N-30D 1 tfm.htm Zurich Scudder Investments

[Scudder Investments logo]


Scudder Tax-Free
Money Fund

Class AARP and Class S Shares

Annual Report

May 31, 2002



Contents


<Click Here> Letter from the Fund's President

<Click Here> Portfolio Management Review

<Click Here> Investment Portfolio

<Click Here> Financial Statements

<Click Here> Financial Highlights

<Click Here> Notes to Financial Statements

<Click Here> Report of Independent Accountants

<Click Here> Tax Information

<Click Here> Shareholder Meeting Results

<Click Here> Trustees and Officers

<Click Here> Investment Products and Services

<Click Here> Account Management Resources

Scudder Tax-Free Money Fund

Ticker Symbol

Fund Number

Class AARP

AFRXX

171

Class S

STFXX

071


On April 5, 2002, Zurich Scudder Investments (ZSI) was acquired by Deutsche Bank. Upon the closing of this transaction, ZSI became part of Deutsche Asset Management and changed its name to Deutsche Investment Management Americas Inc.

Deutsche Asset Management is the marketing name in the United States for the asset management activities of Deutsche Bank AG, Deutsche Investment Management Americas Inc., Deutsche Asset Management Inc., Deutsche Bank Securities Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company.

Please see the fund's prospectus for more complete information, including a complete description of the fund's investment policies. To obtain a prospectus, download one from aarp.scudder.com (Class AARP) or myScudder.com (Class S), talk to your financial representative or call Shareholder Services at 1-800-253-2277 (Class AARP) or 1-800-SCUDDER (Class S). The prospectus contains more complete information, including management fees and expenses. Please read it carefully before you invest or send money.


Letter from the Fund's President


tfm_picglavin0Dear Shareholder,

We are writing to report to you on Scudder Tax-Free Money Fund's most recent fiscal year ended May 31, 2002. As of the close of the period on May 31, Scudder Tax-Free Money Fund's seven-day annualized yield was 0.91 percent. Over the 12-month period, the total return of Class S shares of the fund was 1.39 percent, exceeding the 1.38 percent average return of tax-exempt money market funds according to Lipper, Inc.

We are pleased to announce that in conjunction with Scudder's recent acquisition by Deutsche Bank and Deutsche Asset Management (DeAM), Scudder Tax-Free Money Fund will now be managed by a group led by Darlene Rasel, Managing Director. Darlene joined DeAM in 1987 and is responsible for all of the firm's money market and government mutual funds. We also thank Frank Rachwalski for his many years of fine leadership in managing Scudder's money market funds.

Thank you for your continued investment with Scudder. If you have any questions regarding Scudder Tax-Free Money Fund, please call us toll-free or visit us on the Web.

Sincerely,

tfm_sigglavin0
William F. Glavin, Jr.
President, Scudder Tax-Free Money Fund

AARP Investment Program

Scudder Class S

Web site:

aarp.scudder.com

myScudder.com

Toll-free:

1-800-253-2277

1-800-SCUDDER



Portfolio Management Review


Scudder Tax-Free Money Fund: A Team Approach to Investing

Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for Scudder Tax-Free Money Fund. DeIM has more than 80 years of experience managing mutual funds and provides a full range of investment advisory services to institutional and retail clients. DeIM is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.

Deutsche Asset Management is a global asset management organization that offers a wide range of investing expertise and resources, including more than 500 portfolio managers and analysts and an office network that reaches the world's major investment centers. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.

DeIM is an indirect, wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.

Lead Portfolio Manager Darlene M. Rasel joined the Advisor in 1987 and has been responsible for the day-to-day management of the fund since April 8, 2002. Ms. Rasel is responsible for managing the Advisor's money market and government mutual funds.

In the following interview, Lead Portfolio Manager Darlene M. Rasel discusses the market environment and her team's approach to managing the fund.

Q: How did the fund perform over its most recent fiscal year?

A: Over the 12 months ended May 31, 2002, Scudder Tax-Free Money Fund's seven-day annualized yield declined from 2.61 percent to 0.91 percent, reflecting the Federal Reserve Board's long series of interest rate reductions during 2001. (The seven-day annualized yield of 0.91 percent is equivalent to a taxable yield of 1.48 percent for investors in the 38.6 percent federal tax bracket.) There were 11 rate cuts in all in 2001, reducing the federal funds rate - the rate the Fed charges banks for overnight loans - from 6 percent to its current level, 1.75 percent. For the 12-month period ended May 31, Class S shares of the fund returned 1.39 percent, exceeding the 1.38 percent average return of tax-exempt money market funds according to Lipper, Inc.

