TWENTIETH CENTURY PREMIUM RESERVES INC, 485BPOS, 1996-08-01

TWENTIETH CENTURY PREMIUM RESERVES INC
485BPOS, 1996-08-01

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As filed with the Securities and Exchange Commission on July 31, 1996

1933 Act File No. 33-57430; 1940 Act File No. 811-7446

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 4 X

REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 4 X
(Check appropriate box or boxes.)

TWENTIETH CENTURY PREMIUM RESERVES, INC.
(Exact Name of Registrant as Specified in Charter)

Twentieth Century Tower, 4500 Main Street, Kansas City, MO 64111
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code (816) 531-5575

James E. Stowers, Jr.
Twentieth Century Tower, 4500 Main Street, Kansas City, MO 64111
(Name and address of Agent for Service)

Approximate Date of Proposed Public Offering August 1, 1996

It is proposed that this filing will become effective (check appropriate box)
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on August 1, 1996 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on (date) pursuant to paragraph (a) of Rule 485
_____ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
_____ on (date) pursuant to paragraph (a)(2) of Rule 485

The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 notice for the
fiscal year ended March 31, 1996, was filed on May 30, 1996.

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Cross Reference Sheet
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Item No. Page No.
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Part A. Prospectus
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1. Cover Page Cover Page
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2. Synopsis N/A
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3. Condensed Financial Information 5-7
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4. General Description of Registrant Cover Page,
8-16, 31-32
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5. Management of the Fund 30-31
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6. Capital Stock and Other Securities 28-32
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7. Purchase of Securities Being Offered Cover Page,
18-19, 27
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8. Redemption or Repurchase 21-24
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9. Pending Legal Proceedings N/A
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Part B. - Statement of Additional Information
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10. Cover Page Cover Page
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11. Table of Contents Cover Page
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12. General Information and History N/A
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13. Investment Objectives and Policies 3-12
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14. Management of the Fund 12-15
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15. Control Persons and Principal Holders of Securities
16
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16. Investment Advisory and Other Services 13-14
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17. Brokerage Allocation 17-18
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18. Capital Stock and Other Securities 16
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19. Purchase, Redemption and Pricing of Securities Being
Offered 18-19
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20. Tax Status 16
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21. Underwriters N/A
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22. Calculation of Performance Data N/A
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23. Financial Statements 19
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<PAGE>
TWENTIETH CENTURY
PREMIUM RESERVES
PROSPECTUS

AUGUST 1,
1996

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Twentieth Century Premium Reserves, Inc. is a diversified, open-end
management investment company whose shares are offered, without a sales charge,
to substantial investors, particularly institutional and corporate investors.
Twentieth Century currently offers three series of shares.

MONEY MARKET FUNDS

TWENTIETH CENTURY
PREMIUM GOVERNMENT RESERVE

TWENTIETH CENTURY
PREMIUM CAPITAL RESERVE

The objective of each of these money market funds is to obtain as high a
level of current income as is consistent with the preservation of principal and
liquidity within the guidelines established for each fund. INVESTMENTS IN THESE
FUNDS ARE NOT INSURED, NOR ARE THEY GUARANTEED BY THE U.S. GOVERNMENT. WHILE
EACH FUND SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE, THERE
IS NO ASSURANCE THAT IT WILL BE ABLE TO DO SO.

BOND FUND

TWENTIETH CENTURY
PREMIUM MANAGED BOND

This fund seeks a high level of income from investments in a portfolio of
bonds and other debt obligations having a weighted average adjusted duration of
3.5 years or greater.

There is no assurance that the funds will achieve their respective
objectives.

MINIMUM INITIAL INVESTMENT

The minimum initial investment for each of the funds is $100,000.

This prospectus sets forth information about Twentieth Century that
prospective investors should know before investing and should be read carefully
and retained for future reference. A statement of additional information about
Twentieth Century, dated August 1, 1996, which is incorporated herein by
reference, has been filed with the Securities and Exchange Commission. To obtain
a copy without charge, call or write:

Twentieth Century Premium Reserves, Inc.
4500 Main Street o P.O. Box 419200
Kansas City, MO 64141-6200 o 1-800-345-2021
Local and international calls: 816-531-5575
Telecommunications device for the deaf:
1-800-634-4113 o In Missouri: 816-753-1865
Internet: http://www.twentieth-century.com

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

<PAGE>

TABLE OF CONTENTS
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TRANSACTION AND OPERATING
EXPENSE TABLE .................................................. 4
FINANCIAL HIGHLIGHTS ............................................. 5

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS ................................. 8
Twentieth Century Premium
Government Reserve ............................................. 8
Twentieth Century Premium
Capital Reserve ................................................ 9
Twentieth Century Premium
Managed Bond ................................................... 10

FUNDAMENTALS OF FIXED
INCOME INVESTING ............................................... 11

OTHER INVESTMENT POLICIES ........................................ 11
Repurchase Agreements .......................................... 11
Foreign Securities ............................................. 12
Forward Currency Exchange Contracts ............................ 12
Interest Rate Futures Contracts
and Options Thereon .......................................... 13
Derivative Securities .......................................... 14
Portfolio Lending .............................................. 14
Portfolio Turnover ............................................. 15
Rule 144A Securities ........................................... 15
When-Issued Securities ......................................... 16
Investment Company Act Rule 2a-7 ............................... 16

PERFORMANCE ADVERTISING .......................................... 16

HOW TO INVEST WITH TWENTIETH CENTURY

TWENTIETH CENTURY FAMILY OF FUNDS ................................ 18

INVESTING IN TWENTIETH CENTURY ................................... 18

MINIMUM INITIAL INVESTMENT
AND REQUIRED SHARE VALUE ....................................... 18

HOW TO INVEST .................................................... 18
By Wire ........................................................ 18
By Telephone ................................................... 19
By Mail ........................................................ 19
Additional Information About Investments ....................... 19
Taxpayer Identification Number ................................. 19
Certificates ................................................... 20

SPECIAL SHAREHOLDER SERVICES ..................................... 20

HOW TO EXCHANGE YOUR INVESTMENT
FROM ONE TWENTIETH CENTURY
FUND TO ANOTHER ................................................ 20
By Telephone ................................................... 20
By Mail ........................................................ 21
Additional Information About Exchanges ......................... 21

HOW TO REDEEM SHARES ............................................. 21
By Telephone ................................................... 21
By Mail ........................................................ 21
By CheckWriting ................................................ 22
Signature Guarantee .......................................... 23

REDEMPTION PROCEEDS .............................................. 23
By Wire and Electronic Funds Transfer .......................... 23
By Mail ........................................................ 23

ADDITIONAL INFORMATION
ABOUT REDEMPTIONS .............................................. 24

TELEPHONE SERVICES ............................................... 24
Investors Line ................................................. 24
Automated Information Line ..................................... 25

HOW TO CHANGE YOUR ADDRESS OF RECORD ............................. 25

TAX-QUALIFIED RETIREMENT PLANS ................................... 25

HOW TO TRANSFER AN INVESTMENT TO A TWENTIETH
CENTURY RETIREMENT PLAN ........................................ 25

HOW TO TRANSFER YOUR SHARES
TO ANOTHER PERSON .............................................. 25

REPORTS TO SHAREHOLDERS .......................................... 25

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE ...................................................... 27
When Share Price is Determined ................................. 27
How Share Price is Determined .................................. 27
Where to Find Information
About Share Price ............................................ 28

DISTRIBUTIONS .................................................... 28

TAXES ............................................................ 28

MANAGEMENT ....................................................... 30
Investment Management .......................................... 30
Code of Ethics ................................................. 31
Transfer and Administrative Services ........................... 31

FURTHER INFORMATION
ABOUT TWENTIETH CENTURY ........................................ 31

TRANSACTION AND OPERATING EXPENSE TABLE
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SHAREHOLDER TRANSACTION EXPENSES:

Twentieth Century Premium Government Reserve,
Twentieth Century Premium Capital Reserve and
Twentieth Century Premium Managed Bond

Maximum Sales Load Imposed on Purchases................ none
Maximum Sales Load Imposed on Reinvested Dividends..... none
Deferred Sales Load.................................... none
Redemption Fee(1)...................................... none
Exchange Fee........................................... none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):

Management Fees........................................ 0.45%
12b-1 Fees............................................. none
Other Expenses(2)...................................... 0.00%
Total Fund Operating Expenses.......................... 0.45%

Example: You would pay the following expenses on a
$1,000 investment, assuming a 5% annual return and
redemption at the end of each time period:
1 year $5
3 years 14
5 years 25
10 years 57

(1) Redemption proceeds sent by wire transfer are subject to a $10 processing
fee.

(2) Other expenses, the fees and expenses of those directors who are not
"interested persons" as defined in the Investment Company Act, were 0.0013
of 1% of average net assets for the most recent fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in shares of Twentieth Century. The example set
forth above assumes reinvestment of all dividends and distributions and uses a
5% annual rate of return as required by Securities and Exchange Commission
regulations.

NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

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NO PERSON IS AUTHORIZED BY TWENTIETH CENTURY TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY THE COMPANY, AND YOU SHOULD NOT RELY ON ANY OTHER
INFORMATION OR REPRESENTATION.

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FINANCIAL HIGHLIGHTS--
PREMIUM GOVERNMENT RESERVE

(For a Share Outstanding Throughout the Period)

The Financial Highlights for the periods presented have been audited by
Ernst & Young LLP, independent auditors, whose report thereon appears in the
corporation's annual report. That annual report, which is incorporated by
reference into the statement of additional information, contains additional
performance information and will be made available on request and without
charge.

