund or class are entitled to vote.

As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: Strafe & Co., Bank One
Investment Advisors Corp., Columbus, OH owned approximately 34,760,613 shares
(16.20%), The Bank of Guam, Agana, GU, owned approximately 22,741,510 shares
(10.60%), AmBank & Co., Hancock Bank of Louisiana, Baton Rouge, LA, owned
approximately 20,607,050 shares (9.60%), Humboldt Bank, Eureka, CA, owned
approximately 20,564,680 shares (9.58%), and Progressive State Bank and Trust
Monroe, LA owned approximately 13,028,171 shares (6.07%).

Tax Information

FEDERAL INCOME TAX

Who Manages and Provides Services to the Fund?

BOARD OF TRUSTEES

As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. A pound sign (#) denotes a Member
of the Board's Executive Committee, which handles the Board's responsibilities
between its meetings.

<TABLE>
<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>

JOHN F. DONAHUE*+# Chief Executive Officer $0 $0 for
the
Birth Date: July 28, 1924 and Director or Trustee of Trust
and
Federated Investors Tower the Federated Fund 54 other
investment companies
1001 Liberty Avenue Complex; Chairman and in the Fund
Complex
Pittsburgh, PA Director,
Federated
CHAIRMAN AND TRUSTEE Investors, Inc.;
Chairman
and Trustee,
Federated
Investment
Management
Company; Chairman
and
Director,
Federated
Investment Counseling
and
Federated
Global
Investment
Management
Corp.; Chairman,
Passport
Research, Ltd.

THOMAS G. BIGLEY Director or Trustee of the Federated Fund $621.57 $113,860.22
for the
Birth Date: February 3, 1934 Complex; Director, Member of Executive Trust
and
15 Old Timber Trail Committee, Children's Hospital of Pittsburgh; 54 other
investment companies
Pittsburgh, PA Director, Robroy Industries, Inc. (coated steel in the Fund
Complex
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst & Young LLP;
Director, MED 3000 Group, Inc.
(physician
practice management); Director, Member
of
Executive Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated Fund $683.83 $125,264.48
for the
Birth Date: June 23, 1937 Complex; President, Investment Properties Trust
and
Wood/Commercial Dept. Corporation; Senior Vice President, 54 other
investment companies
John R. Wood Associates, John R. Wood and Associates, Inc., Realtors; in the Fund
Complex
Inc. Realtors Partner or Trustee in private real estate
ventures
3255 Tamiami Trail North in Southwest Florida; formerly: President,
Naples, FL Naples Property Management, Inc.
and
TRUSTEE Northgate Village Development Corporation.

NICHOLAS CONSTANTAKIS Director or Trustee of some of the Federated $621.57 $47,958.02
for the
Birth Date: September 3, 1939 Fund Complex; formerly: Partner, Andersen Trust
and
175 Woodshire Drive Worldwide SC. 29 other
investment companies
Pittsburgh, PA in the Fund
Complex
TRUSTEE

JOHN F. CUNNINGHAM++ Director or Trustee of some of the Federated $309.47 $0 for
the
Birth Date: March 5, 1943 Funds Complex; Chairman, President and Chief Trust
and
353 El Brillo Way Executive Officer, Cunningham & Co., Inc. 47 other
investment companies
Palm Beach, FL (strategic business consulting); Trustee in the Fund
Complex
TRUSTEE Associate, Boston College; Director, Iperia Corp.
(communications/ software); formerly: Director,
Redgate Communications and
EMC
Corporation (computer storage systems).
Previous Positions: Chairman of the Board
and
Chief Executive Officer, Computer Consoles,
Inc.; President and Chief Operating Officer,
Wang Laboratories; Director, First
National
Bank of Boston; Director, Apollo Computer, Inc.

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund $621.57 $113,860.22
for the
Birth Date: October 11, 1932 Complex; Professor of Medicine, University of Trust
and
3471 Fifth Avenue Pittsburgh; Medical Director, University of 54 other
investment companies
Suite 1111 Pittsburgh Medical Center - Downtown; in the Fund
Complex
Pittsburgh, PA Hematologist, Oncologist, and Internist,
TRUSTEE University of Pittsburgh Medical Center;
Member, National Board of Trustees,
Leukemia
Society of America.