Q: With the economy seemingly growing again but the stock market faltering, what are the prospects for interest rate increases from the Fed?

A: For a couple of reasons, we think that the Fed will remain "neutral" (i.e., maintain the current level of short-term interest rates) for a little while. The first reason is the stock market's troubles, and the second is the current political environment, which is creating a lot of uncertainty. Homeland security threats are weighing on confidence, as are the continuing tensions between India and Pakistan. In addition, concern over corporate responsibility is weighing on the financial markets, as exemplified by WorldCom, Tyco and Enron. We think that with all the uncertainty, the Fed won't act to raise interest rates for at least three or four months.

Fund's Class S Shares Yields1


7-day
average
yield

7-day
compounded
effective yield

May 31, 2001
2.61%
2.64%
May 31, 2002
.91%
.91%

1 Yields will fluctuate with changing market conditions.

Q: In light of current market conditions, what has been the fund's strategy?

A: We have extended the fund's maturity slightly but are being cautious because the money market yield curve2 has flattened quite a bit. This means that because there isn't much more yield available from securities with longer maturities, at present it doesn't pay to take on the additional risk of holding longer maturities in the portfolio. So we have been careful in terms of extending average maturity. We are also working to ensure the highest possible credit quality within the fund's holdings to reduce risk within the portfolio. The credit quality of some issuers in the marketplace has been weakened over the past year because of disappointing earnings reports and estimates. We will continue to stay with the best-quality issuers until the economy turns up and we feel we can afford to increase credit risk slightly to boost yield potential.

2 The yield curve is a graph with a left-to-right line that shows how high or low yields are, from the shortest to the longest maturities. Typically the line rises from left to right as investors who are willing to tie up their money for a longer period of time are rewarded with higher yields.

Q: How did you allocate the fund's assets over the period?

A: The fund maintained exposure to a broad selection of short-term tax-free money market securities, including variable-rate demand notes and high-quality commercial paper. Variable-rate demand notes are securities with floating rates that are adjusted weekly or daily to capture current yields and preserve liquidity. Because of their attractive characteristics, these securities comprised a significant portion of the fund's portfolio at 51.4 percent of assets. Tax-exempt commercial paper, the fund's second largest holding at 43.3 percent of assets, boosted stability by allowing the fund to lock in attractive rates over a period of one to three months. In general, the fund's allocation of assets tends to remain fairly stable over time.

Changes in the Federal Funds Rate during 2001


New rate

Change

January 3

6.00%

-0.50%

January 31

5.50%

-0.50%

March 20

5.00%

-0.50%

April 18

4.50%

-0.50%

May 15

4.00%

-0.50%

June 27

3.75%

-0.25%

August 21

3.50%

-0.25%

September 17

3.00%

-0.50%

October 2

2.50%

-0.50%

November 6

2.00%

-0.50%

December 12

1.75%

-0.25%


The Federal Funds Rate is the interest rate charged by banks with excess reserves at the Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. The Federal Funds Rate is the most sensitive indicator of the direction of interest rates, since it is set daily by the market and represents a very short maturity - an overnight loan.

Q: What is your outlook for the coming months?

A: We believe that when the Fed does tighten credit by raising interest rates it will be gradual. As we've said, we don't think the Fed is going to take any action for at least the next few months. U.S. inflation numbers are currently very low. We think the Fed would be concerned if upcoming economic reports don't show at least some inflation. If there is some inflation that means that certain corporations have demonstrated pricing power (the ability to raise their prices while maintaining demand for their products) and that there's some potential for corporate profitability, economic recovery and eventual increases in short-term rates.

In this context, we plan to keep the fund's average maturity at about the same level, or slightly longer than average. We will also continue to emphasize high credit quality. In addition, we seek high yield potential that is consistent with stability of principal.

The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover. The manager's views are subject to change at any time, based on market and other conditions.

Although the fund seeks income that is federally tax free, a portion of the fund's returns may be subject to federal, state, local and the alternative minimum tax.

An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

Investment Terms to Know

Asset-Backed Securities - Bonds or notes backed by loan paper or accounts receivable originated by banks, credit card companies, or other providers of credit and often "enhanced" by a bank Letter of Credit or by insurance coverage provided by an institution other than the issuer.