Year ended March 31 1996 1995 1994
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NET ASSET VALUE,
BEGINNING OF PERIOD....................... $ 1.00 $ 1.00 $ 1.00
------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS

Net Investment Income..................... .053 .045 .027

Net Realized and
Unrealized Gains (Losses) on Securities... -- -- --
------ ------ ------
Total from
Investment Operations..................... .053 .045 .027
------ ------ ------
DISTRIBUTIONS

From Net
Investment Income....................... (.053) (.045) (.027)

Total Distributions..................... (.053) (.045) (.027)
------ ------ ------
NET ASSET VALUE,
END OF PERIOD............................. $1.00 $1.00 $1.00
====== ====== ======
TOTAL RETURN............................ 5.49% 4.62% 2.75%

RATIOS/SUPPLEMENTAL DATA

Ratio of Expenses to
Average Net Assets...................... .44% .45% .45%

Ratio of Net Investment Income
to Average Net Assets................... 5.30% 4.84% 2.72%

Portfolio Turnover Rate................. -- -- --

Net Assets, End
of Period (in thousands)................ $26,191 $16,381 $5,459

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FINANCIAL HIGHLIGHTS (CONTINUED)--
PREMIUM CAPITAL RESERVE

Net Investment Income..................... .054 .046 .028

Net Realized and
Unrealized Gains (Losses) on Securities... -- -- --
------ ------ ------
Total from
Investment Operations..................... .054 .046 .028
------ ------ ------
DISTRIBUTIONS

From Net
Investment Income....................... (.054) (.046) (.028)

Total Distributions..................... (.054) (.046) (.028)
------ ------ ------
NET ASSET VALUE,
END OF PERIOD............................. $1.00 $1.00 $1.00
====== ====== ======
TOTAL RETURN............................ 5.58% 4.66% 2.81%

RATIOS/SUPPLEMENTAL DATA

Ratio of Expenses to
Average Net Assets...................... .45% .45% .45%

Ratio of Net Investment Income
to Average Net Assets................... 5.50% 4.76% 2.83%

Portfolio Turnover Rate................. -- -- --

Net Assets, End
of Period (in thousands)................ $133,417 $138,428 $38,823

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FINANCIAL HIGHLIGHTS (CONTINUED)--
PREMIUM MANAGED BOND

Year ended March 31 1996 1995 1994
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NET ASSET VALUE,
BEGINNING OF PERIOD....................... $ 9.46 $ 9.64 $10.00
------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS

Net Investment Income..................... .607 .588 .462

Net Realized and
Unrealized Gains (Losses) on Securities... .470 (.180) (.360)
------ ------ ------
Total from
Investment Operations..................... 1.077 .408 .102
------ ------ ------
DISTRIBUTIONS

From Net
Investment Income....................... (.607) (.588) (.462)

Total Distributions..................... (.607) (.588) (.462)
------ ------ ------
NET ASSET VALUE,
END OF PERIOD............................. $9.93 $9.46 $9.64
====== ====== ======
TOTAL RETURN............................ 11.53% 4.48% .92%

RATIOS/SUPPLEMENTAL DATA

Ratio of Expenses to
Average Net Assets...................... .43% .45% .45%

Ratio of Net Investment Income
to Average Net Assets................... 6.08% 6.30% 4.65%

Portfolio Turnover Rate................. 92% 51% 144%

Net Assets, End
of Period (in thousands)................ $20,280 $10,334 $8,080

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INFORMATION REGARDING THE FUNDS
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INVESTMENT POLICIES
OF THE FUNDS

The investment policies of the funds as described herein are not designated
as fundamental policies and may be changed without shareholder approval.
Twentieth Century has adopted certain investment restrictions that are set forth
in full in the Statement of Additional Information and which, together with the
investment objectives identified on the cover page and any other investment
policies designated as "fundamental" in this prospectus or in the Statement of
Additional Information, cannot be changed without shareholder approval.

For an explanation of the securities ratings referred to in the fund
descriptions below, see "An Explanation of Fixed Income Securities Ratings" in
the Statement of Additional Information.

TWENTIETH CENTURY PREMIUM
GOVERNMENT RESERVE

Twentieth Century Premium Government Reserve ("Premium Government Reserve")
seeks to obtain as high a level of current income as is consistent with
preservation of capital and maintenance of liquidity within the standards of
investment prescribed for such fund. Premium Government Reserve expects, but
cannot guarantee, that it will maintain a constant share price of $1.00 by
purchasing only securities having remaining maturities of not more than 13
months and by maintaining a weighted average portfolio maturity of not more than
90 days.

Premium Government Reserve will invest substantially all of its assets in a
portfolio of U.S. dollar denominated securities issued or guaranteed by the U.S.
government and its agencies and instrumentalities. Specifically, it may invest
in (1) direct obligations of the United States, such as Treasury bills, notes
and bonds, which are supported by the full faith and credit of the United
States, and (2) obligations (including mortgage-related securities) issued or
guaranteed by agencies and instrumentalities of the U.S. government. These
agencies and instrumentalities may include, but are not limited to, the
Government National Mortgage Association, Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation, Student Loan Marketing Association,
Federal Farm Credit Banks, Federal Home Loan Banks, and Resolution Funding
Corporation. The securities of some of these agencies and instrumentalities,
such as the Government National Mortgage Association, are guaranteed as to
principal and interest by the U.S. Treasury, and other securities are supported
by the right of the issuer, such as the Federal Home Loan Banks, to borrow from
the Treasury. Other obligations, including those issued by the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation, are
supported only by the credit of the instrumentality.

Mortgage-related securities that may be purchased are mortgage pass-through
certificates and collateralized mortgage obligations ("CMOs") issued by a U.S.
agency or instrumentality. A mortgage pass-through certificate is a debt
security generally collateralized by a pool of mortgages, while a CMO is a debt
security that is generally collateralized by a portfolio or pool of mortgages or
mortgage-backed securities. With both types of securities, the issuer's
obligation to make interest and principal payments is secured by the underlying
pool or portfolio of mortgages or securities.

The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the U. S. government, is not insured. When interest rates rise,
the market value of those securities may decrease in the same manner as other
debt, but when interest rates decline, their market value may not increase as
much as other debt instruments because of the prepayment feature inherent in the
underlying mortgages. If such securities are purchased at a premium, a fund will
suffer a loss if the obligation is prepaid.

Prepayments will be reinvested at prevailing rates, which may be less than the
rate paid by the prepaid obligation.

For the purpose of determining the weighted average portfolio maturity of a
fund, management shall consider the maturity of a mortgage-related security to
be the remaining expected average life of the security. The average life of such
securities is likely to be substantially less than the original maturity as a
result of prepayments of principal on the underlying mortgages, especially in a
declining interest rate environment. In determining the remaining expected
average life, management makes assumptions regarding prepayments on underlying
mortgages. In a rising interest rate environment, those prepayments generally
decrease, and may decrease below the rate of prepayment assumed by management
when purchasing those securities. Such slowdown may cause the remaining maturity
of those securities to lengthen, which will increase the relative volatility of
those securities and, hence, the fund holding the securities. (See "Fundamentals
of Fixed Income Investing," page 11.)

Premium Government Reserve will invest only in mortgage-related securities
that have a stated final maturity of 397 days or less.

Because of its strict credit and maturity requirements, the level of
current income produced by the fund may not be as high as that produced by funds
that invest in riskier and more speculative securities with longer maturities.
(See "Other Investment Policies--Investment Company Act Rule 2a-7," page 16.)

TWENTIETH CENTURY PREMIUM
CAPITAL RESERVE

Twentieth Century Premium Capital Reserve ("Premium Capital Reserve") seeks
to obtain as high a level of current income as is consistent with preservation
of capital and maintenance of liquidity within the standards of investment
prescribed for such fund. Premium Capital Reserve expects, but cannot guarantee,
that it will maintain a constant share price of $1.00 by purchasing only
securities having remaining maturities of not more than 13 months and by
maintaining a weighted average portfolio maturity of not more than 90 days.

Premium Capital Reserve will invest substantially all of its assets in a
diversified portfolio of U.S. dollar denominated money market instruments.
Specifically, it may invest in the following:

(1) Securities issued or guaranteed by the U.S. government and its agencies
and instrumentalities, as described under "Premium Government Reserve."

(2) Commercial paper.

(3) Short-term notes, bonds, debentures, or other debt instruments.

(4) Certificates of deposit, bankers acceptances and time deposit obligations
of U.S. banks, foreign branches of U.S. banks (Eurodollars), U.S. branches
and agencies of foreign banks (Yankee dollars) and foreign branches of
foreign banks.

With the exception of the obligations of foreign branches of U.S. banks and
U.S. branches of foreign banks, which are limited to 25% of net assets, these
classes of securities may be held in any proportion, and such proportion may
vary as market conditions change.

All portfolio holdings are limited to those that at the time of purchase
have a short-term rating of A-1 by Standard & Poor's Corporation (S&P), or P-1
by Moody's Investors Service, Inc. (Moody's), or if they have no short-term
rating are issued or guaranteed by an entity having a long-term rating of at
least AA by S&P or Aa by Moody's.

Eurodollar and Yankee dollar investments involve risks that are different
from investments in securities of U.S. banks. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, interest limitations or other
governmental restrictions that might affect payment of principal

or interest. Additionally, there may be less public information available about
foreign banks and their branches. Foreign branches of foreign banks are not
regulated by U.S. banking authorities, and generally are not bound by
accounting, auditing and financial reporting standards comparable to U.S. banks.
Although these factors are carefully considered when making investments, there
are no limits on the amount of fund assets which can be invested in any one type
of instrument or in any foreign country.

TWENTIETH CENTURY PREMIUM
MANAGED BOND

Twentieth Century Premium Managed Bond ("Premium Managed Bond") seeks a
high level of income from investment in longer-term bonds and other debt
instruments. It is designed for investors whose primary goal is a level of
income higher than is generally provided by money market or short- and
intermediate-term securities and who can accept the generally greater price
volatility associated with longer-term bonds. Under normal market conditions, at
least 65% of Premium Managed Bond's assets will be invested in bonds. The
balance of the fund's assets will be invested in shorter-term debt securities.

