CORPORATE INCOME FUND MON PYMT SER 401 DEFINED ASSET FDS, 497, 1997-04-10

CORPORATE INCOME FUND MON PYMT SER 401 DEFINED ASSET FDS
497, 1997-04-10

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<PAGE>
Defined Asset FundsSM

<S> <C>
CORPORATE 7.27% ESTIMATED CURRENT RETURN shows the estimated annual cash to be
INCOME FUND received from interest-bearing bonds in the Portfolio (net of estimated
MONTHLY PAYMENT SERIES--401 annual expenses) divided by the Public Offering Price (including the
(A UNIT INVESTMENT maximum sales charge).
TRUST)
7.50% ESTIMATED LONG TERM RETURN is a measure of the estimated return
over the estimated life of the Fund. This represents an average of the
- ----------------------------------- yields to maturity (or in certain cases, to an earlier call date) of
/ / DESIGNED FOR HIGH the individual bonds in the Portfolio, adjusted to reflect the maximum
CURRENT INCOME sales charge and estimated expenses. The average yield for the
/ / DEFINED PORTFOLIO OF Portfolio is derived by weighting each bond's yield by its market value
CORPORATE BONDS and the time remaining to the call or maturity date, depending on how
/ / MONTHLY INCOME the bond is priced. Unlike Estimated Current Return, Estimated Long
/ / INVESTMENT GRADE Term Return takes into account maturities, discounts and premiums of
/ / FOREIGN HOLDERS TAX EXEMPT the underlying bonds.

No return estimate can be predictive of your actual return because
7.27% returns will vary with purchase price (including sales charges), how
ESTIMATED CURRENT RETURN long units are held, changes in Portfolio composition, changes in
interest income and changes in fees and expenses. Therefore, Estimated
Current Return and Estimated Long Term Return are designed to be
7.50% comparative rather than predictive. A yield calculation which is more
ESTIMATED LONG TERM RETURN comparable to an individual bond may be higher or lower than Estimated
Current Return or Estimated Long Term Return which are more comparable
to return calculations used by other investment products.

AS OF APRIL 8, 1997

------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADE-
QUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
SPONSORS: THE CONTRARY IS A CRIMINAL OFFENSE.

Merrill Lynch, Inquiries should be directed to the Trustee at 1-800-221-7771.
Pierce, Fenner & Smith Incorporated Prospectus dated April 9, 1997.
Smith Barney Inc.
Prudential Securities Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR
Dean Witter Reynolds Inc. FUTURE REFERENCE.
PaineWebber Incorporated

</TABLE>

<PAGE>
Defined Asset FundsSM

Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into "units" representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.

Defined Asset Funds offer several defined "distinctives". You know in advance
what you are investing in and that changes in the portfolio are limited -- a
defined portfolio. Most defined bond funds pay interest monthly -- defined
income. The portfolio offers a convenient and simple way to invest -- simplicity
defined.

Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:

- Municipal bond portfolios
- Corporate bond portfolios
- Government bond portfolios
- Equity portfolios
- International bond and equity portfolios

The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with "laddered maturities" to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.

- --------------------------------------------------------------------------
Defined Monthly Payment Series
- --------------------------------------------------------------------------

Our defined portfolio of long term corporate bonds offers you a simple and
convenient way to earn a high level of current monthly income. And by purchasing
Defined Asset Funds, you not only receive professional selection but also gain
the advantage of reduced risk by investing in bonds of several different
issuers.

INVESTMENT OBJECTIVE

To provide a high level of current income through investment in a fixed
portfolio consisting primarily of long- term corporate bonds.

DIVERSIFICATION

The Portfolio is diversified among 13 corporate and government bond issues.
Spreading your investment among different issuers reduces your risk, but does
not eliminate it. Because of deposits of additional bonds during the initial
offering period of the Fund and maturities, sales or other dispositions of
bonds, the size, composition and return of the Portfolio will change over time.

- --------------------------------------------------------------------------
Defining Your Portfolio
- --------------------------------------------------------------------------

PROFESSIONAL SELECTION AND SUPERVISION

The Portfolio contains a variety of bonds selected by experienced buyers. The
Fund is not actively managed; however, it is regularly reviewed and a bond can
be sold if retaining it is considered detrimental to investors' interests.

TYPES OF BONDS

The Portfolio consists of $6,276,000 face amount of bonds issued primarily by 13
different corporate and government issuers.

APPROXIMATE
PERCENTAGE OF
ISSUERS PORTFOLIO
- ---------------------------------------

<S> <C>
Corporate Utilities 48%
Financial Institutions 16%
Foreign Government 8%
Manufacturing 24%
U.S. Government 4%

</TABLE>

BOND CALL FEATURES

It is possible that during periods of falling interest rates, a bond with a
coupon higher than current market rates will be prepaid or "called", at the
option of the bond issuer, before its expected maturity. When bonds are
initially callable, the price is usually at a premium to par which then declines
to par over time. Bonds may also be subject to a mandatory sinking fund or have
extraordinary redemption provisions. For example, if the bond's proceeds are not
able to be used as intended the bond may be redeemed. This redemption and the
sinking fund are often at par.

CALL PROTECTION

Although many bonds are subject to optional refunding or call provisions, we
have selected bonds with call protection. This call protection means that any
bond in the Portfolio generally cannot be called for a number of years and
thereafter at a declining premium over par.

TAX INFORMATION

In the opinion of special counsel to the Sponsors, each Holder will be
considered to have received the interest on his pro rata portion of each bond
and U.S. Treasury Security when that interest is received by the Fund. This
interest is subject to U.S. Federal income taxes for U.S. investors but exempt
from U.S. Federal income taxes, including withholding taxes, for many foreign
investors. In addition, the Sponsors believe that interest on the U.S. Treasury
Securities is exempt from state and local personal income taxes. (See Taxes in
Part B.)
A-2

<PAGE>
- --------------------------------------------------------------------------
Defining Your Investment
- --------------------------------------------------------------------------

PUBLIC OFFERING PRICE PER UNIT $982.58

The Public Offering Price as of April 8, 1997, the business day prior to the
Initial Date of Deposit, is based on the aggregate offer side value of the
underlying bonds in the Fund ($5,894,167.60), plus cash ($75,000.00), divided by
the number of units (6,075). The Public Offering Price on any subsequent date
will vary. An amount equal to net accrued but undistributed interest on the unit
is added to the Public Offering Price. The underlying bonds are evaluated by an
independent evaluator at 3:30 p.m. Eastern time.

LOW MINIMUM INVESTMENT

You can get started with a minimum purchase of about $1,000.

UNIT PAR VALUE

The par value of your unit--the amount of money you will receive by termination
of the Fund, assuming all the bonds are paid at maturity or are redeemed by the
issuer at par or sold by the Fund at par to meet redemptions--is $1,000.

REINVESTMENT OPTION

You can elect to automatically reinvest your distributions into a separate
portfolio of corporate bonds. Reinvesting helps to compound your income.

DISTRIBUTIONS

Principal from sales, redemptions and maturities of bonds in the Fund other than
the U.S. Treasury Securities will be distributed to investors periodically when
the amount to be distributed is more than $5.00 per unit. Interest income
received on the short-term U.S. Treasury Securities will be distributed at the
end of each of the first three years of the Fund.

TERMINATION DATE

The Fund will generally terminate following the maturity date of the last
maturing bond listed in the Portfolio. The Fund may be terminated earlier if the
value is less than 40% of the face amount of bonds deposited.

SPONSORS' PROFIT OR LOSS

The Sponsors' profit or loss associated with the Fund will include the receipt
of applicable sales charges, any fees for underwriting or placing bonds,
fluctuations in the Public Offering Price or secondary market price of units, a
gain of $22,815.10 on the initial deposit of the bonds and a gain or loss on
subsequent deposits of additional bonds (see Underwriters' and Sponsors' Profits
in Part B).

UNDERWRITING ACCOUNT

One or more of the Sponsors have participated as sole underwriter, managing
underwriter or member of an underwriting syndicate from which approximately 36%
of the bonds in the Portfolio were acquired.