<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>

PETER E. MADDEN Director or Trustee of the $551.64 $113,860.22
for the
Birth Date: March 16, 1942 Federated Fund Complex; Trust
and
One Royal Palm Way formerly: Representative, 54 other
investment companies
100 Royal Palm Way Commonwealth of in the Fund
Complex
Palm Beach, FL Massachusetts
General
TRUSTEE Court; President,
State
Street Bank and
Trust
Company and
State
Street Corporation.
Previous Positions:
Director, VISA USA and
VISA
International;
Chairman
and Director,
Massachusetts
Bankers
Association; Director,
Depository
Trust
Corporation; Director,
The
Boston Stock Exchange.

CHARLES F. MANSFIELD, JR.++ Director or Trustee of some of the Federated $0 $0 for
the
Birth Date: April 10, 1945 Fund Complex; Management Consultant. Trust
and
80 South Road Previous Positions: Chief Executive Officer, 43 other
investment companies
Westhampton Beach, NY PBTC International Bank; Partner, Arthur Young in the Fund
Complex
TRUSTEE & Company (now Ernst & Young);
Chief
Financial Officer of Retail Banking Sector,
Chase Manhattan Bank; Senior Vice President,
Marine Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business,
Hofstra
University.

JOHN E. MURRAY, JR., Director or Trustee of the Federated Fund $652.58 $113,860.22
for the
J.D., S.J.D.# Complex; President, Law Professor, Duquesne Trust
and
Birth Date: December 20, 1932 University; Consulting Partner, Mollica & 54 other
investment companies
President, Duquesne University Murray; Director, Michael Baker Corp. in the Fund
Complex
Pittsburgh, PA (engineering, construction, operations
and
TRUSTEE technical services).
Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law;
Dean
and Professor of Law, Villanova
University
School of Law.

MARJORIE P. SMUTS Director or Trustee of some of the Federated $621.57 $113,860.22
for the
Birth Date: June 21, 1935 Fund Complex; Public Relations/Marketing/ Trust
and
4905 Bayard Street Conference Planning. 54 other
investment companies
Pittsburgh, PA Previous Positions: National Spokesperson, in the Fund
Complex
TRUSTEE Aluminum Company of America;
television
producer; business owner.

JOHN S. WALSH++ Director or Trustee of some of the Federated $0 $0 for
the
Birth Date: November 28, 1957 Fund Complex; President and Director, Heat Trust
and
2007 Sherwood Drive Wagon, Inc. (manufacturer of construction 41 other
investment companies
Valparaiso, IN temporary heaters); President and Director, in the Fund
Complex
TRUSTEE Manufacturers Products, Inc. (distributor
of
portable construction heaters); President,
Portable Heater Parts, a division
of
Manufacturers Products, Inc.; Director, Walsh
&
Kelly, Inc. (heavy highway contractors);
formerly: Vice President, Walsh & Kelly, Inc.

RICHARD B. FISHER President or Vice President of some of the $0 $0 for
the
Birth Date: May 17, 1923 Funds in the Federated Fund Complex; Director Trust
and
Federated Investors Tower or Trustee of some of the Funds in the 6 other
investment companies
1001 Liberty Avenue Federated Fund Complex; Executive Vice in the Fund
Complex
Pittsburgh, PA President, Federated Investors, Inc.;
Chairman
PRESIDENT and Director, Federated Securities Corp.

J. CHRISTOPHER DONAHUE+ President or Executive Vice President of the $0 $0 for
the
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of Trust
and
Federated Investors Tower some of the Funds in the Federated Fund 16 other
investment companies
1001 Liberty Avenue Complex; President, CEO and Director, in the Fund
Complex
Pittsburgh, PA Federated Investors, Inc.; President and Trustee,
EXECUTIVE VICE PRESIDENT Federated Investment Management Company;
AND TRUSTEE President and Trustee, Federated
Investment
Counseling and President and Director,
Federated Global Investment
Management
Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder
Services
Company; Director, Federated
Services
Company.