There are no maturity restrictions on the individual securities in which
Premium Managed Bond may invest, but the weighted average adjusted duration of
the fund's securities portfolio must be 3.5 years or greater. Adjusted duration,
which is an indication of the relative sensitivity of a security's market value
to changes in interest rates, is based upon the aggregate of the present value
of all principal and interest payments to be received, discounted at the current
market rate of interest, and expressed in years.

Adjusted duration is different than dollar-weighted average portfolio
maturity in that it attempts to measure the interest rate sensitivity of a
security, as opposed to its expected final maturity. Further, the adjusted
duration of a portfolio will change in response to a change in interest rates,
whereas average maturity may not. Duration is generally shorter than remaining
time to final maturity because it gives weight to periodic interest payments, as
well as the payment of principal at maturity. The longer the duration of a
portfolio, the more sensitive its market value is to interest rate fluctuation.
However, due to factors other than interest rate changes that affect the price
of a specific security, there generally is not an exact correlation between the
price volatility of a security indicated by adjusted duration and the actual
price volatility of a security.

Subject to the aggregate portfolio duration minimum, management will
actively manage the portfolio, adjusting the weighted average portfolio maturity
in response to expected changes in interest rates. During periods of rising
interest rates, a shorter weighted average maturity may be adopted in order to
reduce the effect of bond price declines on the fund's net asset value. When
interest rates are falling and bond prices rising, a longer weighted average
portfolio maturity may be adopted.

To achieve its objective, Premium Managed Bond may invest in a diversified
portfolio of high- and medium-grade debt securities. The fund may invest in
securities which, at the time of purchase, are rated by a nationally recognized
statistical rating organization or, if not rated, are of equivalent investment
quality as determined by management, as follows: short-term notes within the two
highest categories (for example, at least MIG-2 by Moody's or SP-2 by S&P);
corporate, sovereign government, and municipal bonds within the four highest
categories (for example, at least Baa by Moody's or BBB by S&P), although the
fund expects to invest in tax-exempt municipal bonds only when the expected
return on such securities is equal to or greater

than other eligible investments; securities of the U.S. government and its
agencies and instrumentalities (as described under "Premium Government Reserve,"
page 8); and other types of securities rated at least P-2 by Moody's or A-2 by
S&P. There is no limit on the amount of investments that can be made in
securities rated in a particular rating category. According to Moody's, bonds
rated Baa are medium-grade and possess some speculative characteristics. A BBB
rating by S&P indicates S&P's belief that a security exhibits a satisfactory
degree of safety and capacity for repayment, but is more vulnerable to adverse
economic conditions or changing circumstances.

For the purpose of determining adjusted duration, management shall consider
the maturity of a security issued by the Government National Mortgage
Association, or other mortgage-related security, to be the remaining expected
average life of the security. The average life of such securities is likely to
be substantially less than the original maturity as a result of prepayments of
principal of the underlying mortgages.

FUNDAMENTALS OF
FIXED INCOME INVESTING

Over time, the level of interest rates available in the marketplace
changes. As prevailing rates fall, the prices of bonds and other securities that
trade on a yield basis rise. On the other hand, when prevailing interest rates
rise, bond prices fall.

Generally, the longer the maturity of a debt security, the higher its yield
and the greater its price volatility. Conversely, the shorter the maturity, the
lower the yield but the greater the price stability.

These factors operating in the marketplace have a similar impact on bond
portfolios. A change in the level of interest rates causes the net asset value
per share of any bond fund, except money market funds, to change. If sustained
over time, it would also have the impact of raising or lowering the yield of the
fund.

In addition to the risk arising from fluctuating interest rate levels, debt
securities are subject to credit risk. When a security is purchased, its
anticipated yield is dependent on the timely payment by the borrower of each
interest and principal installment. Credit analysis and resultant bond ratings
take into account the relative likelihood that such timely payment will occur.
As a result, lower-rated bonds tend to sell at higher yield levels than
top-rated bonds of similar maturity. In addition, as economic, political and
business developments unfold, lower-quality bonds, which possess lower levels of
protection with regard to timely payment, usually exhibit more price fluctuation
than do higher-quality bonds of like maturity.

The investment practices of all fixed income funds involve these
relationships. The maturity and credit quality of each fund have implications
for the degree of price volatility and the yield level to be expected from each.

OTHER INVESTMENT POLICIES

REPURCHASE AGREEMENTS

Each of the Twentieth Century Premium Reserves funds may enter into
repurchase agreements when such transactions present an attractive short-term
return on cash that is not otherwise committed to the purchase of securities
pursuant to the funds' investment policies.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer) agrees to
repurchase it on a specified date in the future at an agreed-upon price. The
repurchase price reflects an agreed-upon interest rate during the time the
fund's money is invested in the security. The fund's risk is the ability of the
seller to pay the agreed-upon repurchase price on the repurchase date. In the
opinion of management, the risk is minimal because the security purchased
constitutes security for the repurchase obligation, and repurchase

agreements can be considered as loans collateralized by the security purchased.
However, the fund may incur costs in disposing of the collateral, which would
reduce the amount realized thereon. If the seller seeks relief under the
bankruptcy laws, the disposition of the collateral may be delayed or limited. To
the extent the value of the security decreases, the fund could experience a
loss.

Each of the Twentieth Century Premium Reserves funds may invest in
repurchase agreements with respect to any security in which that fund is
authorized to invest, even if the remaining maturity of the underlying security
would make that security ineligible for purchase by such fund. No fund will
invest more than 10% of its assets in repurchase agreements maturing in more
than seven days.

A fund will enter into repurchase agreements only with those commercial
banks and broker-dealers whose creditworthiness has been reviewed and found
satisfactory by the fund's management pursuant to criteria adopted by the fund's
board of directors.

FOREIGN SECURITIES

Premium Capital Reserve and Premium Managed Bond may each invest an
unlimited amount of their assets in the debt securities of those foreign issuers
whose principal business activities are in developed countries when these
securities meet their respective standards of selection, including credit
quality. Securities of foreign issuers may trade in the U.S. or foreign
securities markets.

Investments in foreign securities may present certain risks, including
those resulting from fluctuations in currency exchange rates, future political
and economic developments, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to domestic issuers.

FORWARD CURRENCY
EXCHANGE CONTRACTS

Some of the securities held by Premium Managed Bond may be denominated in
foreign currencies. As a result, the value of the portfolio may be affected by
changes in the exchange rate between foreign currencies and the dollar, as well
as by changes in the market value of the securities themselves. The performance
of foreign currencies relative to the dollar may be an important factor in the
fund's overall performance.

To protect against adverse movements in exchange rates between currencies,
the fund may, for hedging purposes only, enter into forward currency exchange
contracts. A forward currency exchange contract obligates the fund to purchase
or sell a specific currency at a future date at a specific price.

The fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.

By entering into a forward currency exchange contract with respect to the
specific purchase or sale of a security denominated in a foreign currency, the
fund can "lock in" an exchange rate between the trade and settlement dates for
that purchase or sale. This practice is sometimes referred to as "transaction
hedging." The fund may enter into transaction hedging contracts with respect to
all or a substantial portion of its trades.

When the manager believes that a particular currency may decline in value
compared to the dollar, the fund may enter into a forward currency exchange
contract to sell an amount of foreign currency equal to the value of some or all
of the fund's portfolio securities denominated in that currency. This practice
is sometimes referred to as "portfolio hedging." The fund may not enter into a
portfolio hedging transaction where the fund would be obligated to deliver an
amount of foreign currency in excess of the aggregate value of the fund's
portfolio securities or other assets denominated in that currency.

The fund will make use of portfolio hedging to the extent deemed
appropriate by the manager. However, it is anticipated that the fund will enter
into portfolio hedges much less frequently than transaction hedges.

If the fund enters into a forward contract, the fund, when required, will
instruct its custodian bank to segregate cash or liquid high-grade securities in
a separate account in an amount sufficient to cover its obligation under the
contract. Those assets will be valued at market daily, and if the value of the
segregated securities declines, additional cash or securities will be added so
that the value of the account is not less than the amount of the fund's
commitment.

Predicting the relative future values of currencies is very difficult, and
there is no assurance that any attempt to protect the fund against adverse
currency movements through the use of forward currency exchange contracts will
be successful. In addition, the use of forward currency exchange contracts tends
to limit the potential gains that might result from a positive change in the
relationship between the foreign currency and the U.S. dollar.

INTEREST RATE FUTURES CONTRACTS
AND OPTIONS THEREON

For options sold, the fund will segregate cash or high-quality debt
securities equal to the value of securities underlying the option unless the
option is otherwise covered.

A fund will deposit in a segregated account with its custodian bank
high-quality debt obligations maturing in one year or less, or cash, in an
amount equal to the fluctuating market value of long futures contracts it has
purchased, less any margin deposited on its long position. It may hold cash or
acquire such debt obligations for the purpose of making these deposits.

The fund will purchase or sell futures contracts and options thereon only
for the purpose of hedging against changes in the market value of its portfolio
securities or changes in the market value of securities that it may wish to
include in its portfolio. The fund will enter into futures and option
transactions only to the extent that the sum of the amount of margin deposits on
its existing futures positions and premiums paid for related options does not
exceed 5% of its assets.