<S> <C>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
P.O. Box 9051,
Princeton, NJ 08543-9051 68.25%

SMITH BARNEY INC.
388 Greenwich Street--23rd Floor,
New York, NY 10013 12.00%

PRUDENTIAL SECURITIES INCORPORATED
One New York Plaza
New York, NY 10292 4.94%

DEAN WITTER REYNOLDS INC.
Two World Trade Center--59th Floor,
New York, NY 10048 8.23%

PAINEWEBBER INCORPORATED
1285 Avenue of the Americas,
New York, NY 10019 6.58%
------------

100.00%
------------

</TABLE>

- --------------------------------------------------------------------------
Defining Your Risks
- --------------------------------------------------------------------------

RISK FACTORS

The Fund is concentrated in bonds issued by Corporate Utilities and is therefore
dependent to a significant degree on revenues generated from those particular
activities (see Risk Factors in Part B).

Unit price fluctuates and could be adversely affected by increasing interest
rates as well as the financial condition of the issuers of the bonds. Because of
the possible maturity, sale or other disposition of securities, the size,
composition and return of the portfolio may change at any time. Because of the
sales charges, returns of principal and fluctuations in unit price, among other
reasons, the sale price will generally be less than the cost of your units. Unit
prices could also be adversely affected if a limited trading market exists in
any security to be sold. There is no guarantee that the Fund will achieve its
investment objective.

- --------------------------------------------------------------------------
Defining Your Costs
- --------------------------------------------------------------------------

SALES CHARGES

The Fund does not have an up-front sales charge in the initial offering period
until after the deduction of the first deferred sales charge from holders of
record on November 10, 1997. In the first three years of owning your units you
will pay a deferred sales charge of $15 per unit each year, a total of $45.00 to
be collected as follows: in the first year, $5.00 payable November, February and
May; in the second and third years, $3.75 quarterly August, November, February
and May. This deferred sales charge will be paid from principal proceeds from
the periodic sale or maturity of the short-term U.S. Treasury securities in the
Portfolio.
A-3

<PAGE>
Units purchased after November 10, 1997 will be charged an up-front sales charge
equal to 0.50% per unit based on the Public Offering Price (less the value of
the short-term securities reserved to pay the deferred sales charge not yet
accrued) multiplied by the number of deferred sales charge payments already
deducted. For example, units purchased after February 10, 1998 would be charged
an up-front sales charge equal to 1.00% per unit and a deferred sales charge of
$35.00. (See How to Buy Units in Part B.)

Although the Fund is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.

As a %
of Initial Offering Amount
Period Public Per $1,000
Offering Price Invested
------------------- -----------

Maximum Sales Charges 4.50% $45.00

</TABLE>

The Fund (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds.

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average
Net Assets* Per Unit
------------- ----------

<S> <C> <C>
Trustee's Fee .074% $0.72

Portfolio Supervision,
Bookkeeping and
Administrative Fees .042% $0.41

Organizational Expenses .020% $0.20

Evaluator's Fee .033% $0.32

Other Operating Expenses .022% $0.22
------------ ----------

TOTAL .191% $1.87

</TABLE>

- ---------
*Based on the mean of the bid and offer side evaluations.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 3 Years 5 Years 10 Years

$47 $51 $56 $69

</TABLE>

No redemption at the end of the periods:

1 Year 3 Years 5 Years 10 Years

$17 $51 $56 $69

</TABLE>

The example assumes reinvestment of all distributions into additional units of
the Fund (a reinvestment option different from that offered by this Fund) and
uses a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Costs Over Time above
reflect both sales charges and operating expenses on an increasing investment
(because the net annual return is reinvested). The example should not be
considered a representation of past or future expenses or annual rate of return;
the actual expenses and annual rate of return may be more or less than the
example.

REDEEMING OR SELLING YOUR INVESTMENT

You may redeem or sell your units at any time. Your price is generally based on
the offer side evaluation of the bonds during the initial public offering period
and for at least the first four months of the Fund and on the lower, bid side
evaluation thereafter, as determined by an independent evaluator, plus principal
cash, if any, as well as accrued interest. The redemption and Sponsors'
repurchase price as of April 8, 1997 was $45.00 less than the Public Offering
Price, reflecting the deduction of the deferred sales charge, which declines by
$5.00 in each of the last three quarters of the first year of the fund, and by
$3.75 quarterly in the second and third years of the Fund. If you redeem or sell
your units before the final deferred sales charge installment deduction, you
will pay the remaining balance of the deferred sales charge. (See How to Buy
Units in Part B.)

- --------------------------------------------------------------------------
Defining Your Income
- --------------------------------------------------------------------------

MONTHLY INTEREST INCOME

The Fund pays monthly income, even though the bonds generally pay interest
semi-annually.

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

<S> <C>
First Distribution per unit
(May 25, 1997): $ 6.15

Regular Monthly Income per unit
(Beginning on June 25, 1997): $ 5.95

Annual Income per unit: $71.42

</TABLE>

These figures are estimates determined as of the business day prior to the
Initial Date of Deposit and actual payments may vary.

Estimated cash flows are available upon request from the Sponsors.
A-4

<PAGE>
- --------------------------------------------------------------------------
Defined Portfolio
- --------------------------------------------------------------------------

Corporate Income Fund
Monthly Payment Series--401
April 9, 1997
<TABLE>
<CAPTION>

RATINGS OF
ISSUES (1)
-----------------

OPTIONAL SINKING
STANDARD REFUNDING FUND COST
PORTFOLIO TITLE & POOR'S MOODY'S FITCH REDEMPTIONS (2) REDEMPTIONS (2) TO FUND (3)
- ------------------------------------ --------- ------- ------ ---------------- ---------------- ---------------

<S> <C> <C> <C> <C> <C> <C> <C>
1. $500,000 Banc One Corporation, A+ A1 NR - - $ 479,375.00
Subordinated Debentures, 7.625%,
10/15/26

2. $500,000 BellSouth AAA Aaa NR 5/15/05 @ 103.66 - 476,875.00
Telecommunications, Debentures,
7.625%, 5/15/35

3. $500,000 Ford Motor Company, A+ A1 NR - - 476,875.00
Debentures, 7.50%, 8/1/26

4. $500,000 General Motors A- A3 A- - - 471,250.00
Corporation, Debentures, 7.40%,
9/1/25

5. $500,000 GTE Telephone A A3 A 2/1/07 @ 103.95 - 488,750.00
Corporation, Debentures, 7.90%,
2/1/27

6. $500,000 IBM Corporation, A A1 AA- - - 451,875.00
Debentures, 7.00%, 10/30/25

7. $500,000 NationsBank Corporation, A A2 A - - 462,500.00
Subordinated Notes, 7.25%, 10/15/25

8. $500,000 New York Telephone A A2 A+ 2/1/03 @ 102.88 - 478,750.00
Company, Debentures, 7.625%, 2/1/23

9. $500,000 Pacific Bell Telephone AA- A1 NR 2/1/03 @ 102.94 - 465,625.00
Company, Debentures, 7.50%, 2/1/33

10. $500,000 Pacific Gas & Electric A A2 A 6/1/03 @ 103.63 - 462,500.00
Utility Company, First Refunding
Mortgage Bonds, Series 93D, 7.25%,
8/1/26

11. $500,000 Quebec Province A+ A2 NR - - 474,375.00
Government, Debentures, Series NJ,
7.50%, 7/15/23

12. $500,000 US West Communications A Aa3 A+ 9/15/03 @ 101.95 - 430,625.00
Company, Debentures, 6.875%, 9/15/33

13. $276,000 United States Treasury AAA Aaa AAA - - 274,792.60
Notes, 6.00% to 6.375%, 5/31/98
through 5/31/00 (4)

---------------
$ 5,894,167.60
---------------

</TABLE>

- ---------
(1) These ratings have been furnished by the Evaluator but not confirmed by
Standard & Poor's, Moody's or Fitch. NR indicates that no rating has been
assigned. (See Appendix A to Part B.)
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, 100% of the bonds were deposited at a
discount from par. On the business day prior to the Initial Date of Deposit, the
bid side evaluation was .50% lower than the offer side evaluation.
(4) It is anticipated that principal received upon the sale or maturity of these
securities will be applied to the payment of the investors' deferred sales
charge; the interest income will be distributed at the end of each year. These
amounts have not been included in the calculation of the Fund's Estimated
Current or Long Term Returns.
A-5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