Certificate of Deposit (CD) - An interest-bearing debt instrument issued by a bank. Maturities of CDs can range from a few weeks to several years and their interest rates are set by competitive market forces.

Commercial Paper - Short-term debt obligations with maturities ranging from one to 270 days issued by banks, corporations and other borrowers to investors. Both Moody's and Standard & Poor's assign credit ratings to commercial paper.

Floating-Rate Security - A note representing short-term borrowings bearing an interest rate that is tied to a money market rate, usually the bank prime rate. The rate on the note is adjusted upward or downward each time the base rate changes.

Repurchase Agreements (Repos) - An agreement between a seller and a buyer, usually of government securities, where the seller agrees to repurchase the securities at a given price and usually at a stated time. Repos are widely used money market instruments that serve as interest-bearing, short-term "parking places" for large sums of money.

U.S. Government Agency Obligations - Debt instruments that a U.S. government agency has pledged to repay.

Variable-Rate Security - A debt instrument with a variable interest rate, one that typically adjusts every six months, and is tied to a money market instrument such as Treasury bills.

Source: Barron's Dictionary of Finance and Investment Terms; Scudder Investments.


Investment Portfolio as of May 31, 2002



Principal Amount ($)

Value ($)

Municipal Investments - 100%

Alabama 1.2%

Birmingham, Special Care Facilities Financing Authority, 1.45%*, 11/15/2039
1,000,000
 1,000,000
Mobile, Special Care Facilities Financing Authority, Ascension Health Project, 1.45%*, 11/15/2039
3,000,000
 3,000,000

Arizona 4.0%

Salt River, Agricultural Improvement and Power District:

1.35%, 6/10/2002

3,000,000
 3,000,000

1.35%, 6/11/2002

6,000,000
 6,000,000

1.55%, 9/10/2002

4,500,000
 4,500,000

Arkansas 0.7%

Pocahontas, MacLean, AMT, 1.5%*, 5/1/2015
2,500,000
 2,500,000

California 2.8%

Revenue Anticipation Notes, 3.25%, 6/28/2002
6,000,000
 6,004,496
Revenue Anticipation Notes, Series C, 1.475%*, 6/28/2002
3,500,000
 3,500,000

Colorado 1.1%

Denver, City & Country Economic Development Revenue, Western Stock Show Project, 1.55%*, 7/1/2029
1,105,000
 1,105,000
Traer Creek, Metropolitan District Revenue, 1.45%*, 10/1/2021
2,500,000
 2,500,000

District of Columbia 1.0%

Core City GO: Series B-1, 1.7%*, 6/1/2003
2,000,000
 2,000,000
Core City GO: Series B-2, 1.7%*, 6/1/2003
1,400,000
 1,400,000

Florida 14.6%

Gainesville, Utility System, Series C, 1.55%, 6/7/2002
3,000,000
 3,000,000
Indian River Country, Hospital Revenue, 1.55%*, 10/1/2015
1,000,000
 1,000,000
Jacksonville, Electric Authority, Series C-1:

1.5%, 9/9/2002

4,000,000
 4,000,000

1.55%, 9/10/2002

5,000,000
 5,000,000
Kissimmee, Utility Revenue, Series B, 1.5%, 8/14/2002
4,000,000
 4,000,000
Miami-Dade County, Industrial Development Authority Revenue, Gulliver Schools Project, 1.5%*, 9/1/2029
3,970,000
 3,970,000
Miami-Dade County, Aviation Revenue, Series A, AMT, 1.6%, 6/14/2002
3,500,000
 3,500,000
Miami-Dade County, Aviation Revenue, Series A, AMT, 1.65%, 6/14/2002
5,269,000
 5,269,000
Orange County, Health Facilities Authority Revenue, Presbyterian Retirement Project, 1.5%*, 11/1/2028
4,200,000
 4,200,000
Orlando, Capital Improvements, 1.4%, 6/12/2002
1,600,000
 1,600,000
University of Northern Florida, Capital Improvement Revenue, 1.5%*, 11/1/2024
1,000,000
 1,000,000
University of Northern Florida, Capital Improvement Revenue, 1.5%*, 11/1/2030
7,000,000
 7,000,000

Georgia 2.9%

General Obligation:

1.65%, 6/7/2002

3,000,000
 3,000,000

1.65%, 6/13/2002

5,000,000
 5,000,000
Willacoochie, Development Authority, Pollution Control Revenue, AMT, 1.5%*, 5/1/2021
2,000,000
 2,000,000