Since futures contracts and options thereon can replicate movements in the
cash markets for the securities in which a fund invests without the large cash
investments required for dealing in such markets, they may subject a fund to
greater and more volatile risks than might otherwise be the case. The principal
risks related to the use of such instruments are: (1) the correlation between
movements in the market price of the portfolio investments (held or intended)
being hedged and in the price of the offsetting futures contract or option may
be imperfect; (2) the possible lack of a liquid secondary market for closing out
futures or option positions; (3) the need for additional portfolio management
skills and techniques; and (4) losses due to unanticipated market price
movements. For a hedge to be completely effective, the price change of the
hedging instrument should equal the price change of the securities being hedged.
Such equal price changes are not always possible because the investment
underlying the hedging instrument may not be the same investment that is being
hedged. The manager will attempt to create a closely correlated hedge but
hedging activity may not be completely successful in eliminating market value
fluctuation. The ordinary spreads between prices in the cash and futures
markets, due to the differences in the natures of those markets, are subject to
distortion. Due to the possibility of distortion, a correct forecast of general
interest rate trends by the

manager may still not result in a successful transaction. The manager may be
incorrect in its expectations as to the extent of interest rate movements or the
time span within which the movements take place.

Additional information concerning interest rate futures contracts and
options thereon and the risks associated with these instruments may be found in
the Statement of Additional Information.

DERIVATIVE SECURITIES

To the extent permitted by its investment objectives and policies, each of
the funds may invest in securities that are commonly referred to as "derivative"
securities. Generally, a derivative is a financial arrangement the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. Certain derivative securities are more accurately described as
"index/structured" securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators ("reference indices").

Some "derivatives" such as mortgage-related and other asset-backed
securities are in many respects like any other investment, although they may be
more volatile or less liquid than more traditional debt securities.

There are many different types of derivatives and many different ways to
use them. Futures and options are commonly used for traditional hedging purposes
to attempt to protect a fund from exposure to changing interest rates,
securities prices, or currency exchange rates and for cash management purposes
as a low-cost method of gaining exposure to a particular securities market
without investing directly in those securities.

No fund may invest in a derivative security unless the reference index or
the instrument to which it relates is an eligible investment for the fund. For
example, a bond whose interest rate is indexed to the return on two year
treasury securities would be a permissible investment (assuming it otherwise
meets the other requirements for the funds), while a security whose underlying
value is linked to the price of oil would not be a permissible investment since
the funds may not invest in oil and gas leases or futures.

The return on a derivative security may increase or decrease, depending
upon changes in the reference index or instrument to which it relates.

There are a range of risks associated with derivative investments,
including:

o the risk that the underlying security, interest rate, market index or
other financial asset will not move in the direction the portfolio
manager anticipates;

o the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a
position when desired;

o the risk that adverse price movements in an instrument can result in a
loss substantially greater than a fund's initial investment; and

o the risk that the counterparty will fail to perform its obligations.

The board of directors has approved the manager's policy regarding
investments in derivative securities. That policy specifies factors that must be
considered in connection with a purchase of derivative securities. The policy
also establishes a committee that must review certain proposed purchases before
the purchases can be made. The manager will report on fund activity in
derivative securities to the board of directors as necessary. In addition, the
board will review the manager's policy for investments in derivative securities
annually.

PORTFOLIO LENDING

In order to realize additional income, each of the funds may lend its
portfolio securities to persons not affiliated with it and who are deemed

to be creditworthy. Such loans must be secured continuously by cash collateral
maintained on a current basis in an amount at least equal to the market value of
the securities loaned, or by irrevocable letters of credit. During the existence
of the loan, the fund must continue to receive the equivalent of the interest
and dividends paid by the issuer on the securities loaned and interest on the
investment of the collateral. The fund must have the right to call the loan and
obtain the securities loaned at any time on five days' notice, including the
right to call the loan to enable the fund to vote the securities, if applicable.
Such loans may not exceed one-third of the fund's net assets valued at market.

PORTFOLIO TURNOVER

The portfolio turnover rate of Premium Managed Bond is shown in the
Financial Highlights table on page 5 of this prospectus.

In order to achieve the investment objectives of the funds, the manager
will purchase and sell securities for the funds without regard to the length of
time the security has been held and, accordingly, it can be expected that the
rate of portfolio turnover for each fund may be substantial.

Each fund intends to purchase a given security whenever management believes
it will contribute to the stated objective of the fund, even if the same
security has only recently been sold. In selling a given security, management
keeps in mind that (1) profits from sales of securities held less than three
months must be limited in order to meet the requirements of Subchapter M of the
Internal Revenue Code, and (2) profits from sales of securities may be taxed to
shareholders as ordinary income. Subject to those considerations, a fund will
sell a given security, no matter for how long or for how short a period it has
been held in the portfolio and no matter whether the sale is at a gain or at a
loss, if the manager believes that such security is not fulfilling its purpose.

Since investment decisions are based on the anticipated contribution of the
security in question to a fund's objectives, the rate of portfolio turnover is
irrelevant when the manager believes a change is in order to achieve those
objectives. Accordingly, a fund's annual portfolio turnover rate cannot be
anticipated and may be comparatively high.

Since the manager does not take portfolio turnover rate into account in
making investment decisions, (1) the manager has no intention of accomplishing
any particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates should not be considered as a representation of the
rates that will be attained in the future.

The portfolio turnover of each of the funds may be higher than some other
mutual funds with similar investment objectives. Higher turnover would generate
correspondingly greater trading expenses, which is a cost that each fund pays
directly.

RULE 144A SECURITIES

The funds may, from time to time, purchase Rule 144A securities when they
present attractive investment opportunities that otherwise meet Twentieth
Century's criteria for selection. Rule 144A securities are securities that are
privately placed with and traded among qualified institutional buyers rather
than the general public. Although Rule 144A securities are considered
"restricted securities," they are not necessarily illiquid.

With respect to securities eligible for resale under Rule 144A, the staff
of the Securities and Exchange Commission has taken the position that the
liquidity of such securities in the portfolio of a fund offering redeemable
securities is a question of fact for the board of directors to determine, such
determination to be based upon a consideration of the readily available trading
markets and the review of any contractual restrictions. Accordingly, the board
of directors is responsible for developing and establishing the guidelines and
procedures for determining the liquidity of Rule 144A securities. As allowed by
Rule 144A, the board of directors of Twentieth

Century has delegated the day-to-day function of determining the liquidity of
Rule 144A securities to the manager. The board retains the responsibility to
monitor the implementation of the guidelines and procedures it has adopted.

Since the secondary market for such securities is limited to certain
qualified institutional investors, the liquidity of such securities may be
limited accordingly and a fund may, from time to time, hold a Rule 144A security
that is illiquid. In such an event, Twentieth Century will consider appropriate
remedies to minimize the effect on such fund's liquidity. Premium Government
Reserve and Premium Capital Reserve may invest up to 10% of their respective
assets in illiquid securities (securities that may not be sold within seven days
at approximately the price used in determining the net asset value of fund
shares), while Premium Managed Bond may invest up to 15% of its assets in such
securities.

WHEN-ISSUED SECURITIES

The funds may purchase new issues of securities on a when-issued basis
without limit when, in the opinion of management, such purchases will further
the investment objectives of the funds. The price of when-issued securities is
established at the time the commitment to purchase is made. Delivery of and
payment for these securities typically occur 15 to 45 days after the commitment
to purchase. Market rates of interest on debt securities at the time of delivery
may be higher or lower than those contracted for on the when-issued security.
Accordingly, the value of such securities may decline prior to delivery, which
could result in a loss to a fund. A separate account for each fund consisting of
cash or high-quality liquid debt securities in an amount at least equal to the
when-issued commitments will be established and maintained with the custodian.
No income will accrue to the fund prior to delivery.

INVESTMENT COMPANY ACT RULE 2A-7

Premium Government Reserve and Premium Capital Reserve each operate
pursuant to Rule 2a-7 under the Investment Company Act of 1940. That Rule
permits valuation of portfolio securities on the basis of amortized cost. To
rely on the Rule, each fund must be diversified with regard to 100% of its
assets other than U.S. government securities. This operating policy is more
restrictive than the Investment Company Act, which requires a diversified
investment company to be diversified with regard to only 75% of its assets. A
fundamental policy, changeable only by shareholder vote, applicable to each fund
would require only 75% of each fund's assets to be diversified. However, because
of the restriction contained in Rule 2a-7, the fundamental policy would give
each fund the ability to invest, with respect to 25% of each fund's assets, more
than 5% of its assets in any one issuer only in the event that Rule 2a-7 is
amended in the future.

PERFORMANCE ADVERTISING

From time to time, Twentieth Century may advertise performance data. Fund
performance may be shown by presenting one or more performance measurements,
including cumulative total return or average annual total return, yield and
effective yield.

Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced a fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.

A quotation of yield reflects a fund's income over a stated period
expressed as a percentage of the fund's share price. In the case of Premium
Government Reserve and Premium Capital

Reserve, yield is calculated by measuring the income generated by an investment
in the fund over a seven-day period (net of fund expenses). This income is then
"annualized." That is, the amount of income generated by the investment over the
seven-day period is assumed to be generated over each similar period each week
throughout a full year and is shown as a percentage of the investment. The
"effective yield" is calculated in a similar manner but, when annualized, the
income earned by the investment is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of the
assumed reinvestment.

With respect to Premium Managed Bond, yield is calculated by adding over a
30-day (or one-month) period all interest and dividend income (net of fund
expenses) calculated on each day's market values, dividing this sum by the
average number of fund shares outstanding during the period, and expressing the
result as a percentage of the fund's share price on the last day of the 30-day
(or one-month) period. The percentage is then annualized. Capital gains and
losses are not included in the calculation.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules for all stock and bond funds. Because yield
accounting methods differ from the methods used for other accounting purposes, a
fund's yield may not equal the income paid on your shares or the income reported
in a fund's financial statements.

The funds may also include in advertisements data comparing performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such as
Lipper Analytical Services or Donoghue's Money Fund Report) and publications
that monitor the performance of mutual funds. Performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
In addition, fund performance may be compared to well-known indices of market
performance including the Lehman Brothers Government Corporate Index, the
Salomon Bond Index, Donoghue's Money Fund Average and the Bank Rate Monitor
National Index of 2 1/2 -year CD rates. Fund performance may also be compared to
other funds in the Twentieth Century family. It may also be combined or blended
with other funds in the Twentieth Century family, and that combined or blended
performance may be compared to the same indices to which individual funds may be
compared.