<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST FUND
COMPLEX
<S> <C> <C>
<C>

EDWARD C. GONZALES Trustee or Director of some $0 $0 for
the
Birth Date: October 22, 1930 of the Funds in the Trust
and
Federated Investors Tower Federated Fund Complex; 1 other
investment company
1001 Liberty Avenue President, Executive Vice in the Fund
Complex
Pittsburgh, PA President and Treasurer
of
EXECUTIVE VICE PRESIDENT some of the Funds in
the
Federated Fund Complex;
Vice Chairman,
Federated
Investors, Inc.;
Vice
President,
Federated
Investment
Management
Company,
Federated
Investment Counseling,
Federated
Global
Investment
Management
Corp. and
Passport
Research, Ltd.;
Executive
Vice President
and
Director,
Federated
Securities Corp.; Trustee,
Federated
Shareholder
Services Company.

JOHN W. MCGONIGLE Executive Vice President and Secretary of the $0 $0 for
the
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice Trust
and
Federated Investors Tower President, Secretary and Director, Federated 54 other
investment companies
1001 Liberty Avenue Investors, Inc.; Trustee, Federated Investment in the Fund
Complex
Pittsburgh, PA Management Company; Trustee,
Federated
EXECUTIVE VICE PRESIDENT Investment Counseling and Director,
Federated
AND SECRETARY Global Investment Management Corp.; Director,
Federated Services Company; Director,
Federated Securities Corp.

RICHARD J. THOMAS Treasurer of the Federated Fund Complex; Vice $0 $0 for
the
Birth Date: June 17, 1954 President - Funds Financial Services Division, Trust
and
Federated Investors Tower Federated Investors, Inc.; formerly: various 54 other
investment companies
1001 Liberty Avenue management positions within Funds Financial in the Fund
Complex
Pittsburgh, PA Services Division of Federated Investors, Inc.
TREASURER

WILLIAM D. DAWSON, III Chief Investment Officer of this Fund and $0 $0 for
the
Birth Date: March 3, 1949 various other Funds in the Federated Fund Trust
and
Federated Investors Tower Complex; Executive Vice President, Federated 41 other
investment companies
1001 Liberty Avenue Investment Counseling, Federated Global in the Fund
Complex
Pittsburgh, PA Investment Management Corp.,
Federated
CHIEF INVESTMENT OFFICER Investment Management Company
and
Passport Research, Ltd.;
Registered
Representative, Federated Securities Corp.;
Portfolio Manager, Federated
Administrative
Services; Vice President, Federated Investors,
Inc.; formerly: Executive Vice President
and
Senior Vice President, Federated
Investment
Counseling Institutional Portfolio
Management
Services Division; Senior Vice President,
Federated Investment Management
Company
and Passport Research, Ltd.

DEBORAH A. CUNNINGHAM Deborah A. Cunningham is Vice President of $0 $0 for
the
Birth Date: September 15, 1959 the Trust. Ms. Cunningham joined Federated in Trust
and
Federated Investors Tower 1981 and has been a Senior Portfolio Manager 6 other
investment companies
1001 Liberty Avenue and a Senior Vice President of the Fund's in the Fund
Complex
Pittsburgh, PA Adviser since 1997. Ms. Cunningham served
as
VICE PRESIDENT a Portfolio Manager and a Vice President of
the
Adviser from 1993 until 1996. Ms.
Cunningham
is a Chartered Financial Analyst and
received
her M.S.B.A. in Finance from
Robert
Morris College.

MARY JO OCHSON Mary Jo Ochson is Vice President of the Trust. $0 $0 for
the
Birth Date: September 12, 1953 Ms. Ochson joined Federated in 1982 and has Trust
and
Federated Investors Tower been a Senior Portfolio Manager and a Senior 7 other
investment companies
1001 Liberty Avenue Vice President of the Fund's Adviser since 1996. in the Fund
Complex
Pittsburgh, PA From 1988 through 1995, Ms. Ochson served
as
VICE PRESIDENT a Portfolio Manager and a Vice President of
the
Fund's Adviser. Ms. Ochson is a
Chartered
Financial Analyst and received her M.B.A.
in
Finance from the University of Pittsburgh.

</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue Executive Vice
President and Trustee of the Trust.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

OTHER RELATED SERVICES

BROKERAGE TRANSACTIONS

ADMINISTRATOR

MAXIMUM AVERAGE AGGREGATE DAILY ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED
FUNDS 0.150 of 1% on the first $250 million 0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million 0.075 of 1% on assets in excess of $750
million

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT AUDITORS

The independent auditor for the Fund, Deloitte & Touche LLP, plans and performs
its audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.