Idaho 0.9%

Powers County, Industrial Development Revenue, AMT, 1.5%*, 4/1/2014
3,000,000
 3,000,000

Illinois 4.4%

Alsip, Industrial Development Revenue, Keebler Co. Project, 1.5%*, 10/1/2004
3,750,000
 3,750,000
Chicago, De La Salle Project, 1.5%*, 4/1/2027
2,000,000
 2,000,000
Chicago, Multi-Family Housing Revenue, Barbara Jean Wright Apartments, Series B, AMT, 1.48%*, 7/1/2029
3,300,000
 3,300,000
Development Finance Authority Revenue, Museum of Contemporary Art Project, 1.45%*, 2/1/2029
2,000,000
 2,000,000
Development Finance Authority Revenue, Organization Bank Project, 1.55%*, 12/1/2020
1,900,000
 1,900,000
Health Facilities Revenue, Northwestern University, 1.6%*, 8/15/2029
1,800,000
 1,800,000

Indiana 2.4%

Crawfordville, AMT, 1.5%*, 6/1/2007
2,250,000
 2,250,000
Health Facilities Financing Authority Revenue, Ascension Health, Series B, 1.45%*, 11/15/2039
1,355,000
 1,355,000
Portage, Economic Development Revenue, Breckenridge Apartments Project, AMT, 1.6%*, 5/1/2025
4,650,000
 4,650,000

Kentucky 4.2%

Asset/Liability Commission, General Fund Revenue, Tax and Revenue Anticipation Notes, Series B, 1.24%*, 6/26/2002
5,500,000
 5,500,000
Economic Development Authority, Health Facilities Revenue, Easter Seal Society Project, 1.55%*, 11/1/2030
1,935,000
 1,935,000
Lexington-Fayette Urban County, Industrial Development Revenue, YMCA Central Kentucky Inc. Project, 1.55%*, 7/1/2019
1,800,000
 1,800,000
Pendleton County, Multi-County Lease Revenue, 1.5%, 6/13/2002
5,000,000
 5,000,000

Louisiana 0.1%

Baton Rouge, Exxon Project, 1.55%*, 3/1/2022
300,000
 300,000

Michigan 4.1%

Strategic Fund, Limited Obligation Revenue, Lake Shore Inc. Project, AMT, 1.7%*, 11/1/2019
2,060,000
 2,060,000
Oakland County, Economic Development Corp., Limited Obligation Revenue, Lyon Gear & Machine, Inc. Project, AMT, 1.7%*, 5/1/2012
2,500,000
 2,500,000
State Building Authority Revenue, Series I, 5.875%*, 10/1/2008
1,000,000
 1,033,757
University of Michigan Hospital, Series A, 1.6%*, 12/1/2027
5,520,000
 5,520,000
University of Michigan Board of Regents, Series C, 1.5%, 7/15/2002
2,660,000
 2,660,000

Minnesota 1.0%

Cottage Grove, Environment Control Revenue, Minnesota Mining and Manufacturing Project, AMT, 1.685%*, 8/1/2012
1,400,000
 1,400,000
Rochester, Health Facilities Revenue, Series B, 1.5%, 8/21/2002
2,000,000
 2,000,000

Missouri 1.5%

State Development & Finance Board, Cargo Facilities Revenue, AMT, 1.57%*, 3/1/2030
2,000,000
 2,000,000
St. Louis, Airport Revenue Municipal Securities Trust Receipts, Series SGA 71, AMT, 1.52%*, 7/1/2022 (b)
3,000,000
 3,000,000

Montana 1.6%

Forsyth, Pollution Control Revenue, Pacificorp Project, 1.7%*, 1/1/2018
5,450,000
 5,450,000

Nebraska 3.2%

Omaha, Public Power District, 1.47%, 6/20/2002
5,900,000
 5,900,000
Omaha, Public Power District, 1.6%, 7/12/2002
2,000,000
 2,000,000
Omaha, Public Power District, 1.65%, 7/11/2002
3,000,000
 3,000,000

Nevada 0.4%

Las Vegas, Valley Water Authority, 1.35%, 6/12/2002
1,300,000
 1,300,000

New Hampshire 1.2%

State Business Finance Authority, Waste Management of NH Inc. Project, AMT, 1.5%*, 9/1/2012
4,000,000
 4,000,000

New Jersey 1.7%

Salem County, Industrial Pollution Control Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 1.65%*, 3/1/2012
5,900,000
 5,900,000

