<PAGE>
SAFECO TAX-EXEMPT BOND TRUST
SUPPLEMENT TO THE PROSPECTUS DATED JULY 19, 1996
SUPPLEMENT DATED NOVEMBER 25, 1996
The following information supplements the Trust's No-Load Prospectus:
1. The following information replaces the first sentence following the fourth
bullet under the subheading "Each Fund" on page 6:
"Has a minimum initial investment requirement of $1,000 for regular
accounts, $250 for accounts established under the Uniform Gift to
Minors Act ("UGMA") or Uniform Transfer to Minors Act ("UTMA")."
2. The following information replaces the first two sentences under the
subheading "Initial Purchases" on page 35:
"MINIMUM INITIAL INVESTMENT $1,000 (UGMA AND UTMA $250).
No minimum initial investment is required to establish the Automatic
Investment Method (except for certain UGMA or UTMA accounts) or
Payroll Deduction Plan."
3. The following information replaces the sentence under the subheading
"Additional Purchases" on page 35:
"MINIMUM ADDITIONAL INVESTMENT $100 FOR ALL ACCOUNTS, EXCEPT FOR UGMA
OR UTMA AUTOMATIC INVESTMENT METHOD ("AIM") ACCOUNTS OPENED WITH AN
INITIAL INVESTMENT OF $250 OR MORE. THESE ACCOUNTS HAVE A MINIMUM
ADDITIONAL INVESTMENT OF ONLY $50. THERE IS NO MINIMUM INVESTMENT FOR
DIVIDEND REINVESTMENTS."
4. The following information replaces the sentence under the subheading
"Automatic Investment Method" on page 39:
"AIM enables you to make regular monthly investments by authorizing
SAFECO Services to withdraw a specific amount from your bank account
and invest the amount in any Fund. AIM has a minimum of $100 per
withdrawal per Fund for all accounts ( except UGMA and UTMA accounts
which have a lower $50 minimum for additional investments, provided
that the account was opened with an initial investment of at least
$250)."
<PAGE>
5. The following information replaces the discussion following the first
sentence in Item 5, page 20 under the heading "The Trust and Each Fund's
Investment Policies":
Such shares will be purchased only as a medium for a Fund's short-term
investments if SAM determines that they provide a better combination
of yield and liquidity than a direct investment in short-term, tax-
exempt securities. A Fund will not invest more than 10% of its total
assets in shares issued by other investment companies, will not invest
more than 5% of its total assets in a single investment company, and
will not purchase more than 3% of the outstanding voting securities
of a single investment company.
6. The following information replaces the discussion following the first
sentence in Item 8, page 21 under the heading "The Trust and Each Fund's
Investment Policies":
"A Fund may purchase these short-term securities as a cash management
technique under those circumstances where it has cash to manage for a
short time period, for example, after receiving proceeds from the sale
of securities, dividend distributions from portfolio securities, or
cash from the sale of Fund shares to investors. Interest earned from
these short-term securities will be taxable to investors as ordinary
income when distributed."