The Sponsors, Trustee and Holders of Corporate Income Fund, Monthly Payment
Series--401, Defined Asset Funds (the "Fund"):

We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Fund as of April 9, 1997. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash and an irrevocable letter of credit deposited for the
purchase of securities, as described in the statement of condition, with the
Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of April 9, 1997 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
NEW YORK, N.Y.
APRIL 9, 1997

STATEMENT OF CONDITION AS OF APRIL 9, 1997

<S> <C>
TRUST PROPERTY
Investments--Bonds and Contracts to purchase Bonds(1) $5,894,167.60
Cash 75,000.00
Accrued interest to initial date of deposit on underlying Bonds 128,213.12
Organizational Costs(2) 18,225.00
------------
$6,115,605.72
Total ------------
------------

LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Advance by the Trustee for accrued interest(3) $ 128,213.12
Accrued Liability(2) 18,225.00
------------
Subtotal 146,438.12
------------
Interest of Holders of 6,075 Units of fractional undivided interest outstanding:
Cost to investors(4)(5) $5,969,167.60
Total ------------
$6,115,605.72
------------
------------

</TABLE>

- ---------
(1) Aggregate cost to the Fund of the bonds listed under Defined Portfolio is
based on the offer side evaluation determined by the Evaluator at the evaluation
time on the business day prior to the Initial Date of Deposit. The contracts to
purchase the bonds are collateralized by an irrevocable letter of credit which
has been issued by The Fuji Bank, Ltd., New York Branch, in the amount of
$6,002,039.24 and deposited with the Trustee. The amount of the letter of credit
includes $5,871,352.50 for the purchase of $6,276,000 face amount of the bonds,
plus $130,686.74for accrued interest.
(2) This represents a portion of the Fund's organizational costs, which will be
deferred and amortized over five years. Organizational costs have been estimated
based on projected Fund size of 18,225 units. To the extent the Fund is larger
or smaller, the amount paid may vary.
(3) Representing a special distribution by the Trustee to the Sponsors of an
amount equal to the accrued interest on the bonds as of the Initial Date of
Deposit.
(4) Mandatory distributions of $5.00 per Unit are payable November, 1997,
February and May, 1998, and of $3.75 per Unit are payable quarterly thereafter,
up to an aggregate of $45.00 per unit over a three-year period. Distributions
will be made to an account maintained by the Trustee from which the deferred
sales charge obligations of the investors to the Sponsors will be satisfied. If
units are redeemed prior to the third anniversary of the Fund, the remaining
portion of the distribution applicable to those units will be transferred to
that account on the redemption date.
(5) Aggregate public offering price (exclusive of interest computed on the
basis of the offer side evaluation of the underlying bonds as of the evaluation
time on the business day prior to the Initial Date of Deposit.

A-6

<PAGE>
CORPORATE INCOME FUND
MONTHLY PAYMENT SERIES
DEFINED ASSET FUNDS

I want to learn more about automatic reinvestment in the
Investment Accumulation Program. Please send me
information about participation in the Corporate Fund
Accumulation Program, Inc. and a current Prospectus.

My name (please print)

My address (please print):
Street and Apt. No.

City, State, Zip Code

This page is a self-mailer. Please complete the
information above, cut along the dotted line, fold along
the lines on the reverse side, tape, and mail with the
Trustee's address displayed on the outside.

1 2 3 4 5 6 7 8

<PAGE>
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
BUSINESS REPLY MAIL
FIRST CLASS PERMIT NO. 1313 NEW YORK, NY
POSTAGE WILL BE PAID BY ADDRESSEE
THE BANK OF NEW YORK
P.O. BOX 974
WALL STREET STATION
NEW YORK, NY 10268-0974
(Fold along this line.)
(Fold along this line.)

<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
CORPORATE INCOME FUND

THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED OR
PRECEDED BY PART A.
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE, AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.

Index

PAGE PAGE
---- -----

Fund Description. . . . . . . . . . . 1 Trust Indenture. . . . . . . . . . . . 10

Risk Factors. . . . . . . . . . . . . 2 Miscellaneous. . . . . . . . . . . . . 10

How to Buy Units. . . . . . . . . . . 4 Exchange Option. . . . . . . . . . . . 12

How to Redeem or Sell Units. . . . . 6 Supplemental Information. . . . . . . . 12

Income, Distributions and Reinvestment 7 Appendix A--Description of Ratings. . . a-1

Fund Expenses. . . . . . . . . . . . 8 Appendix B--Secondary Market Sales Chart
Schedule. . . . . . . . . . . . . . . .

Taxes. . . . . . . . . . . . . . . . 8 b-1

Records & Reports. . . . . . . . . . 9

</TABLE>

FUND DESCRIPTION

BOND PORTFOLIO SELECTION

Professional buyers and research analysts for Defined Asset Funds, with access
to extensive research, selected the Bonds for the Portfolio after considering
the Fund's investment objective as well as the quality of the Bonds (all Bonds
in the Portfolio are initially rated in the category A or better by at least one
nationally recognized rating organization or have comparable credit
characteristics), the yield and price of the Bonds compared to similar
securities, the maturities of the Bonds and the diversification of the
Portfolio. Only issues meeting these stringent criteria of the Defined Asset
Funds team of dedicated research analysts are included in the Portfolio. No
leverage or borrowing is used nor does the Portfolio contain other kinds of
securities to enhance yield. A summary of the Bonds in the Portfolio appears in
Part A of the Prospectus. In a Fund that includes multiple Trusts or Portfolios,
the word Fund should be understood to mean each individual Trust or Portfolio.
The word Bond should be understood generally to include any short term U.S.
Treasury Securities in the Portfolio.

The deposit of the Bonds in the Fund on the initial date of deposit
established a proportionate relationship among the face amounts of the Bonds.
During the 90-day period following the initial date of deposit the Sponsors may
deposit additional Bonds in order to create new Units, maintaining to the extent
possible that original proportionate relationship. Deposits of additional Bonds
subsequent to the 90-day period must generally replicate exactly the
proportionate relationship among the face amounts of the Bonds at the end of the
initial 90-day period.

Yields on bonds depend on many factors including general conditions of the
bond markets, the size of a particular offering and the maturity and quality
rating of the particular issues. Yields can vary among bonds with similar
maturities, coupons and ratings. Ratings represent opinions of the rating
organizations as to the quality of the bonds rated, based on the credit of the
issuer or any guarantor, insurer or other credit provider, but these ratings are
only general standards of quality (see Appendix A).

After the initial date of deposit, the ratings of some Bonds may be reduced or
withdrawn, or the credit characteristics of the Bonds may no longer be
comparable to bonds rated A or better. Bonds rated BBB or Baa (the lowest
investment grade rating) or lower may have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than is the case
with higher grade bonds. Bonds rated below investment grade or unrated bonds
with similar credit characteristics are often subject to greater market
fluctuations and risk of loss of principal and income than higher grade bonds
and their value may decline precipitously in response to rising interest rates.

<PAGE>
Because each Defined Asset Fund is a preselected portfolio of bonds, you know
the securities, maturities, call dates and ratings before you invest. Of course,
the Portfolio will change somewhat over time, as additional Bonds are deposited
in order to create new Units, Bonds mature, are redeemed or are sold to meet
Unit redemptions or in other limited circumstances. Because the Portfolio is not
actively managed and principal is returned as the Bonds are disposed of, this
principal should be relatively unaffected by changes in interest rates.

BOND PORTFOLIO SUPERVISION

The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. The Fund may retain an issuer's bonds despite adverse financial
developments. Experienced financial analysts regularly review the Portfolio and
a Bond may be sold in certain circumstances including the occurrence of a
default in payment or other default on the Bond, institution of certain legal
proceedings, if the Bond becomes inconsistent with the Fund's investment
objectives, a decline in the price of the Bond or the occurrence of other market
or credit factors that, in the opinion of Defined Asset Funds research analysts,
makes retention of the Bond detrimental to the interests of investors. The
Trustee must generally reject any offer by an issuer of a Bond to exchange
another security pursuant to a refunding or refinancing plan.