All performance information advertised by the funds is historical in nature
and is not intended to represent or guarantee future results. The value of the
fund shares when redeemed may be more or less than their original cost.

HOW TO INVEST WITH TWENTIETH CENTURY
- --------------------------------------------------------------------------------

TWENTIETH CENTURY
FAMILY OF FUNDS

In addition to the three funds offered by this prospectus, the Twentieth
Century family of funds also includes the funds offered by Twentieth Century
Investors, Inc., Twentieth Century World Investors, Inc., Twentieth Century
Capital Portfolios, Inc., and Twentieth Century Strategic Asset Allocations,
Inc. Please call the Investors Line for a prospectus and additional information
about the other funds in the Twentieth Century family of funds.

The Twentieth Century family of mutual funds now also includes the funds
offered by The Benham Group as a result of the acquisition of Benham Management
Corporation, investment manager of The Benham Group, by Twentieth Century
Companies, Inc. The Benham Group offers several funds with investment objectives
similar to the Twentieth Century funds, but with different fee structures. You
may also wish to consider the funds of The Benham Group for your investment
needs. For a prospectus and more information about those funds, please call
1-800-331-8331.

INVESTING IN TWENTIETH CENTURY

Shares of each fund are offered continuously and may be purchased at the
net asset value next determined after an order is received and accepted.
Twentieth Century may discontinue offering shares generally in any fund or in
any particular state without notice to shareholders.

MINIMUM INITIAL INVESTMENT
AND REQUIRED SHARE VALUE

Except as noted below, the minimum initial investment to establish a new
account in each fund is $100,000. Subsequent investments must be in an amount of
at least $50*. To keep an account open, a minimum share value of $100,000 in a
fund must be maintained. If the share value of an account falls below $100,000
due to redemption or exchange, each fund reserves the right to close the account
and either send a check for the amount of the redemption to the address of
record or wire the proceeds to the bank account of record. An investor will be
notified if the minimum required share value is not being maintained and will be
allowed 90 days to make additional investments before the account is closed.

In order to accommodate the transfer of assets by plan trustees from other
investment options, multi-participant employee retirement plans converting
investments to Twentieth Century will be allowed 90 days to meet the minimum
initial investment requirement. In addition, each fund reserves the right to
make other exceptions to the minimum initial purchase and minimum required share
value from time to time.

* [THIS REQUIREMENT DOES NOT APPLY TO INDIVIDUAL RETIREMENT ACCOUNTS,
403(B) ACCOUNTS AND OTHER TYPES OF TAX-DEFERRED RETIREMENT PLAN ACCOUNTS.]

HOW TO INVEST

An initial investment in a fund must be preceded or accompanied by a
properly completed, signed application. To be properly completed, an application
must contain a certified taxpayer identification number. A properly completed
application must be on file prior to making a redemption from an account.

You may invest in the following ways:

BY WIRE

After mailing your completed application to Twentieth Century, you may make
your initial or subsequent investments in Twentieth Century by wiring funds. To
do so:

(1) Instruct your bank to wire funds to Commerce Bank of Kansas City,
Missouri. ABA routing number 10100019.

(2) BE SURE TO SPECIFY ON THE WIRE:

(A) TWENTIETH CENTURY PREMIUM RESERVES, INC.

(B) THE FUND YOU ARE BUYING AND ACCOUNT NUMBER.
(C) YOUR NAME.
(D) YOUR CITY AND STATE.
(E) YOUR TAXPAYER IDENTIFICATION NUMBER.

Wired funds are considered received on the day they are deposited in
Twentieth Century's account if they are deposited before the close of business
on the New York Stock Exchange (NYSE), usually 3 p.m. Central time.

BY TELEPHONE

Once your account is open, you may make investments by telephone if you
have elected the service authorizing Twentieth Century to draw on your bank
account when you call with instructions. Investments made by phone in any one
account must be in an amount of at least $50 and are effective at the time of
your call.

BY MAIL

Send your application and check or money order to Twentieth Century. Checks
must be payable in U.S. dollars.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment. If the
remittance portion is not available, indicate on your check or a separate piece
of paper your name, address and account number.

ADDITIONAL INFORMATION
ABOUT INVESTMENTS

To allow the manager to manage the funds effectively and protect the
performance of the funds, investors are strongly urged (but not required) to
initiate all trades (investments, exchanges or redemptions of shares) as early
in the day as possible and to notify Twentieth Century at least one day in
advance of transactions in excess of $1 million. To protect each fund's
performance and the shareholders, the manager discourages frequent trading in
response to short-term market fluctuations. In addition, exchanges from any
Premium Managed Bond account are limited to six times per calendar year. (See
"How to Exchange Your Investment From One Twentieth Century Fund to Another,"
page 20.)

Twentieth Century cannot accept investments specifying a certain price,
date or number of shares and will return these investments.

Once an investment instruction is mailed or otherwise transmitted to
Twentieth Century, it may not be modified or canceled.

An automatic monthly investment program is available for each of the funds.
Please call the Investors Line for further information.

Each fund reserves the right to suspend the offering of shares for a period
of time, and each fund reserves the right to reject any specific purchase order
including purchases by exchange or conversion. Additionally, purchases may be
refused if, in the opinion of the manager, they are of a size that would disrupt
the management of the funds.

TAXPAYER IDENTIFICATION NUMBER

You must furnish Twentieth Century with your taxpayer identification number
and state whether or not you are subject to withholding for prior
under-reporting, certified under penalties of perjury as prescribed by the
Internal Revenue Code and Regulations. Unless previously furnished, investments
received without such certifications will be returned. Instructions to exchange
or transfer shares held in established accounts will be refused unless the
certifications have been provided, and redemption of such shares will be subject
to federal tax withholding at the rate of 31%. In addition, redemption proceeds
will be reduced by $50 to reimburse Twentieth Century for the penalty that the
IRS will impose on the company for failure to report your tax identification
number on information reports. Please avoid these penalties by correctly
furnishing your tax identification number.

CERTIFICATES

At your written request, Twentieth Century will issue negotiable stock
certificates. Unless your shares are purchased with wired funds, a certificate
will not be issued until 15 days have elapsed from the time of purchase or
Twentieth Century has satisfactory proof of payment, such as a copy of your
canceled check.

SPECIAL SHAREHOLDER SERVICES

You may establish one or more special services designed to provide an easy
way to do business with Twentieth Century. By electing these services on your
application or by completing the appropriate forms, you may authorize:

o Investments by phone.
o Automatic investments.
o Exchanges and redemptions by phone.
o Exchanges and redemptions in writing signed by any one registered owner.
o Redemptions without a signature guarantee.
o Transmission of redemption proceeds by wire or electronic funds transfer.

An election to establish any of the above services, except automatic
investments, will also apply to all existing or future accounts in any of the
funds in the Twentieth Century family of funds listed under the same social
security number or employer identification number.

With regard to the service that enables you to exchange and redeem by phone
or in writing signed by only one registered owner and with respect to
redemptions, without a signature guarantee, Twentieth Century, its transfer
agent and investment adviser will not be responsible for any loss for
instructions that they reasonably believe are genuine. Twentieth Century intends
to employ reasonable procedures to confirm that instructions received by
Twentieth Century for your account in fact are genuine. Such procedures will
include requiring personal information to verify the identity of callers,
providing written confirmations of transactions, and recording telephone calls.
If Twentieth Century does not employ reasonable procedures to confirm the
genuineness of instructions, then Twentieth Century may be liable for losses due
to unauthorized or fraudulent instructions.

HOW TO EXCHANGE YOUR
INVESTMENT FROM ONE
TWENTIETH CENTURY
FUND TO ANOTHER

Subject to any applicable minimum initial investment requirements, you may
exchange your investment from the shares of one Twentieth Century Premium
Reserves fund to shares of any of the other funds (except Giftrust Investors) in
the Twentieth Century family of funds. Please call the Investors Line for a
prospectus and additional information about the other funds in the Twentieth
Century family of funds.

Exchanges from any Premium Managed Bond account are limited to six times in
any one calendar year. There are no limitations on the number of exchanges that
can be made from Premium Government Reserve and Premium Capital Reserve
accounts.

Subject to the minimum initial investment requirement, shares of the
Premium Reserves funds also may be received in exchange for shares of the other
funds (except Giftrust Investors) in the Twentieth Century family of funds.

Except as noted, the shares being exchanged and the shares of each fund
being acquired must have a current minimum value of $100.

The exchange privilege is not designed to afford shareholders a way to play
short-term swings in the market. Twentieth Century is not suitable for that
purpose.

BY TELEPHONE

You may exchange your shares by phone if you have authorized Twentieth
Century to accept telephone instructions.

BY MAIL

You may direct Twentieth Century in writing to exchange your shares.

If you have authorized Twentieth Century to accept written instructions
from any one registered owner, and if the shares are owned by two or more
persons, only one signature is required on your written exchange request.
Otherwise, the request must be signed by each person in whose name the shares
are registered. All signatures should be exactly as the name appears in the
registration.

ADDITIONAL INFORMATION
ABOUT EXCHANGES

(1) Subject to the minimum initial investment requirement, in an exchange
from one account to another account, the shares being sold and the new
shares being purchased must have a current value of at least $100.

(2) Shares may be exchanged only if the shares being acquired are qualified
for sale in your state of residence.

(3) The six exchanges per calendar year limitation discussed above with regard
to Premium Managed Bond accounts does not apply to shares held in 403(b)
accounts or to certain pooled accounts owned by institutional investors.

(4) If the shares are represented by a negotiable stock certificate, the
certificate must be returned before the exchange can be effected.

