GOVERNMENT SEC INC FD MON PYMT U S TREAS SER 21 D A F, 497, 1994-11-02

GOVERNMENT SEC INC FD MON PYMT U S TREAS SER 21 D A F
497, 1994-11-02

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<PAGE>
Defined
Asset FundsSM

Government
Securities
Income Fund

- --------------------
MONTHLY PAYMENT
U.S. TREASURY SERIES-21
(LADDERED MATURITIES)
A UNIT INVESTMENT TRUST

6.99%
ESTIMATED CURRENT RETURN
AS OF OCTOBER 31, 1994

7.39%
ESTIMATED LONG TERM RETURN
AS OF OCTOBER 31, 1994

/ /U.S. GOVERNMENT
SECURITIES

/ /MONTHLY INCOME

/ /AAA RATED

U.S. TAX EXEMPT FOR FOREIGN
INVESTORS WHEN CERTAIN
CONDITIONS ARE MET

Merrill Lynch,
Pierce, Fenner & Smith Inc.
Unit Investment Trusts
P.O. Box 9051
Princeton, NJ 08543-9051
(609) 282-8500

PORTFOLIO OF GOVERNMENT
SECURITIES INCOME FUND, MONTHLY
PAYMENT U.S. TREASURY SERIES-21 (Laddered Maturities)
DEFINED ASSET FUNDS
ON THE INITIAL DATE OF DEPOSIT,
November 1, 1994

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Yield to
Maturity on
Cost of Initial Date
Portfolio No. and Title of Face Securities of
Securities Contracted for Amount Coupon Maturity to Fund(1) Deposit
----------- ------- --------- -------------- ------------
1. United States Treasury Notes $ 100,000 6.375 % 1/15/00 $ 95,355.00 7.464 %
2. United States Treasury Notes 100,000 7.500 11/15/01 99,391.00 7.612
3. United States Treasury Notes 100,000 7.500 5/15/02 99,242.00 7.633
4. United States Treasury Notes 100,000 6.250 2/15/03 91,183.00 7.706
5. United States Treasury Notes 100,000 7.250 8/15/04 96,438.00 7.774
----------- --------------
$ 500,000 $ 481,609.00
----------- --------------
----------- --------------
</TABLE>

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(1) Evaluation of Securities made on the basis of current offer side evaluation
as determined by the Evaluator. The offer side evaluation is greater than
the current bid side evaluation of the Securities which is the basis on
which Redemption Price per Unit is determined. The aggregate value based on
the bid side evaluation on the Initial Date of Deposit was $481,302.00,
which is $307.00 (approximately .06% of the aggregate face amount) lower
than the aggregate Cost of Securities to Fund based on the offer side
evaluation. Price of Securities was computed on the basis of the offer side
evaluation at the Evaluation Time on the business day prior to the Initial
Date of Deposit.

------------------------

All Securities are represented by contracts to purchase these Securities. The
contracts to purchase Securities were acquired on October 31, 1994.

<PAGE>
Defined Government Securities Income Fund
Our defined portfolios of U.S. Treasury securities offer
investors a simple and convenient way to participate in
the U.S. Treasury market and obtain monthly income while
earning an attractive return.
The Credit Safety of U.S. Treasury Securities
The U.S. Government is obligated to the holders of these
securities, such as the Fund, to pay every penny of
interest and principal due to them. The Fund itself is
not backed by the full faith and credit of the
Government, only the securities it holds. The value of
the units will fluctuate with changes in market
conditions.
Investment Flexibility
By utilizing an investment strategy called laddering, the
Fund seeks to provide protection against changes in
interest rates.
Each year beginning in 2000, approximately 20% of
principal is returned as securities mature. This way, a
portion of your investment will continue to earn higher
(levels of income if interest rates decline; a portion of
your investment will be available each year to be
reinvested at higher rates if interest rates rise.
Monthly Income Distributions
Although the bonds themselves pay semiannually, the Fund
will distribute income monthly. Principal from sales,
redemptions and maturities of bonds is distributed as it
is received. Interest payments, of course, decrease as
principal is returned.
AAA-Rated Investment Quality
Based on the creditworthiness of the U.S. treasury
securities in the portfolio, Standard & Poor's has rated
units of the Fund AAA, its highest rating. Government
backing relates to the Securities in the Fund and not the
Fund's Units.
A Liquid Investment
Although not legally required to do so, the Sponsors have
maintained a secondary market for Defined Asset Funds for
over 20 years. You can cash in your units at any time.
Your price is based on the market value of the Fund's
securities at that time as determined by an independent
evaluator.
State and Local Tax Exempt
Income from the Fund is exempt from state and local
personal income taxes in all states just as though you
owned the Treasury Securities directly. Depending on
where you live, these exemptions could be very important
and could increase the after-tax return you receive.