The Sponsors and the Trustee are not liable for any default or defect in a
Bond. If a contract to purchase any Bond fails within the 90 day period
following the initial date of deposit, the Sponsors may generally deposit a
replacement bond so long as it is a corporate bond that is not a "when, as and
if issued" bond, has a fixed maturity or disposition date substantially similar
to the failed Bond and is rated A or better by at least one nationally
recognized rating organization or has comparable credit characteristics. A
replacement bond must be deposited within 110 days after the initial date of
deposit, at a cost that does not exceed the funds reserved for purchasing the
failed Bond and at a yield to maturity and current return substantially
equivalent (considering then current market conditions and relative
creditworthiness) to those of the failed Bond, as of the date the failed
contract was deposited.

RISK FACTORS

An investment in the Fund entails certain risks, including the risk that the
value of your investment will decline with increases in interest rates.
Generally speaking, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. In recent years there have been wide
fluctuations in interest rates and in the value of fixed-rate bonds generally.
The Sponsors cannot predict the direction or scope of any future fluctuations.

Certain of the Bonds may have been deposited at a market discount or premium
principally because their interest rates are lower or higher than prevailing
rates on comparable debt securities. The current returns of market discount
bonds are lower than comparably rated bonds selling at par because discount
bonds tend to increase in market value as they approach maturity. The current
returns of market premium bonds are higher than comparably rated bonds selling
at par because premium bonds tend to decrease in market value as they approach
maturity. Because part of the purchase price is returned through current income
payments and not at maturity, an early redemption at par of a premium bond will
result in a reduction in yield to the Fund. Market premium or discount
attributable to interest rate changes does not indicate market confidence or
lack of confidence in the issue.

Certain Bonds deposited into the Fund may have been acquired on a when-issued
or delayed delivery basis. The purchase price for these Bonds is determined
prior to their delivery to the Fund and a gain or loss may result from
fluctuations in the value of the Bonds.

The Fund may be concentrated in one or more of types of bonds. Set forth below
is a brief description of certain risks associated with bonds which may be held
by the Fund. Additional information is contained in the Information Supplement
which is available from the Trustee at no charge to the investor.

UTILITIES

Payments on utility bonds are dependent on various factors, including the
rates the utilities may charge, the demand for their services and their
operating costs, including expenses to comply with environmental legislation and
other energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the costs
and availability of fuel and, with certain electric utilities, the risks
associated with the nuclear industry. The movement to introduce competition in
the investor-owned electric utility industry is likely to induce them to
maintain rates as low as possible. In this effort to keep rates low, utilities
may have more trouble raising rates to completely recover investment in
generating plant.

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HOSPITAL AND HEALTH CARE FACILITIES

Payments on hospital and health care facility bonds are dependent upon
revenues of hospitals and other health care facilities. These revenues come from
private third-party payors and government programs, including the Medicare and
Medicaid programs, which have generally undertaken cost containment measures to
limit payments to health care facilities. Hospitals and health care facilities
are subject to various legal claims by patients and others and are adversely
affected by increasing cost of insurance.

BANKS AND OTHER FINANCIAL INSTITUTIONS

The profitability of a financial institution is largely dependent upon the
credit quality of its loan portfolio which, in turn, is affected by the
institution's underwriting criteria, concentrations within the portfolio and
specific industry and general economic conditions. The operating performance of
financial institutions is also impacted by changes in interest rates, the
availability and cost of funds, the intensity of competition and the degree of
governmental regulation.

TELECOMMUNICATIONS

Payments on bonds of companies in the telecommunications industry, including
local, long-distance and cellular service, the manufacture of telecommunications
equipment, and other ancillary services, are generally dependant upon the amount
and growth of customer demand, the level of rates permitted to be charged by
regulatory authorities and the ability to obtain periodic rate increases, the
effects of inflation on the cost of providing services and the rate of
technological innovation. The industry is characterized by increasing
competition in all sectors and extensive regulation by the Federal
Communications Commission and various state regulatory authorities.

INSURED SERIES

Portfolio Insurance. MBIA Insurance Corporation (the "Insurer") (see The Insurer
below) provides insurance to each Insured Series that guarantees the scheduled
payments of the principal of and interest on the Bonds ("Portfolio-Insured
Bonds") while they are owned by the Fund, but does not guarantee the market
value of the Bonds or the value of the Units. Although all Bonds are
individually insured, neither the Fund, the Units nor the Portfolio are insured
directly.

Since Portfolio Insurance applies to the Bonds only while they are owned by
the Fund, the value of Portfolio- Insured Bonds (and therefore the value of the
Units) may decline if the credit quality of any Portfolio-Insured Bond is
reduced. Premiums for Portfolio Insurance are payable monthly in advance by the
Trustee on behalf of the Fund. Upon the sale of a Portfolio-Insured Bond from
the Fund, the Trustee has the right, pursuant to an irrevocable commitment
obtained from the Insurer, to obtain insurance to maturity ("Permanent
Insurance") on the Bond upon the payment of a single, predetermined insurance
premium from the proceeds of the sale. Accordingly, any Bond in the Fund is
eligible to be sold on an insured basis. The Public Offering Price does not
reflect any element of value for Portfolio Insurance. The Evaluator will
attribute a value to the Portfolio Insurance (including the right to obtain
Permanent Insurance) for the purpose of computing the price or redemption value
of Units only if the Portfolio- Insured Bonds are in default in the payment of
principal or interest or, in the opinion of Defined Asset Funds research
analysts, in significant risk of default.

The Insurer. The Bonds in Insured Series are insured or guaranteed by MBIA
Insurance Corporation, which, according to publicly available information as of
March 31, 1996, had admitted assets of approximately $3,968,000,000 and
policyholders' surplus of approximately $1,317,000,000. MBIA Insurance
Corporation was established in 1986 and its claims-paying ability is rated AAA
by Standard & Poor's. Ratings of insurance companies are subject to change at
any time at the discretion of the rating agency. In the event that the rating of
an Insured Series is reduced, the Sponsors are authorized to direct the Trustee
to obtain other insurance on behalf of the Fund.

Insurance companies are subject to extensive regulation and supervision where
they do business by state insurance commissioners who regulate the standards of
solvency which must be maintained, the nature of and limitations on investments,
reports of financial condition, and requirements regarding reserves for unearned
premiums, losses and other matters. A significant portion of the assets of
insurance companies are required by law to be held in reserve against potential
claims on policies and is not available to general creditors. Although the
federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.

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LITIGATION AND LEGISLATION

The Sponsors do not know of any pending litigation as of the date of this
Prospectus which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the initial date of deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Bonds in the Fund. In addition, there can be no assurance that foreign
withholding taxes will not be imposed on interest on Bonds issued by non-U.S.
issuers in the future.

PAYMENT OF THE BONDS AND LIFE OF THE FUND

The size and composition of the Portfolio will change over time. Certain of
the Bonds are subject to redemption prior to their stated maturity dates
pursuant to optional refunding or sinking fund redemption provisions or
otherwise. In general, optional refunding redemption provisions are more likely
to be exercised when the value of a Bond is at a premium over par than when it
is at a discount from par. Some Bonds may be subject to sinking fund and
extraordinary redemption provisions which may commence early in the life of the
Fund. Additionally, the size and composition of the Fund will be affected by the
level of redemptions of Units that may occur from time to time. Principally,
this will depend upon the number of investors seeking to sell or redeem their
Units and whether or not the Sponsors are able to sell the Units acquired by
them in the secondary market. As a result, Units offered in the secondary market
may not represent the same face amount of Bonds as on the initial date of
deposit. Factors that the Sponsors will consider in determining whether or not
to sell Units acquired in the secondary market include the diversity of the
Portfolio, the size of the Fund relative to its original size, the ratio of Fund
expenses to income, the Fund's current and long-term returns, the degree to
which Units may be selling at a premium over par and the cost of maintaining a
current prospectus for the Fund. These factors may also lead the Sponsors to
seek to terminate the Fund earlier than its mandatory termination date.

FUND TERMINATION

The Fund will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Bond or upon the consent of investors holding 51% of the
Units. The Fund may also be terminated earlier by the Sponsors once the total
assets of the Fund have fallen below the minimum value specified in Part A of
the Prospectus. A decision by the Sponsors to terminate the Fund early will be
based on factors similar to those considered by the Sponsors in determining
whether to continue the sale of Units in the secondary market.