(5) Once you have telephoned or mailed your exchange request, it is irrevocable
and may not be modified or canceled.

(6) For the purpose of processing exchanges, the value of the shares
surrendered and the value of the shares acquired are the net asset values
of such shares next computed after receipt of your exchange order.

(7) Shares may not be exchanged unless you have furnished Twentieth Century
with your taxpayer identification number, certified as prescribed by the
Internal Revenue Code and Regulations.

(8) Exchange of shares is, for federal income tax purposes, a sale of the
shares, on which you may realize taxable gain or loss.

(9) If the request is made by a corporation, partnership, trust, fiduciary,
agent or unincorporated association, Twentieth Century will require
evidence satisfactory to it of the authority of the individual signing the
request.

HOW TO REDEEM SHARES

Shareholders may redeem all or any part of the value of their account(s) on
any business day.

All requests to redeem shares having a value of $25,000 or more, the
proceeds of which are to be paid by check, made within 30 days of our receipt of
an address change (including requests to redeem that accompany an address
change) must be in writing. Additionally, the request must be signed by each
person in whose name the shares are owned, and all signatures must be
guaranteed.

BY TELEPHONE

If you have authorized Twentieth Century to accept telephone instructions,
you may redeem your shares by telephone. Once made, your telephone request may
not be modified or canceled.

If you call before the close of the NYSE, usually 3 p.m. Central time, you
will receive that day's closing price.

BY MAIL

Your written instructions to redeem shares may be in any one of the
following forms:

o A redemption form, available from Twentieth Century.
o A letter to Twentieth Century.
o An assignment form or stock power.
o An endorsement on the back of your negotiable stock certificate, if you
have one.

Once mailed to Twentieth Century, the redemption request is irrevocable and
may not be modified or canceled.

If you have authorized Twentieth Century to accept written instructions
from any one registered owner without a signature guarantee, only one signature
is required on your written redemption request and it need not be guaranteed.

If you have not elected this special service, all signatures must be
guaranteed. (See "Signature Guarantee," page 23.) The request must be signed by
each person in whose name the shares are registered; for example, in the case of
joint ownership, each owner must sign. All signatures should be exactly as the
name appears in the registration.

BY CHECKWRITING

You may redeem shares from any of your Premium Reserves fund accounts by
writing a draft ("check") against your account balance. (Shares held in
certificate form may not be redeemed by check). There is no limit on the number
of checks you can write, but they must be for at least $100. Checks can be drawn
to the order of any payee.

Checks will clear through our designated agent bank (the "Bank"). When
checks are presented, Twentieth Century will redeem a sufficient number of
shares from your account to pay the check amount. The shares will be redeemed at
the net asset value determined for such shares on the date the check is
presented for payment at the Bank. (See "Share Price," page 27.) You will
receive confirmation of each CheckWriting redemption. Canceled checks will not
be returned to you; however, Twentieth Century will retain microfilmed copies of
canceled checks for your emergency needs and will provide a copy upon written
request.

You will continue to receive dividends on all shares until your check is
presented to the Bank for payment. If you redeem all shares in your account by
check, any accrued distributions on the redeemed shares will be paid to you in
cash on the next monthly distribution date.

If you want to add CheckWriting to an existing account, contact Twentieth
Century by phone or mail for an appropriate form. For a new account, you may
elect CheckWriting on your purchase application. You will receive an initial
supply of checks usually within 14 days after your account has been established
and your completed signature card is on file with Twentieth Century.
CheckWriting is established by account, so you will receive a separate supply of
checks for each account on which you have established CheckWriting. CheckWriting
is not available for any account held in a Twentieth Century-sponsored IRA or
403(b) plan.

CheckWriting redemptions may only be made on checks provided by Twentieth
Century. Currently, there is no charge for checks or for the CheckWriting
service. However, Twentieth Century reserves the right to change, modify or
terminate the CheckWriting service at any time.

Checks must be signed in accordance with the instructions you furnished on
your signature card. In all situations, including joint accounts, only one
signature is necessary unless you indicated otherwise on the card. Twentieth
Century will return checks that do not carry all required signatures or that
contain other irregularities.

Twentieth Century also will return checks drawn on insufficient funds or on
funds from investments made by any means other than by wire within the previous
15 days (unless Twentieth Century has previously received proof that any
investment check or draft has been finally paid). Neither Twentieth Century nor
the Bank will be liable for any loss or expenses associated with returned
checks.

You may request a stop payment on any check and Twentieth Century will
attempt to carry out your request. Twentieth Century cannot guarantee that such
efforts will be effective.

SIGNATURE GUARANTEE

When a signature guarantee is required, each signature MUST be guaranteed
by a domestic bank or trust company, credit union, broker, dealer, national
securities exchange, registered securities association, clearing agency or
savings association as defined by federal law. The institution providing the
guarantee must use a signature guarantee ink stamp or medallion that states
"Signature(s) Guaranteed" and be signed in the name of the guarantor by an
authorized person with that person's title and the date. Twentieth Century may
reject a signature guarantee if the guarantor is not a member of or participant
in a signature guarantee program.

Shareholders living abroad may acknowledge their signatures before a U.S.
consular officer. Military personnel may acknowledge their signatures before
officers authorized to take acknowledgements; e.g., legal officers and
adjutants.

Twentieth Century may waive the signature guarantee on a redemption of
$25,000 or less if it is able to verify the signatures of all registered owners
from its account records. Twentieth Century reserves the right to amend or
discontinue this waiver policy at any time and, with regard to a particular
redemption transaction, to require a signature guarantee at its discretion.

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in the following ways:

BY WIRE AND ELECTRONIC
FUNDS TRANSFER

You may authorize Twentieth Century to transmit redemption proceeds by wire
or electronic funds transfer. These services will be effective 15 days after
Twentieth Century receives the authorization.

Proceeds from the redemption of shares will normally be transmitted on the
first business day, but not later than the seventh day, following the
redemption.

Your bank usually will receive wired funds the day they are transmitted or
the next day. Electronically transferred funds will ordinarily be received
within one to seven days after transmission. Once the funds are transmitted, the
time of receipt and the availability of the funds are not within Twentieth
Century's control. Wired funds are subject to a charge of $10 to cover bank wire
charges, which is deducted from redemption proceeds.

If your bank account changes, you must send a new "voided" check,
preprinted with the bank registration, with written instructions, including tax
identification number. The change will be effective 15 days after receipt by
Twentieth Century.

Redemption proceeds will be transmitted by wire or electronic funds
transfer only after Twentieth Century is satisfied that checks or electronic
drafts that paid for the shares have cleared, i.e., after 15 days have elapsed
from the time of purchase, or you have furnished Twentieth Century with
satisfactory proof that the purchase funds have cleared. If a purchase was made
by check, for example, a copy of the canceled check would be satisfactory proof.
No interest is paid on the redemption proceeds after the redemption and before
the funds are transmitted. If you anticipate redemption within 15 days after you
purchase shares, you are advised to wire funds to pay for your purchases to
avoid delay.

BY MAIL

If your redemption check is mailed, it is usually mailed on the second
business day after receipt of your redemption request, but not later than seven
days afterwards. When a redemption occurs shortly after a recent purchase made
by check or electronic draft, Twentieth Century may hold the redemption proceeds
beyond seven days but only until the purchase funds have cleared, which may take
up to 15 days or more.

No interest is paid on the redemption proceeds after the redemption is processed
but before your redemption check is mailed. If you anticipate redemptions soon
after you purchase your shares, you are advised to wire funds to avoid delay.

Except for a direct transfer of proceeds from an IRA or 403(b) to a
custodian of another IRA or 403(b), and as noted below, all checks will be made
payable to the registered owner of the shares and will be mailed only to the
ADDRESS OF RECORD.

If you would like a redemption check made payable to someone other than the
registered owner of the shares and/or mailed to an address other than the
address of record, your request to redeem must (1) be made in writing; (2)
include an instruction to make the check payable to someone other than the
registered owner of the shares and/or mail it to an address other than the
address of record; and (3) be signed by all registered owners with their
signatures guaranteed. Redemptions from UGMA/UTMA accounts and from certain
types of retirement accounts, such as IRA, 403(b) and qualified retirement
accounts, will not be eligible for this special service. If you would like to
use this special service but are not certain that a redemption from your account
is eligible, please call Twentieth Century prior to submitting your request.

ADDITIONAL INFORMATION
ABOUT REDEMPTIONS

If you experience difficulty in making a telephone redemption during
periods of drastic economic or market changes, your redemption request may be
made by regular or express mail. It will be implemented at the net asset value
next determined after your request has been received by Twentieth Century in
good order.

Twentieth Century reserves the right to revise or terminate the telephone
redemption privilege at any time.

While Twentieth Century expects that, under normal conditions, all
redemptions will be paid in cash, if the manager determines that it would be
detrimental to the best interests of a fund's remaining shareholders to make
payment in cash, that fund may pay redemption proceeds in amounts in excess of
$250,000 in whole or in part by a distribution in kind of readily marketable
securities. For further information, see "Redemptions in Kind" in the Statement
of Additional Information.

Redemptions specifying a certain date or price cannot be accepted and will
be returned.

If the shares to be redeemed are represented by a negotiable stock
certificate, the certificate must be returned before the redemption can be
effected.

All redemptions are made and the price is determined on the day when all
documentation, properly completed, is received by Twentieth Century.

If the request to redeem is made by a corporation, partnership, trust,
fiduciary, agent, or unincorporated association, Twentieth Century will require
evidence satisfactory to it of the authority of the individual signing the
request. Please call or write Twentieth Century for further information.

A request to redeem shares in an IRA or 403(b) plan must be accompanied by
an IRS Form W4-P and a reason for withdrawal as specified by the IRS.