- -----------------------------------------
A free prospectus containing more complete information, including charges
and expenses, regarding this Trust is available from your financial
professional. Please read the prospectus carefully before you invest.

INVESTMENT SUMMARY AS OF OCTOBER 31, 1994

<TABLE>
<S> <C>
ESTIMATED CURRENT RETURN( a )
(based on Public Offering Price) 6.99%
ESTIMATED LONG TERM RETURN( a )
(based on Public Offering Price) 7.39%
PUBLIC OFFERING PRICE PER
1,000 UNITS (including 2.00% sales
charge) $ 982.88( b )
FACE AMOUNT OF SECURITIES-- $ 500,000
INITIAL NUMBER OF UNITS( c )-- 500,000
SPONSORS' REPURCHASE PRICE AND
REDEMPTION PRICE PER 1,000 UNITS( d )
(based on bid side evaluation) $ 962.60( b )
DAILY RATE AT WHICH ESTIMATED NET
INTEREST ACCRUES PER 1,000 UNITS....... .0190%
MONTHLY INCOME DISTRIBUTIONS PER 1,000 UNITS
First distribution to be paid on
February 25, 1995 to Holders of
record on February 10, 1995...... $ 5.22
Calculation of second and subsequent
distributions, to be paid on the
25th day of each month:
Estimated net annual interest
rate per 1,000 Units times
$1,000................................. $ 68.66
Divided by 12....................... $ 5.72
CAPITAL ACCOUNT DISTRIBUTIONS
Distributions from the Capital Account will
be made on or about the second business
day following the maturity of each
Security to Holders of record on the
business day immediately preceding the
date of the distribution.
</TABLE>

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(a) Estimated Current Return represents annual interest income after
estimated annual expenses divided by the maximum public offering price including
a 2.00% maximum sales charge. Estimated Long Term Return is the net annual
percentage return based on the yield on each underlying Security listed under
Portfolio weighted to reflect market value and time to maturity. Estimated Long
Term Return is adjusted for estimated expenses and the maximum offering price
but not for delays in the Fund's distribution of income. Estimated Current
Return shows current annual cash return to investors while Estimated Long Term
Return shows the return on Units held to maturity, reflecting maturities,
discounts and premiums on underlying Securities. Each figure will vary with
purchase price and changes in Fund income after expenses.
(b) Plus accrued interest.
(c) The Sponsors may create additional Units during the offering period
of the Fund.
(d) During the initial offering period, the Sponsors intend to offer to
purchase Units at prices based on the offer side evaluation of the underlying
Securities. Thereafter, the Sponsors intend to maintain such a market based on
the bid side value of the underlying Securities, which will be equal to the
Redemption Price.

THE EFFECT OF VOLUME DISCOUNTS

For larger purchases the sales charge has been reduced. This increases your
effective return on a Unit.

To give you an idea of these volume purchase discounts please examine the
chart below. This example is based on the public offering price as of the
business day prior to the date of the prospectus.

INITIAL OFFERING PERIOD

<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF THE ESTIMATED ESTIMATED
OFFER SIDE CURRENT LONG TERM
NUMBER OF UNITS PUBLIC OFFERING PRICE RETURN RETURN
<S> <C> <C> <C>
- -------------------- --------------------- ------------------------ ---------
LESS THAN 500,000 2.00% 6.99% 7.39%

SECONDARY MARKET

<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF THE ESTIMATED ESTIMATED
BID SIDE CURRENT LONG TERM
NUMBER OF UNITS PUBLIC OFFERING PRICE RETURN RETURN
<S> <C> <C> <C>
- -------------------- --------------------- ------------------------ ---------
LESS THAN 500,000 2.25% 6.97% 7.39%

14996-11/94