Notice of impending termination will be provided to investors and thereafter
Units will no longer be redeemable. On or shortly before termination, the Fund
will seek to dispose of any Bonds remaining in the Portfolio although any Bond
unable to be sold at a reasonable price may continue to be held by the Trustee
in a liquidating trust pending its final disposition. A proportional share of
the expenses associated with termination, including brokerage costs in disposing
of Bonds, will be borne by investors remaining at that time. This may have the
effect of reducing the amount of proceeds those investors are to receive in any
final distribution.

LIQUIDITY

Up to 40% of the value of the Portfolio may consist of Bonds acquired in
private placements or otherwise that may constitute restricted securities that
cannot be sold publicly by the Trustee without registration under the Securities
Act of 1933, as amended. The Sponsors nevertheless believe that, should a sale
of these Bonds be necessary in order to meet redemption of Units, the Trustee
should be able to consummate a sale with institutional investors.

The principal trading market for the Bonds will generally be in the
over-the-counter market and the existence of a liquid trading market for the
Bonds may depend on whether dealers will make a market in them. There can be no
assurance that a liquid trading market will exist for any of the Bonds,
especially since the Fund may be restricted under the Investment Company Act of
1940 from selling Bonds to any Sponsor. The value of the Portfolio will be
adversely affected if trading markets for the Bonds are limited or absent.

HOW TO BUY UNITS

Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund.

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PUBLIC OFFERING PRICE

Net accrued interest and principal cash, if any, are added to the Public
Offering Price, the Sponsors' Repurchase Price and the Redemption Price per
Unit. This represents the interest accrued on the Bonds, net of Fund expenses,
from the initial date of deposit to, but not including, the settlement date for
Units (less any prior distributions of interest income to investors). Bonds
deposited also carry accrued but unpaid interest up to the initial date of
deposit. To avoid having investors pay this additional accrued interest (which
earns no return) when they purchase Units, the Trustee advances and distributes
this amount to the Sponsors; it recovers this advance from interest received on
the Bonds. Because of varying interest payment dates on the Bonds, accrued
interest at any time will exceed the interest actually received by the Fund.

Because accrued interest on the Bonds is not received by the Fund at a
constant rate throughout the year, any Monthly Income Distribution may be more
or less than the interest actually received by the Fund. To eliminate
fluctuations in the Monthly Income Distribution, a portion of the Public
Offering Price may consist of cash in an amount necessary for the Trustee to
provide approximately equal distributions. Upon the sale or redemption of Units,
investors will receive their proportionate share of this cash. In addition, if a
Bond is sold, redeemed or otherwise disposed of, the Fund will periodically
distribute to investors the portion of this cash that is attributable to the
Bond.

The regular Monthly Income Distribution is stated in Part A of the Prospectus
and will change as the composition of the Portfolio changes over time.

During the initial offering period and for at least the first four months of
the Fund, the Public Offering Price (and the Initial Repurchase Price) is based
on the higher, offer side evaluation of the Bonds at the next Evaluation Time
after the order is received. In the secondary market (after the initial offering
period), the Public Offering Price (and the Sponsors' Repurchase Price and the
Redemption Price) is based on the lower, bid side evaluation of the Bonds.

The Fund does not have an up-front sales charge in the initial offering period
until after the deduction of the first quarterly Deferred Sales Charge
installment which will commence on the date indicated in part A of this
Prospectus. Units redeemed or repurchased prior to the accrual of the final
Deferred Sales Charge installment will have the amount of any remaining
installments deducted from the redemption or repurchase proceeds, although this
deduction will be waived in the event of the death or disability (as defined in
the Internal Revenue Code of 1986) of an investor. Units purchased after the
deduction of the first Deferred Sales Charge installment will be charged the
up-front per Unit sales charge indicated in Part A of this Prospectus based on
the Public Offering Price (less the value of the short-term securities reserved
to pay the deferred sales charge not yet accrued), multiplied by the number of
Deferred Sales Charge installments already deducted. Units purchased after the
deduction of the final Deferred Sales Charge installment will be subject only to
an up-front sales charge as set forth in Appendix B.

In the initial offering period the concession to dealers will be equal to: the
Public Offering Price less $30.00 per Unit for Monthly Payment Series and
Insured Series and the Public Offering Price less $27.50 per Unit for
Intermediate Term Series.

EVALUATIONS

Evaluations are determined by the independent Evaluator on each Business Day.
This excludes Saturdays, Sundays and the following holidays as observed by the
New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas. Bond evaluations
are based on closing sales prices (unless the Evaluator deems these prices
inappropriate). If closing sales prices are not available, the evaluation is
generally determined on the basis of current bid or offer prices for the Bonds
or comparable securities or by appraisal or by any combination of these methods.
In the past, the bid prices of publicly offered issues have been lower than the
offer prices by as much as 11/2% or more of face amount in the case of
inactively traded issues and as little as 1/4 of 1% in the case of actively
traded issues, but the difference between the offer and bid prices has averaged
between 1/2 of 1% and 1% of face amount. Neither the Sponsors, the Trustee or
the Evaluator will be liable for errors in the Evaluator's judgment. The fees of
the Evaluator will be borne by the Fund.

<PAGE>
CERTIFICATES

Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.

HOW TO REDEEM OR SELL UNITS

You can redeem your Units at any time for a price based on net asset value. In
addition, the Sponsors have maintained an uninterrupted secondary market for
Units for over 20 years and will ordinarily buy back Units at the same price.
The following describes these two methods to redeem or sell Units in greater
detail.

REDEEMING UNITS WITH THE TRUSTEE

You can always redeem your Units directly with the Trustee for net asset
value. This can be done by sending the Trustee a redemption request together
with any Unit certificates you hold, which must be properly endorsed or
accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a trust instrument, certificate of corporate authority, certificate of
death or appointment as executor, administrator or guardian.

Within seven days after the Trustee's receipt of your request containing the
necessary documents, a check will be mailed to you in an amount based on the net
asset value of your Units. If you redeem or sell your Units before the final
deferred sales charge installment date the remaining deferred sales charges will
be deducted from the net asset value. Because of sales charges, market movements
or changes in the Portfolio, net asset value at the time you redeem your Units
may be greater or less than the original cost of your Units. Net asset value is
calculated each Business Day by adding the value of the Bonds, net accrued
interest, cash and the value of any other Fund assets; deducting unpaid taxes or
other governmental charges, accrued but unpaid Fund expenses and any remaining
deferred sales charges, unreimbursed Trustee advances, cash held to redeem Units
or for distribution to investors and the value of any other Fund liabilities;
and dividing the result by the number of outstanding Units. Bonds are evaluated
on the offer side during the initial offering period and for at least the first
four months of the Fund (even in the secondary market) and on the bid side
thereafter.

As long as the Sponsors are maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsors for net asset value. If the Sponsors are not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.

If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Bonds selected by the Agent for the Sponsors
based on market and credit factors determined to be in the best interest of the
Fund. These sales are often made at times when the Bonds would not otherwise be
sold and may result in lower prices than might be realized otherwise and may
also reduce the size and diversity of the Fund. If Bonds are being sold during a
time when additional Units are being created by the purchase of additional Bonds
(as described under Portfolio Selection), Bonds will be sold in a manner
designed to maintain, to the extent practicable, the proportionate relationship
among the face amounts of each Bond in the Portfolio.

The Trustee is authorized, on a redemption request for Units with a value
exceeding $250,000 by any investor who acquired 25% or more of the outstanding
Units of a Trust, to pay part or all of the redemption "in kind" (by the
distribution of Bonds and cash with an aggregate value equal to the applicable
Redemption Price of the Units tendered for redemption). The Trustee will attempt
to make a pro rata distribution of Bonds in the Portfolio, but reserves the
right to distribute solely one or more Bonds. This distribution will be made to
the distribution agent and either held for the account of the investor or
disposed of in accordance with the instructions of the investor. Any transaction
costs as well as transfer and ongoing custodial fees on sales of the Bonds
distributed in kind will be borne by the redeeming investor.

Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closing), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Bonds not
reasonably practicable or (iii) for any other period permitted by SEC order.