TELEPHONE SERVICES

INVESTORS LINE

You may reach a Twentieth Century Investor Services Representative by
calling our Investors Line at 1-800-345-2021. On our Investors Line you may
request information about our funds and a current prospectus, speak with an
Investor Services Representative about your account, or get answers to any
question that you may have about the funds and the services we offer. In
addition, if you have authorized telephone transactions in your account, you may
have an Investor Services Representative help you with investment, exchange and
redemption transactions.

Unusual stock market conditions have in the past resulted in an increase in
the number of shareholder telephone calls. If you experience difficulty in
reaching Twentieth Century on the Investors Line during such periods, you should
consider sending your transaction instructions by mail, express mail or courier
service, or by using our Automated Information Line, if you have requested and
received an access code and are not attempting to redeem shares.

AUTOMATED INFORMATION LINE

In addition to reaching us on our Investors Line, you may also reach us by
telephone on our Automated Information Line, 24 hours a day, seven days a week,
at 1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You may also obtain an access code
that will allow you to use the Automated Information Line to make investment and
exchange transactions in your accounts and obtain information about your share
balance, account value and the most recent transaction. Redemptions cannot be
requested on the Automated Information Line. Please call our Investors Line at
1-800-345-2021 for more information on how to obtain an access code for our
Automated Information Line.

HOW TO CHANGE YOUR
ADDRESS OF RECORD

You may notify Twentieth Century of changes in your address of record
either by writing us or calling our Investors Line. Because your address of
record impacts every piece of information we send to you, you are urged to
notify us promptly of any change of address. To protect you and Twentieth
Century, all requests to redeem shares having a value of $25,000 or more, the
proceeds of which are to be paid by check, made within 30 days of our receipt of
an address change (including requests to redeem that accompany an address
change) must be made in writing, signed by each person in whose name the shares
are owned, and all signatures must be guaranteed.

TAX-QUALIFIED
RETIREMENT PLANS

Twentieth Century's funds are available for your tax-deferred retirement
plan. Call or write Twentieth Century and request the appropriate forms for:

o Individual Retirement Accounts (IRAs).
o 403(b) plans for employees of public school systems and non-profit
organizations.
o Profit sharing plans and pension plans for corporations and other
employers.

HOW TO TRANSFER AN INVESTMENT
TO A TWENTIETH CENTURY
RETIREMENT PLAN

It is easy to transfer your tax-deferred plan to Twentieth Century from
another company or custodian. Call or write Twentieth Century for a request to
transfer form.

If you direct Twentieth Century to transfer funds from an existing
non-retirement Twentieth Century account into a retirement account, the shares
in your non-retirement account will be redeemed. The redemption proceeds will be
invested in your Twentieth Century IRA or other tax-qualified retirement plan.
The redemption is a taxable event resulting in a taxable gain or loss.

HOW TO TRANSFER YOUR SHARES
TO ANOTHER PERSON

You may transfer ownership of your shares to another person or organization
by written instructions to Twentieth Century, signed by all owners and with
signatures guaranteed. If the shares are represented by a negotiable stock
certificate, the certificate must be returned with your transfer instructions.

REPORTS TO SHAREHOLDERS

At the end of each quarter, Twentieth Century will send you a consolidated
statement

that summarizes all of your Twentieth Century holdings. At the same time, you
will also receive an individual statement for each Twentieth Century fund you
own with complete year-to-date information on activity in your account. you may
at any time also request a statement of your account activity be sent to you.

With the exception of the automatic transactions noted below, each time you
invest, redeem, transfer or exchange shares, Twentieth Century will send you a
confirmation of the transaction. Automatic investment purchases and 403(b)
purchases (other than transfers), exchanges made in an automatic exchange
program, purchases made by direct deposit and transfers made in a
Transfer-A-Month program, will be confirmed on your next consolidated quarterly
statement. Please carefully review all information in your confirmation or
consolidated statement relating to transactions to ensure that your instructions
have been acted on properly. Please notify Twentieth Century in writing if there
is an error. If you fail to provide notification of an error with reasonable
promptness, i.e., within 30 days of non-automatic transactions (or within 30
days of the date of your consolidated quarterly statement, in the case of
automatic transactions noted above), we will deem you to have ratified the
transaction.

No later than January 31 of each year, Twentieth Century will send you the
following reports, which you may use in completing your U.S. income tax return:

Form 1099-DIV Reports taxable distributions during the preceding year. (If
you did not receive taxable distributions in the previous year,
you will not receive a 1099-DIV.)

Form 1099-B Reports proceeds paid on redemptions during the preceding year.

Form 1099-R Reports distributions from IRAs and 403(b) plans during the
preceding year.

At such time as prescribed by law, Twentieth Century will send you a Form
5498, which reports contributions to your IRA for the previous calendar year.

In May of each year, Twentieth Century will send you an annual report that
includes audited financial statements for the fiscal year ending the preceding
March 31 and a list of securities in its portfolios on that date. In November of
each year, Twentieth Century will send you a semiannual report that includes
unaudited financial statements for the six months ending the preceding September
30, as well as a list of securities in its portfolios on that date. Twentieth
Century does not publish interim lists of its portfolio securities.

Twentieth Century usually prepares and mails to the address of record a new
prospectus dated August 1 of each year. If not sent sooner, you will receive a
current prospectus with the confirmation of your first investment after that
date.

IT IS IMPORTANT THAT YOU NOTIFY TWENTIETH CENTURY PROMPTLY IN WRITING OF
ANY CHANGE OF ADDRESS.

ADDITIONAL INFORMATION YOU SHOULD KNOW
- --------------------------------------------------------------------------------

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares is their net asset value. Twentieth Century, which
is open for business on each day that the New York Stock Exchange (NYSE) is
open, normally calculates each fund's net asset value at the close of business
of the NYSE, usually 3 p.m. Central time.

An investment or a request to redeem or convert shares is processed at the
next net asset value calculated after the investment, redemption or conversion
request is received and accepted by Twentieth Century at its office.

Investments are considered received by Twentieth Century only when your
check or wired funds are received by Twentieth Century. Wired funds are
considered received on the day they are deposited in Twentieth Century's bank
account, if they are deposited before the close of business on the NYSE, usually
3 p.m. Central time.

Investments by telephone pursuant to your prior authorization to Twentieth
Century to draw on your bank account are considered received at the time of your
telephone call.

Redemption requests made by CheckWriting are considered received by
Twentieth Century when the CheckWriting check is presented to our clearing bank
for payment.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized
as follows:

The portfolio securities of each fund, except as otherwise noted, primarily
traded on a domestic securities exchange are valued at the last sale price on
that exchange. If no sale is reported the mean of the latest bid and asked price
is used. Portfolio securities primarily traded on foreign securities exchanges
are generally valued at the preceding closing values of such securities on their
respective exchanges where primarily traded. If no sale is reported, or if local
convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in good faith
by the board of directors.

Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the board of directors.

Pursuant to a determination by Twentieth Century's board of directors that
such value represents fair value, the securities held in the portfolios of
Premium Capital Reserve and Premium Government Reserve, and the debt securities
with maturities of 60 days or less held by Premium Managed Bond, are valued at
amortized cost. When a security is valued at amortized cost, it is valued at its
cost when purchased and thereafter by assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value.

The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which it
is traded or as of the close of business on the NYSE, usually 3 p.m. Central
time, if that is earlier. That value is then converted to dollars at the
prevailing foreign exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day on which the NYSE is open. If an event were to occur
after the value of a security was established but before the net asset value per
share was determined that was likely to materially change the net asset value,
then that security would be valued at fair value as determined by the board of

directors. Trading of these securities in foreign markets may not take place on
every NYSE business day. In addition, trading may take place in various foreign
markets on Saturday or on other days when the NYSE is not open and on which a
fund's net asset value is not calculated. Therefore, such calculation does not
take place at the same time with the determination of the prices of many of the
portfolio securities used in such calculation and the value of the fund's
portfolio may be affected on days when shares of the fund may not be purchased
or redeemed.

WHERE TO FIND INFORMATION
ABOUT SHARE PRICE

Upon satisfaction of the National Association of Securities Dealers, Inc.
publication requirements, the net asset value of Premium Managed Bond will be
published in leading newspapers daily. The yields of Premium Capital Reserve and
Premium Government Reserve will be published weekly in leading financial
publications and daily in many local newspapers. The net asset values, as well
as yield information on all of Twentieth Century's funds, may be obtained by
calling Twentieth Century.

DISTRIBUTIONS

At the close of each day, including Saturdays, Sundays and holidays, net
income of the funds is determined and declared as a distribution. The
distribution will be paid monthly on the last Friday of each month.

You will begin to participate in the distributions the day after your
purchase is effective. If you redeem shares, you will receive the distribution
declared for the day of the redemption. If all shares are redeemed (other than
by CheckWriting), the distribution on the redeemed shares will be included with
your redemption proceeds.

Distributions from net realized securities gains, if any, generally are
declared and paid once a year, but the funds may make distributions on a more
frequent basis to comply with the distribution requirements of the Code, in all
events in a manner consistent with the provisions of the Investment Company Act
of 1940.

Distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 and distributions on shares purchased within the
last 30 days, however, will not be paid in cash and will be reinvested. You may
elect to have distributions on shares held in Individual Retirement Accounts and
403(b) plans paid in cash only if you are 59 1/2 years old or permanently and
totally disabled. Distribution checks normally are mailed within seven days
after the record date.

The board of directors may elect not to distribute capital gains in whole
or in part to take advantage of loss carryovers.

TAXES

Twentieth Century has elected to be taxed under Subchapter M of the
Internal Revenue Code, which means that since Twentieth Century distributes all
of its income, it pays no income taxes.