FEES PAID BY THE FUND FOR SERVICES

FOR THE YEAR ENDED
MAY 31 1999 1998 1997
Advisory Fee Earned $1,031,559 $1,317,096 $1,774,153
Advisory Fee Reduction 77,115 49,754 0
Administrative Fee 155,559 198,783 268,071
12B-1 FEE 398,182 - -

How Does the Fund Measure Performance?

The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-year, five-year and Start of Performance periods
ended May 31, 1999.

Yield and Effective Yield given for the 7-day period ended May 31, 1999.

START OF PERFORMANCE
7-DAY PERIOD 1 YEAR 5 YEARS ON FEBRUARY 8, 1991

Total Return - 4.71 4.55% 4.18%
Yield 4.14% - - -
Effective Yield 4.22% - - -

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

YIELD AND EFFECTIVE YIELD

The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: 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 all dividends declared on the
original and any purchased Shares; 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 multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized base
period return by: adding one to the base-period return, raising the sum to the
365/7th power; and subtracting one from the result.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

* LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.

* IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

* MONEY, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.

Who is Federated Investors, Inc.?

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

EQUITY FUNDS

CORPORATE BOND FUNDS

GOVERNMENT FUNDS

In the government sector, as of December 31, 1998, Federated managed 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.

MONEY MARKET FUNDS

MUTUAL FUND MARKET

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

Federated meets the needs of approximately 900 institutional

clients nationwide by managing and servicing separate accounts and mutual funds
for a variety of purposes, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.

BANK MARKETING

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Financial Information

The Financial Statements for the Fund for the fiscal year ended May 31, 1999 are
incorporated herein by reference to the Annual Report to Shareholders of
Treasury Cash Series II dated May 31, 1999.

Addresses

TREASURY CASH SERIES II

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT AUDITORS

Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116

PART C. OTHER INFORMATION.

Item 23. Exhibits:

(a) (i) Conformed Copy of Declaration of Trust of the Registrant; (5)
(ii) Conformed Copy of Amendment No. 1 to Declaration of Trust of
the Registrant; (5)
(iii) Conformed Copy of Amendment No. 2 to Declaration of Trust of
the Registrant;
(5)
(b) (i) Copy of the Amended By-Laws of the Registrant; (1)
(ii) Copy of Amendment No. 2 to the By-Laws of the Registrant;(6)
(ii) Copy of Amendment No. 3 to the By-Laws of the Registrant; (6)
(ii) Copy of Amendment No. 4 to the By-Laws of the Registrant; (6)
(c) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant; (1) (d)
Conformed Copy of Investment Advisory Contract of the
Registrant; (5) (e) (i) Conformed Copy of
Distributor's Contract of the Registrant; (5)
(ii) Conformed Copy of Specimen Mutual Funds Sales and Service
Agreement; (5)
(iii) Conformed Copy of Specimen Mutual Funds Service Agreement; (5)
(iv) Conformed Copy of Specimen Plan Trustee/Mutual Funds Service
Agreement; (5)
(f) Not applicable;
(g) (i) Conformed copy of Custodian Agreement of the Registrant; (5)
(ii) Conformed copy of Custodian Fee Schedule;(6)
(h) (i) Conformed copy of Amended and Restated Agreement for
Fund Accounting
Services, ................Administrative Services, Transfer Agency
Services and Custody Services Procurement of the Registrant;(6)
(ii) Conformed copy of Amended and Restated Shareholder Services
Agreement;(6)
(iii) The responses described in Item
23(e)(ii)-(iv)are hereby incorporated by reference.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed January 4, 1991. (File Nos. 33-38550 and
811-6269)

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed July 24, 1995. (File Nos. 33-38550 and
811-6269)

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed July 21, 1998. (File Nos. 33-38550 and
811-6269)

<PAGE>

(i) Conformed Copy of Opinion and Consent of
Counsel as to legality of shares being
registered; (5)
(j) Conformed copy of Consent of the Independent Auditor; +
(k) Not applicable;
(l) Conformed Copy of Initial Capital
Understanding; (5)
(m) (i) Conformed Copy of Distribution Plan of
the Registrant; (1) (ii) The responses
described in Item 23(e)(ii)-(iv) are hereby
incorporated by reference.
(n) Not Applicable
(o) (i) Conformed Copy of Power of Attorney of the
Registrant; (6)
(ii) Conformed copy of Power of Attorney of
Chief Investment Officer of the
Registrant; (7)
(iii) Conformed copy of Power of Attorney of
Treasurer of the Registrant; (7)
(iv) Conformed copy of Power of Attorney of Trustee of
the Registrant; (7)