<PAGE>
SPONSORS' MARKET FOR UNITS

The Sponsors, while not obligated to do so, will buy back Units at new asset
value without any sales charge as long as they are maintaining a secondary
market for Units. Because of sales charges, market movements or changes in the
portfolio, net asset value at the time you sell your Units may be greater or
less than the original cost of your Units. The Sponsor may resell the Units to
other buyers or redeem the Units by tendering them to the Trustee. You should
consult your financial professional for current market prices to determine if
other broker- dealers or banks are offering higher prices for Units.

The Sponsors may discontinue this market without prior notice if the supply of
Units exceeds demand or for other business reasons. Regardless of whether the
Sponsors maintain a secondary market, you have the right to redeem your Units
for net asset value with the Trustee at anytime, as described above.

INCOME, DISTRIBUTIONS AND REINVESTMENT

INCOME

Some of the Bonds may have been purchased on a when-issued basis or may have a
delayed delivery. Since interest on these Bonds does not begin to accrue until
the date of their delivery to the Fund, in order to provide income to investors
for this non-accrual period, the Trustee will advance Funds to the Fund in an
amount equal to the amount of interest that would have accrued on these Bonds
between the date of settlement for the Units and the dates of delivery of the
Bonds. If a when-issued Bond is not delivered until later than expected and the
amount of the Trustee's annual fee and expenses is insufficient to cover the
additional accrued interest, the Sponsors will treat the contracts as failed
Bonds.

Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.

DISTRIBUTIONS

Each Unit receives an equal share of monthly distributions of interest income
net of estimated expenses. Interest on the Bonds is generally received by the
Fund on a semi-annual or annual basis. Because interest on the Bonds is not
received at a constant rate throughout the year, any Monthly Income Distribution
may be more or less than the interest actually received. To eliminate
fluctuations in the Monthly Income Distribution, the Trustee will advance
amounts necessary to provide approximately equal interest distributions; it will
be reimbursed, without interest, from interest received on the Bonds, but the
Trustee is compensated, in part, by holding the Fund's cash balances in
non-interest bearing accounts. Along with the Monthly Income Distributions, the
Trustee will distribute the investor's pro rata share of principal received from
any disposition of a Bond to the extent available for distribution. In addition,
interest income received on the short-term U.S. Treasury securities in the
Portfolio will be distributed at the end of each of the first three years of the
Fund.

The initial estimated annual income per Unit, after deducting estimated annual
Fund expenses as stated in Part A of the Prospectus, will change as Bonds
mature, are called or sold or otherwise disposed of, as replacement bonds are
deposited and as Fund expenses change. Because the Portfolio is not actively
managed, income distributions will generally not be affected by changes in
interest rates. Depending on the financial conditions of the issuers of the
Bonds, the amount of income should be substantially maintained as long as the
Portfolio remains unchanged; however, optional bond redemptions or other
Portfolio changes may occur more frequently when interest rates decline, which
would result in early returns of principal and possibly earlier termination of
the Fund.

REINVESTMENT

Distributions will be paid in cash unless the investor elects to have
distributions reinvested without sales charge in The Corporate Fund Accumulation
Program, Inc. The Program is an open-end management investment company whose
investment objective is to obtain a high level of current income by investing in
a diversified portfolio consisting primarily of long-term corporate bonds rated
A or better or with comparable credit characteristics. It should be noted,
however, that interest distributions to foreign Investors from this Program will
be subject to U.S. Federal income taxes, including withholding taxes. Investors
participating in the Program will be taxed on their reinvested distributions in
the manner described in Taxes even though distributions are automatically
reinvested. For more complete information about the Program, including charges
and expenses, request the Program's prospectus from the Trustee. Read it
carefully before you decide to participate. Written notice of election to
participate must be
7

<PAGE>
received by the Trustee at least ten days before the Record Day for the first
distribution to which the election is to apply.

FUND EXPENSES

Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee's fee shown
in Part A of this Prospectus assumes that the Portfolio will reach a size
estimated by the Sponsors and is based on a sliding fee scale that reduces the
Trustee's fee as the size of the Portfolio increases. The Trustee also benefits
when it holds cash for the Fund in non-interest bearing accounts. Possible
additional charges include Trustee fees and expenses for maintaining the Fund's
registration statement current with Federal and State authorities, extraordinary
services, costs of indemnifying the Trustee and the Sponsors, costs of action
taken to protect the Fund and other legal fees and expenses, Fund termination
expenses and any governmental charges. The Trustee has a lien on Fund assets to
secure reimbursement of these amounts and may sell Bonds for this purpose if
cash is not available. The Sponsors receive an annual fee currently estimated at
$0.35 per $1,000 face amount to reimburse them for the cost of providing
Portfolio supervisory services to the Fund. While the fee may exceed their costs
of providing these services to the Fund, the total supervision fees from all
Series of Corporate Income Fund will not exceed their costs for these services
to all of those Series during any calendar year. The Sponsors may also be
reimbursed for their costs of providing bookkeeping and administrative services
to Defined Asset Funds, currently estimated at $0.10 per Unit. The Trustee's,
Sponsors' and Evaluator's fees may be adjusted for inflation without investors'
approval.

All or some portion of the expenses incurred in establishing the Fund,
including the cost of the initial preparation of documents relating to the Fund,
Federal and State registration fees, the initial fees and expenses of the
Trustee, legal expenses and any other out-of-pocket expenses will be paid by the
Fund, and amortized over five years. Any balance of the expenses incurred in
establishing the Fund, as well as advertising and selling expenses will be paid
from the Underwriting Account at no charge to the Fund. Sales charges on Defined
Asset Funds range from under 1.0% to 5.5%. This may be less than you might pay
to buy and hold a comparable managed fund. Defined Asset Funds can be a
cost-effective way to purchase and hold investments. Annual operating expenses
are generally lower than for managed funds. Because Defined Asset Funds have no
management fees, limited transaction costs and no ongoing marketing expenses,
operating expenses are generally less than 0.25% a year. When compounded
annually, small differences in expense ratios can make a big difference in your
investment results.

TAXES

The following discussion addresses only the tax consequences of Units held as
capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies.

Neither the Sponsors nor Davis Polk & Wardwell have made or will make a review
of the facts and circumstances relating to the issuance of any Bonds. To the
best knowledge of the Sponsors, each Bond will be treated as debt for tax
purposes by the respective issuers. The Internal Revenue Service, however, is
not bound by an issuer's treatment and may take the position that a Bond has
more equity than debt features and, accordingly, should be treated as equity. In
the event of such a recharacterization, a withholding tax at the statutory rate
of 30% (or a lesser treaty rate) would apply on distributions to Foreign
Investors in respect of that Bond.

After the end of each calendar year, the Trustee will furnish to each investor
an annual statement containing information relating to the interest received by
the Fund on the Bonds and U.S. Treasury Securities, the gross proceeds received
by the Fund from the disposition of any Bond or U.S. Treasury Security
(resulting from redemption or payment at maturity of any Bond or U.S. Treasury
Security or the sale by the Fund of any Bond or U.S. Treasury Security), and the
fees and expenses paid by the Fund. The Trustee will also furnish annual
information returns to each investor and to the Internal Revenue Service.

The Sponsors believe that investors will not be subject to any state or local
personal income taxes on the interest from U.S. Treasury Securities. Investors
should consult their own tax advisers with respect to state and local taxation.

In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:

The Fund is not an association taxable as a corporation for federal income
tax purposes. Each investor will be considered the owner of a pro rata portion
of each Bond and U.S. Treasury Security in the Fund under the grantor trust
rules of Sections 671-679 of the Internal Revenue Code of 1986, as amended
(the "Code"). The total cost to an investor of his Units, including sales
charges and organizational expenses borne by the investor,
8

<PAGE>
is allocated to his pro rata portion of each Bond, in proportion to the fair
market values thereof on the date the investor purchases his Units, in order
to determine his tax basis for his pro rata portion of each Bond.

Each investor will be considered to have received the interest on his pro
rata portion of each Bond and U.S. Treasury Security when that interest is
received by the Fund regardless of whether it is automatically reinvested or
used to pay Fund expenses. An individual investor who itemizes deductions may
deduct his pro rata share of expenses of the Fund only to the extent that such
amount together with the investor's other miscellaneous deductions exceeds 2%
of his adjusted gross income.