Distributions of net investment income and net short-term capital gains are
taxable to you as ordinary income, except as described below. Dividends from net
income do not qualify for the 70% dividends-received deduction for corporations
since they are derived from interest income. Distributions from net long-term
capital gains are taxable as long-term capital gains regardless of the length of
time the shares on which such distributions are paid have been held by the
shareholder. However, shareholders should note that any loss realized upon the
sale or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain to the shareholder with respect to such shares.

Dividends and interest received by Premium Managed Bond on foreign
securities may give rise to withholding and other taxes imposed by

foreign countries. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. Foreign countries generally do not
impose taxes on capital gains in respect of investments by non-resident
investors. The foreign taxes paid by the fund will reduce its dividends.

Although it is not anticipated that it will happen, if more than 50% of the
value of Premium Managed Bond's total assets at the end of any fiscal year
consists of securities of foreign corporations, the fund may qualify for and
make an election with the Internal Revenue Service with respect to such fiscal
year so that fund shareholders may be able to claim a foreign tax credit in lieu
of a deduction for foreign income taxes paid by the fund. If such an election is
made, the foreign taxes paid by the fund will be treated as income received by
you.

Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) remains the same. In addition, the share price at the time you purchase
shares may include unrealized gains in the securities held in the investment
portfolio of the fund. If these portfolio securities are subsequently sold and
the gains are realized, they will, to the extent not offset by capital losses,
be paid to you as a distribution of capital gains and will be taxable to you as
short-term or long-term capital gains.

In January of the year following the distribution, Twentieth Century will
send you a Form 1099-DIV notifying you of the status of your distributions for
federal income tax purposes.

Distributions may also be subject to state and local taxes, even if all or
a substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax adviser about the tax status of such
distributions in your own state.

If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, Twentieth Century is required by federal law to withhold
and remit to the IRS 31% of reportable payments (which may include dividends,
capital gains distributions and redemptions). Those regulations require you to
certify that the social security number or tax identification number you provide
is correct and that you are not subject to 31% withholding for previous
under-reporting to the IRS. You will be asked to make the appropriate
certification on your application. Payments reported by Twentieth Century that
omit your taxpayer identification number will subject Twentieth Century to a
penalty of $50, which will be charged against your account if you fail to
provide the certification by the time the report is filed and is not refundable.

Premium Managed Bond may adjust its dividends to take currency fluctuations
into account, which may cause the dividends to vary. If the fund's dividends
exceed its taxable income in any year, which is sometimes the result of
currency-related losses, all or a portion of the fund's dividends may be treated
as a return of capital to shareholders for tax purposes. Any return of capital
will reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The Form 1099-DIV you receive in January will specify if any
distributions included a return of capital.

period of more than one year. If a loss is realized on the redemption of fund
shares, the reinvestment in additional fund shares within 30 days before or
after the redemption may be subject to the "wash sale" rules of the Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

MANAGEMENT

INVESTMENT MANAGEMENT

Under the laws of the State of Maryland, the board of directors is
responsible for managing the business and affairs of Twentieth Century. Acting
pursuant to an investment management agreement entered into with Twentieth
Century, Investors Research Corporation ("Investors Research") serves as the
investment manager of Twentieth Century. Its principal place of business is
Twentieth Century Tower, 4500 Main Street, Kansas City, Missouri 64111.
Investors Research has been providing investment advisory services to investment
companies and institutional clients since 1958.

In June 1995, Twentieth Century Companies, Inc. ("TCC"), the parent of
Investors Research, acquired Benham Management International, Inc. In the
acquisition, Benham Management Corporation ("BMC"), the investment adviser to
the Benham Group of Mutual Funds, became a wholly-owned subsidiary of TCC.
Certain employees of BMC provide investment management services to Twentieth
Century funds, while certain Twentieth Century employees provide investment
management services to Benham funds.

Investors Research supervises and manages the investment portfolios of
Twentieth Century and directs the purchase and sale of its investment
securities. Investors Research utilizes teams of portfolio managers, assistant
portfolio managers and analysts acting together to manage the assets of the
funds. The teams meet regularly to review portfolio holdings and to discuss
purchase and sale activity. The teams adjust holdings in the funds' portfolios
as they deem appropriate in pursuit of the funds' investment objectives.
Individual portfolio manager members of the team may also adjust portfolio
holdings of the funds as necessary between team meetings.

The portfolio manager members of the teams managing the funds described in
this prospectus and their work experience for the last five years are as
follows:

NORMAN E. HOOPS, Senior Vice President and Fixed Income Portfolio Manager,
joined the Twentieth Century mutual fund family as Vice President and Portfolio
Manager in November 1989. In April 1993, he became Senior Vice President. He is
a member of the team that manages Premium Managed Bond.

ROBERT V. GAHAGAN, Vice President and Portfolio Manager, has worked for the
Twentieth Century mutual fund family since May 1983. He became a Portfolio
Manager in December 1991. Prior to that he served as Assistant Portfolio
Manager. He is a member of the team that manages Premium Capital Reserve.

AMY O'DONNELL joined Benham in 1987, becoming a member of its portfolio
department in 1988. In 1992 she assumed her current position as a portfolio
manager of three Benham funds. She is a member of the team that manages Premium
Capital Reserve.

BRIAN HOWELL joined Benham in 1987 as a research assistant, and assumed his
current position as co-manager or assistant manager of three Benham funds in
January 1994. He is a member of the team that manages Premium Government
Reserve.

The activities of Investors Research are subject only to directions of
Twentieth Century's board of directors. Investors Research pays all the expenses
of Twentieth Century except brokerage, taxes, interest, fees and expenses of the
non-interested person directors (including counsel fees) and extraordinary
expenses.

For the services provided to Twentieth Century, Investors Research receives
a fee of

.45% of each fund's average net assets during the year. The fee is paid and
computed each month by multiplying .45% of the aggregate average daily closing
value of each fund's net assets during the previous month by a fraction, the
numerator of which is the number of days in the previous month, and the
denominator of which is 365 (366 in leap years).

CODE OF ETHICS

Twentieth Century and Investors Research have adopted a Code of Ethics,
which restricts personal investing practices by employees of Investors Research
and its affiliates. Among other provisions, the Code of Ethics requires that
employees with access to information about the purchase or sale of securities in
the funds' portfolios obtain preclearance before executing personal trades. With
respect to portfolio managers and other investment personnel, the Code of Ethics
prohibits acquisition of securities in an initial public offering, as well as
profits derived from the purchase and sale of the same security within 60
calendar days. These provisions are designed to ensure that the interests of
fund shareholders come before the interests of the people who manage those
funds.

TRANSFER AND
ADMINISTRATIVE SERVICES

Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri,
64111, acts as transfer, administrative services and dividend paying agent for
Twentieth Century. It provides facilities, equipment and personnel to Twentieth
Century and is paid for such services by Investors Research.

Certain recordkeeping and administrative services that would otherwise be
performed by Twentieth Century Services, Inc., may be performed by an insurance
company or other entity providing similar services for various retirement plans
using shares of Twentieth Century as a funding medium, by broker dealers for
their customers investing in shares of Twentieth Century or by sponsors of multi
mutual fund no- or low- transaction fee programs. Investors Research may enter
into contracts to pay them for such recordkeeping and administrative services
out of its unified management fee.

From time to time, special services may be offered to shareholders who
maintain higher share balances in the funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by Investors Research.

Investors Research and Twentieth Century Services, Inc., are both wholly
owned by Twentieth Century Companies, Inc. James E. Stowers Jr., chairman of the
board of Twentieth Century Investors, Inc., controls Twentieth Century Companies
by virtue of his ownership of a majority of its common stock.

FURTHER INFORMATION
ABOUT TWENTIETH CENTURY

Twentieth Century Premium Reserves, Inc., a diversified, open-end
management investment company, was organized as a Maryland corporation in
January 1993. Its business and affairs are managed by its officers under the
direction of its board of directors.

The principal office of Twentieth Century is Twentieth Century Tower, 4500
Main Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries
may be made by mail to that address, or by phone to 1-800-345-2021. (For local
Kansas City area or international callers: 816-531-5575.)

Twentieth Century Premium Reserves issues three series of $.01 par value
shares. The assets belonging to each series of shares are held separately by the
custodian, and in effect each series is a separate fund.

Each share, irrespective of series, is entitled to one vote for each dollar
of net asset value represented by such share on all questions, except that
certain matters must be voted on

separately by the series of shares affected, and matters affecting only one
series are voted upon by that series.

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes entitled to be cast for the election of directors can
elect all of the directors if they choose to do so, and in such event the
holders of the remaining less-than-50% of the shares will not be able to elect
any person or persons to the board of directors.

Unless required by the Investment Company Act, it will not be necessary for
Twentieth Century to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of directors or the
appointment of auditors. However, pursuant to Twentieth Century's by-laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
request Twentieth Century to hold a special meeting of shareholders.

TWENTIETH CENTURY RESERVES THE RIGHT TO CHANGE ANY OF ITS POLICIES,
PRACTICES AND PROCEDURES DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT
OF ADDITIONAL INFORMATION, WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE
INSTANCES WHERE SHAREHOLDER APPROVAL IS EXPRESSLY REQUIRED.

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TWENTIETH CENTURY
PREMIUM RESERVES

PROSPECTUS

August 1, 1996

[company logo]
Investments That Work(TM)

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P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385
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PERSON-TO-PERSON ASSISTANCE:
1-800-345-3533 OR 816-531-5575
- ----------------------------------------------------
AUTOMATED INFORMATION LINE:
1-800-345-8765
- ----------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-753-0070
- ----------------------------------------------------
FAX: 816-340-4360
- ----------------------------------------------------
INTERNET ADDRESS: HTTP://WWW.TWENTIETH-CENTURY.COM
- ----------------------------------------------------

[company logo]
================================================================================
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SH-BKT-5506 [Recycled logo]
9608 Recycled

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TWENTIETH CENTURY
PREMIUM RESERVES
PROSPECTUS