New York 1.3%

New York City, General Obligation, Series A-10, 1.52%*, 8/1/2017
1,300,000
 1,300,000
New York City, Transitional Finance Authority Revenue, Series A, 3.25%, 10/2/2002
3,000,000
 3,011,080

Ohio 2.2%

Higher Educational Facilities Authority Revenue, Series A, 1.55%*, 9/1/2020
945,000
 945,000
Higher Educational Facilities Authority Revenue, Series B, 1.55%*, 9/1/2020
1,600,000
 1,600,000
Water Development Authority, 1.5%, 9/9/2002
5,000,000
 5,000,000

Pennsylvania 9.2%

Bucks County, Oxford Fox Plaza Project, 1.63%*, 10/1/2014
7,600,000
 7,600,000
Dallastown, Area School District, General Obligation, 1.46%*, 2/1/2018 (b)
3,670,000
 3,670,000
Dauphin County, General Authority Revenue, 1.48%*, 11/1/2017 (b)
5,605,000
 5,605,000
Emmaus, General Authority Revenue, Series A, 1.43%*, 3/1/2030 (b)
9,000,000
 9,000,000
Lancaster County, Hospital Authority Revenue, Healthcenter-Luthercare Project, 1.65%*, 2/15/2029
1,015,000
 1,015,000
Higher Education Assistance Agency, Student Loan Revenue, Series A, 1.5%*, 3/1/2027
2,000,000
 2,000,000
Public School Building Authority, Parkland School District, Series D, 1.46%*, 3/1/2019 (b)
2,210,000
 2,210,000

South Carolina 1.9%

Marlboro County, Industrial Development Revenue, Reliance Trading Corp. Project, AMT, 1.48%*, 5/1/2017
2,000,000
 2,000,000
Public Service Authority, 1.4%, 9/12/2002
1,500,000
 1,500,000
Public Service Authority, 1.45%, 8/12/2002
3,000,000
 3,000,000

Tennessee 0.6%

Montgomery County, 1.65%*, 4/1/2032
2,000,000
 2,000,000

Texas 21.8%

Austin, Utility System, 1.35%, 6/10/2002
7,000,000
 7,000,000
Austin, Utility System, 1.35%, 6/11/2002
2,717,000
 2,717,000
Austin, Utility System, 1.35%, 6/12/2002
3,323,000
 3,323,000
Harris County, A-1, 1.5%, 8/7/2002
4,700,000
 4,700,000
Harris County, D, 1.5%, 6/7/2002
2,000,000
 2,000,000
Houston, Water and Sewer Revenue, Series A, 1.55%, 6/11/2002
5,000,000
 5,000,000
San Antonio, Electric & Gas Revenue:

1.35%, 6/12/2002

3,600,000
 3,600,000

1.45%, 7/23/2002

3,000,000
 3,000,000

1.45%, 8/20/2002

5,100,000
 5,100,000

1.47%*, 2/1/2018

2,000,000
 2,000,000

1.5%, 6/13/2002

1,000,000
 1,000,000
Small Business Industrial Development Corp., Industrial Development Revenue, 1.5%*, 7/1/2026
11,500,000
 11,500,000
Municipal Power Agency, 1.5%, 8/12/2002
2,000,000
 2,000,000
Municipal Power Agency, 1.7%, 7/10/2002
3,700,000
 3,700,000
Municipal Power Agency, 1.75%, 7/9/2002
5,000,000
 5,000,000
Tax & Revenue Anticipation Notes, Series A, 3.75%, 8/29/2002
5,000,000
 5,015,346
University of Texas, Series A, 1.45%, 7/8/2002
3,000,000
 3,000,000
Waco, Industrial Development Corp., Economic Development Revenue, Patriot Homes of Texas Project, 1.7%*, 6/1/2014
4,100,000
 4,100,000

Utah 2.5%

Intermountain Power Agency, 1.5%, 7/1/2002
3,000,000
 3,000,000
Intermountain Power Agency, 1.6%, 6/10/2002
3,000,000
 3,000,000
Salt Lake City, Series B, 1.55%*, 8/1/2007
2,715,000
 2,715,000

Washington 2.4%

Port of Anacortes, 1.45%, 8/7/2002
2,000,000
 2,000,000
Port of Anacortes, 1.5%, 8/7/2002
2,000,000
 2,000,000
Tacoma, Electric Revenue, Series A, 1.6%, 6/13/2002
4,000,000
 4,000,000