If an investor's tax basis for his pro rata portion of a Bond or U.S.
Treasury Security exceeds the redemption price at maturity thereof (subject to
certain adjustments), the investor will be considered to have purchased his
pro rata portion of the Bond or U.S. Treasury Security at a "bond premium".
The investor may elect to amortize the bond premium prior to the maturity of
the Bond or U.S. Treasury Security, as the case may be. An election to
amortize bond premium applies to all taxable debt obligations then owned and
thereafter acquired by the investor and may be revoked only with the consent
of the Internal Revenue Service. The amount amortized in any year should be
applied to offset the investor's interest from the Bond or U.S. Treasury
Security, as the case may be, and will result in a reduction of basis for his
pro rata portion of the Bond or U.S. Treasury Security, as the case may be.

Upon a disposition of all or part of an investor's pro rata portion of a
Bond or U.S. Treasury Security (by sale, exchange or redemption of the Bond or
by the sale or redemption of all or some of his Units), an investor will
generally recognize taxable gain or loss, which will generally be capital gain
or loss. However, gain from the disposition will generally be ordinary income
to the extent that "market discount" has accrued (but not been included in
income pursuant to an election). An investor's pro rata portion of a Bond or
U.S. Treasury Security will have "market discount" in the amount of any excess
of (i) the redemption price at maturity (or, if the Bond or U.S. Treasury
Security has original issue discount, the issue price plus all original issue
discount that accrued to previous holders) over (ii) the investor's original
tax cost.

Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and income received by the Fund
will be treated as the income of the investors in the same manner as for
federal income tax purposes.

Notwithstanding the foregoing, an investor who is a non-resident alien
individual or a foreign corporation (a "Foreign Investor") will generally not
be subject to U.S. federal income taxes, including withholding taxes, on the
interest income on, or any gain from the sale or other disposition of, his pro
rata portion of any Bond or U.S. Treasury Security provided that (i) the
interest income or gain is not effectively connected with the conduct by the
Foreign Investor of a trade or business within the United States, (ii) if the
interest is United States source income (which is the case on most Bonds
issued by United States issuers), the Foreign Investor does not own, actually
or constructively, 10% or more of the total combined voting power of all
classes of voting stock of the issuer of the Bond and is not a controlled
foreign corporation related (within the meaning of Section 864 (d)(4) of the
Code) to the issuer of the Bond, (iii) with respect to any gain, the Foreign
Investor (if an individual) is not present in the United States for 183 days
or more during the taxable year and (iv) the Foreign Investor provides the
required certification of his status and of certain other matters. Withholding
agents will file with the Internal Revenue Service foreign person information
returns with respect to such interest payments accompanied by such
certifications. Foreign Investors should consult their own tax advisers with
respect to United States federal income tax consequences of ownership of
Units.

The foregoing discussion relates only to U.S. federal and certain aspects
of New York State and City income taxes. Investors may be subject to taxation
in New York and other jurisdictions (including a Foreign Investor's country of
residence) and should consult their own tax advisers in this regard.

RECORDS AND REPORTS

The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Bonds and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks associated
with the Bonds held by the Fund, which may be inspected by investors at
reasonable times during business hours.

<PAGE>
With each distribution, the Trustee includes a statement of the interest and
any other receipts being distributed. Within five days after deposit of Bonds in
exchange or substitution for Bonds (or contracts) previously deposited, the
Trustee will send a notice to each investor, identifying both the Bonds removed
and the replacement bonds deposited. The Trustee sends each investor of record
an annual report summarizing transactions in the Fund's accounts and amounts
distributed during the year and Bonds held, the number of Units outstanding and
the Redemption Price at year end, the interest received by the Fund on the
Bonds, the gross proceeds received by the Fund from the disposition of any Bond
(resulting from redemption or payment at maturity or sale of any Bond), and the
fees and expenses paid by the Fund, among other matters. The Trustee will also
furnish annual information returns to each investor. Investors may obtain copies
of Bond evaluations from the Trustee to enable them to comply with federal and
state tax reporting requirements. Fund accounts are audited annually by
independent accountants selected by the Sponsors. Audited financial statements
are available from the Trustee on request.

TRUST INDENTURE

The Fund is a "unit investment trust" created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.

The Indenture may be amended by the Sponsors and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or other
governmental agency or to make any other change not materially adverse to the
interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.

The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.

Any Sponsor may resign so long as one Sponsor with a net worth of $2,000,000
remains and is agreeable to the resignation. A new Sponsor may be appointed by
the remaining Sponsors and the Trustee to assume the duties of the resigning
Sponsor. If there is only one Sponsor and it fails to perform its duties or
becomes incapable of acting or bankrupt or its affairs are taken over by public
authorities, the Trustee may appoint a successor Sponsor at reasonable rates of
compensation, terminate the Indenture and liquidate the Fund or continue to act
as Trustee without a Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated
has been appointed as Agent for the Sponsors by the other Sponsors.

The Sponsors, the Trustee and the Evaluator are not liable to investors or any
other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor or the Evaluator) or reckless disregard of duty. The Indenture
contains customary provisions limiting the liability of the Trustee.

MISCELLANEOUS

LEGAL OPINION

The legality of the Units has been passed upon by Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, as special counsel for the Sponsors.

AUDITORS

The Statement of Condition in Part A of the Prospectus was audited by Deloitte
& Touche LLP, independent accountants, as stated in their opinion. It is
included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.

<PAGE>
TRUSTEE

The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and New York
State banking authorities.

SPONSORS

The Sponsors are listed on the back cover of the Prospectus. They may include
Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned subsidiary of
Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-owned subsidiary
of The Travelers Inc.; Prudential Securities Incorporated, an indirect
wholly-owned subsidiary of the Prudential Insurance Company of America; Dean
Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter Discover
& Co. and PaineWebber Incorporated, a wholly-owned subsidiary of PaineWebber
Group Inc. Each Sponsor, or one of its predecessor corporations, has acted as
Sponsor of a number of series of unit investment trusts. Each Sponsor has acted
as principal underwriter and managing underwriter of other investment companies.
The Sponsors, in addition to participating as members of various selling groups
or as agents of other investment companies, execute orders on behalf of
investment companies for the purchase and sale of securities of these companies
and sell securities to these companies in their capacities as brokers or dealers
in securities.

CODE OF ETHICS

The Agent for the Sponsors has adopted a code of ethics requiring preclearance
and reporting of personal securities transactions by its personnel who have
access to information on Defined Asset Funds portfolio transactions. The code is
intended to prevent any act, practice or course of conduct which would operate
as a fraud or deceit on any Fund and to provide guidance to these persons
regarding standards of conduct consistent with the Agent's responsibilities to
the Funds.

PUBLIC DISTRIBUTION

During the initial offering period and thereafter to the extent that
additional Units continue to be offered for sale to the public by means of this
Prospectus, Units will be distributed to the public at the Public Offering Price
determined in the manner described above. The Sponsors intend to qualify Units
for sale in all states in which qualification is deemed necessary through the
Underwriting Account and by dealers who are members of the National Association
of Securities Dealers, Inc. The Sponsors do not intend to qualify Units for sale
in any foreign countries and this Prospectus does not constitute an offer to
sell Units in any country where Units cannot lawfully be sold. Sales to dealers
and to introducing dealers, if any, will initially be made at prices which
represent a concession from the Public Offering Price, but the Agent for the
Sponsors reserves the right to change the rate of any concession from time to
time. Any dealer or introducing dealer may reallow a concession up to the
concession to dealers.

UNDERWRITERS' AND SPONSORS' PROFITS

Upon sale of the Units, the Underwriters will be entitled to receive sales
charges. The Sponsors also realize a profit or loss on deposit of the Bonds
equal to the difference between the cost of the Bonds to the Fund (based on the
offer side evaluation on the initial date of deposit) and the Sponsors' cost of
the Bonds. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Bonds it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the initial date of deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any, made available by buyers of Units to the Sponsors prior to a
settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.