Item 24. Persons Controlled by or Under Common Control with the Fund:

None

Item 25. Indemnification: (2)

- ----------------------
+ Exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed January 4, 1991. (File Nos. 33-38550 and
811-6269)

2. Response is incorporated by reference to Registrant's Registration
Statement on Form N-1A filed January 24, 1991. (File Nos. 33-38550 and
811-6269)

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed July 24, 1995. (File Nos. 33-38550 and
811-6269)

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed July 21, 1998. (File Nos. 33-38550 and
811-6269)

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on May 26, 1999 (File Nos. 33-38550 and
811-6269)

<PAGE>

Item 26. Business and Other Connections of Investment Adviser:

For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund?" 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 "Who Manages and Provides
Services to the Fund?" 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:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
James E. Grefenstette
Marc Halperin
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
George B. Wright

<PAGE>

Assistant Vice Presidents: Arminda Aviles
Nancy J. Belz
Lee R. Cunningham, II
James H. Davis, II
Jacqueline A. Drastal
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Farwell
Eamonn G. Folan
John T. Gentry
John W. Harris
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Christopher Matyszewski
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Neville
Ihab Salib
Roberto Sanchez-Dahl, Sr.
James W. Schaub
John Sheehy
John Sidawi
Matthew K. Stapen
Diane Tolby
Timothy G. Trebilcock
Steven J. Wagner
Lori A. Wolff

Secretary: G. Andrew Bonnewell

Treasurer: Thomas R. Donahue

Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross

Assistant Treasurer: Dennis McAuley, III

The business address of each of the Officers of the investment
adviser is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the
investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.

Item 27. Principal Underwriters:

(a)......Federated Securities Corp. the Distributor for shares of the Fund,
acts as principal underwriter for the following .................open-end
investment companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; ; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Managed Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
SouthTrust Funds; Tax-Free Instruments Trust; The Planters Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; World
Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
DG Investor Series; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; Trust for Financial Institutions;

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

<PAGE>

(b)

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

Richard B. Fisher Chairman, Chief Executive President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Arthur L. Cherry Director
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales
Federated Investors Tower and Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ronald M. Petnuch Senior Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Amy Michalisyn Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis McAuley Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>

Item 28. Location of Accounts and Records:

All accounts and records required to be maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1
through 31a-3 promulgated thereunder are maintained at one of
the following locations:

Registrant...............................Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(Notice should be sent to the
Agent for Service at the above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder Services Company P.O. Box 8600
("Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and Portfolio
Recordkeeper")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Federated Investment Federated Investors Tower
Management Company 1001 Liberty Avenue
("Adviser") Pittsburgh, PA 15222-3779

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600

Item 29. Management Services: Not applicable.

Item 30. 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.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, CASH TRUST SERIES II, 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 24th day of September, 1999.

CASH TRUST SERIES II

BY: /s/ Leslie K. Ross
Leslie K. Ross, Assistant Secretary
Attorney in Fact for John F. Donahue
September 24, 1999

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/ Leslie K. Ross
Leslie K. Ross Attorney In Fact September 24, 1999
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

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

Richard B. Fischer* President

William D. Dawson, III* Chief Investment Officer

J. Christopher Donahue* Executive Vice President
and Trustee

Richard J. Thomas* Treasurer (Principal Financial
and Accounting Officer)

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

John F. Cunningham* Trustee

J. Christopher Donahue* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

John E. Murray, Jr., J.D., S.J.D.* Trustee

Marjorie P. Smuts* Trustee

* By Power of Attorney

</TABLE>

INDEPENDENT AUDITORS' CONSENT

To the board of Trustees of CASH TRUST SERIES II:

We consent to the incorporation by reference in this Post-Effective
Amendment No. 13 to Registration Statement (No. 33-38550) of Cash Trust Series
II of our reports dated July 20, 1999, appearing in the Annual Report of
Municipal Cash Series II and Treasury Cash Series II for the year ended May 31,
1999, and to the reference to us under the headings "Financial Highlights" in
the Prospectuses, which are part of such Registration Statement.

DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
September 24, 1999