FUND PERFORMANCE

Information on the performance of the Fund for various periods, on the basis
of changes in Unit price plus the amount of income and principal distributions
reinvested, may be included from time to time in advertisements, sales
literature, reports and other information furnished to current or prospective
investors. Total return figures are not averaged, and may not reflect deduction
of the sales charge, which would decrease the return. Average annualized return
figures reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.

<PAGE>
Past performance may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the Bonds in
the Portfolio, so there may be a gain or loss when Units are sold.

Fund performance may be compared to performance data from publications such as
Lipper Analytical Services, Inc., Morningstar Publications, Inc., Money
Magazine, The New York Times, U.S. News and World Report, Barron's Business
Week, CDA Investment Technology, Inc., Forbes Magazine or Fortune Magazine. As
with other performance data, performance comparisons should not be considered
representative of the Fund's relative performance for any future period.

DEFINED ASSET FUNDS

For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to "buy with knowledge" (because, unlike
managed funds, the portfolio of municipal bonds and the return are relatively
fixed) and "hold with confidence" (because the portfolio is professionally
selected and regularly reviewed). Defined Asset Funds offers an array of simple
and convenient investment choices, suited to fit a wide variety of personal
financial goals--a buy and hold strategy for capital accumulation, such as for
children's education or retirement, or attractive, regular current income
consistent with the preservation of principal. Unit investment trusts are
particularly suited for the many investors who prefer to seek long-term income
by purchasing sound investments and holding them, rather than through active
trading. Few individuals have the knowledge, resources or capital to buy and
hold a diversified portfolio on their own; it would generally take a
considerable sum of money to obtain the breadth and diversity that Defined Asset
Funds offer. One's investment objectives may call for a combination of Defined
Asset Funds.

One of the most important investment decisions you face may be how to allocate
your investments among asset classes. Diversification among different kinds of
investments can balance the risks and rewards of each one. Most investment
experts recommend stocks for long-term capital growth. Long-term corporate bonds
offer relatively high rates of interest income. By purchasing both defined
equity and defined bond funds, investors can receive attractive current income,
as well as growth potential, offering some protection against inflation. From
time to time various advertisements, sales literature, reports and other
information furnished to current or prospective investors may present the
average annual compounded rate of return of selected asset classes over various
periods of time, compared to the rate of inflation over the same periods.

EXCHANGE OPTION

You may exchange Fund Units for units of certain other Defined Asset Funds
subject only to a reduced sales charge. You may exchange your units of any
Select Ten Portfolio, of any other Defined Asset Fund with a regular maximum
sales charge of at least 3.50%, or of any unaffiliated unit trust with a regular
maximum sales charge of at least 3.0%, for Units of this Fund at their relative
net asset values, subject only to a reduced sales charge.

To make an exchange, you should contact your financial professional to find
out what suitable Exchange Funds are available and to obtain a prospectus. You
may acquire units of only those Exchange Funds in which the Sponsors are
maintaining a secondary market and which are lawfully for sale in the state
where you reside. An exchange is a taxable event normally requiring recognition
of any gain or loss on the units exchanged. However, the Internal Revenue
Service may seek to disallow a loss if the portfolio of the units acquired is
not materially different from the portfolio of the units exchanged; you should
consult your own tax advisor. If the proceeds of units exchanged are
insufficient to acquire a whole number of Exchange Fund units, you may pay the
difference in cash (not exceeding the price of a single unit acquired).

As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.

SUPPLEMENTAL INFORMATION

Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive at no cost to the investor supplemental
information about the Fund, which has been filed with the SEC. The supplemental
information includes more detailed risk factor disclosure about the types of
Bonds that may be part of the Fund's Portfolio, general risk disclosure
concerning any insurance securing certain Bonds, and general information about
the structure and operation of the Fund.

<PAGE>
APPENDIX A

DESCRIPTION OF RATINGS (AS DESCRIBED BY THE RATING COMPANIES THEMSELVES)

STANDARD & POOR'S RATINGS GROUP, A DIVISION OF MCGRAW HILL, INC.

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
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.

BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB, B, CCC, CC--Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

The ratings may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories.

A provisional rating, indicated by "p" following a rating, assumes the
successful completion of the project being financed by the issuance of the debt
being rated and indicates that payment of debt service requirements is largely
or entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion.

MOODY'S INVESTORS SERVICE INC.

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 edge". 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.

Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

a-1
<PAGE>
Rating symbols may include numerical modifiers 1, 2 or 3. The numerical
modifier 1 indicates that the security ranks at the high end, 2 in the
mid-range, and 3 nearer the low end, of the generic category. These modifiers of
rating symbols are to give investors a more precise indication of relative debt
quality in each of the historically defined categories.

Conditional ratings, indicated by "Con.", are sometimes given when the
security for the bond depends upon the completion of some act or the fulfillment
of some condition. Such bonds are given a conditional rating that denotes their
probable credit stature upon completion of that act or fulfillment of that
condition.

FITCH INVESTORS SERVICES, INC.

AAA--These bonds are considered to be investment grade and of the highest
quality. The obligor has an extraordinary ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA--These bonds are considered to be investment grade and of high quality. The
obligor's ability to pay interest and repay principal, which very strong, is
somewhat less than for AAA rated securities or more subject to possible change
over the term of the issue.

A--These bonds are considered to be investment grade and of good quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB--These bonds are considered to be investment grade and of satisfactory
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however are more likely to weaken this ability than bonds with higher ratings.

A "+" or a "-" sign after a rating symbol indicates relative standing in its
rating.

DUFF & PHELPS CREDIT RATING CO.

AAA--Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA--High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic stress.

A--Protection factors are average but adequate. However, risk factors are more
variable and greater in periods of economic stress.

A "+" or a "-" sign after a rating symbol indicates relative standing in its
rating.

a-2
<PAGE>
APPENDIX B
SECONDARY MARKET SALES CHARGE SCHEDULE

Units purchased after the deduction of the final deferred sales charge
installment will be subject only to an up-front sales charge, as set forth
below.

<TABLE>
<CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS
BID SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE
- ---------------------------- ---------------- -------------- ----------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Less than 250. . . . . . . 5.50% 5.820% 3.575%
250 - 499. . . . . . . . . 4.50 4.712 2.925
500 - 749. . . . . . . . . 3.50 3.627 2.275
750 - 999. . . . . . . . . 2.50 2.564 1.625
1,000 or more. . . . . . . 2.00 2.041 1.300

</TABLE>

b-1
<PAGE>
Defined
Asset FundsSM

<S> <C>

SPONSORS: CORPORATE INCOME FUND
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
Defined Asset Funds Monthly Payment Series--401
P.O. Box 9051 (A Unit Investment Trust)
Princeton, NJ 08543-9051
(609) 282-8500 This Prospectus does not contain all of the information with respect
to the investment company set forth in its registration statement
Smith Barney Inc. and exhibits relating thereto which have been filed with the
Unit Trust Department Securities and Exchange Commission, Washington, D.C. under the
388 Greenwich Street--23rd Floor Securities Act of 1933 and the Investment Company Act of 1940, and
New York, NY 10013 to which reference is hereby made. Copies of filed material can be
(212) 816-4000 obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
PaineWebber Incorporated Commission also maintains a Web site that contains information
1200 Harbor Blvd. statements and other information regarding registrants such as
Weehawken, NJ 07087 Defined Asset Funds that file electronically with the Commission at
(201) 902-3000 http://www.sec.gov.
---------------------
Prudential Securities Incorporated
One New York Plaza No person is authorized to give any information or to make any
New York, NY 10292 representations with respect to this investment company not
(212) 778-6164 contained in its registration statement and related exhibits; and
any information or representation not contained therein must not be
Dean Witter Reynolds Inc. relied upon as having been authorized.
Two World Trade Center ---------------------
59th Floor
New York, NY 10048 When Units of this Series are no longer available, this Prospectus
(212) 392-2222 may be used as a preliminary prospectus for a future series, and
investors should note the following:

Information contained herein is subject to amendment. A registration
statement relating to those securities has been filed with the
Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there
be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
EVALUATOR:
Interactive Data Corporation
14 Wall Street
New York, NY 10005

TRUSTEE:
The Bank of New York
Unit Investment Trust Department
P.O. Box 974
Wall Street Division
New York, NY 10268-0974
1-800-221-7771

</TABLE>

11544-04/97

<PAGE>