West Virginia 0.5%

Randolph County, Industrial Development Revenue, Allegheny Wood Products Project, 1.7%*, 12/1/2007
1,775,000
 1,775,000

Wisconsin 2.6%

Caledonia, Industrial Development Revenue, Badger Electronics Project, AMT, 1.7%*, 9/1/2020
2,170,000
 2,170,000
Franklin, Industrial Development Revenue, All-Glass Aquarium Co. Project, AMT, 1.7%*, 9/1/2018
2,000,000
 2,000,000
Oak Creek, Pollution Control Revenue, 1.75%*, 8/1/2016
1,000,000
 1,000,000
Wausau, Pollution Control Revenue, Minnesota Mining and Manufacturing Project, 1.685%*, 8/1/2017
2,800,000
 2,800,000
Whitewater, Industrial Development Authority, MacLean Fogg Project, 1.6%*, 12/1/2009
1,000,000
 1,000,000
Total Investment Portfolio - 100.0% (Cost $332,983,679) (a)

332,983,679


* Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and normally incorporate an irrevocable letter of credit or line of credit from a major bank. These securities are shown at their current rates as of May 31, 2002.
(a) The cost for federal income tax purposes was $332,983,679.
(b) Bond is insured by one of these companies: AMBAC, Capital Guaranty, FGIC, FSA, FHA or MBIA.
AMT: Subject to alternative minimum tax.

The accompanying notes are an integral part of the financial statements.


Financial Statements


Statement of Assets and Liabilities as of May 31, 2002

Assets
Investments in securities, at value (cost $332,983,679)
 $ 332,983,679
Receivable for investments sold
 1,370,553
Interest receivable
 980,647
Receivable for Fund shares sold
 365,992
Total assets
 335,700,871
Liabilities
Due to custodian bank
 224,223
Dividends payable
 29,136
Payable for Fund shares redeemed
 467,614
Accrued management fee
 162,625
Other accrued expenses and payables
 45,768
Total liabilities
 929,366
Net assets, at value

$ 334,771,505

Net Assets
Net assets consist of:
Accumulated net realized gain (loss)
 (1,044,563)
Paid-in capital
 335,816,068
Net assets, at value

$ 334,771,505

Net Asset Value
Class AARP
Net Asset Value, offering and redemption price per share ($75,778,546 / 75,843,471 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)

$ 1.00

Class S
Net Asset Value, offering and redemption price per share ($258,992,959 / 258,810,543 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)

$ 1.00


The accompanying notes are an integral part of the financial statements.



Statement of Operations for the year ended May 31, 2002

Investment Income
Income:
Interest
 $ 6,934,246
Expenses:
Management fee
 1,698,408
Administrative fee
 509,525
Trustees' fees and expenses
 9,176
Other
 10,882
Total expenses, before expense reductions
 2,227,991
Expense reductions
 (5,579)
Total expenses, after expense reductions
 2,222,412
Net investment income

4,711,834

Net realized gain (loss) on investment transactions
 (112)
Net increase (decrease) in net assets resulting from operations

$ 4,711,722


The accompanying notes are an integral part of the financial statements.



Statement of Changes in Net Assets

Increase (Decrease) in Net Assets

Years Ended May 31,

2002

2001

Operations:
Net investment income
 $ 4,711,834 $ 10,916,027
Net realized gain (loss) on investment transactions
 (112) -
Net increase (decrease) in net assets resulting from operations
 4,711,722 10,916,027
Distributions to shareholders from:
Net investment income:
Class AARP
(1,107,088) (1,910,546)
Class S
(3,606,394) (9,005,481)
Fund share transactions:
Proceeds from shares sold
 439,117,219 473,410,254
Net assets acquired in tax-free reorganization
 - 81,938,780
Reinvestment of distributions
 4,079,187 9,637,159
Cost of shares redeemed
 (453,513,912) (487,091,918)
Net increase (decrease) in net assets from Fund share transactions
 (10,317,506) 77,894,275
Increase (decrease) in net assets
(10,319,266) 77,894,275
Net assets at beginning of period
 345,090,771 267,196,496
Net assets at end of period

$ 334,771,505

$ 345,090,771


The accompanying notes are an integral part of the financial statements.


Financial Highlights


Class AARP

Years Ended May 31,

2002

2001a

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

Income from investment operations:
Net investment income
.014 .024
Less distributions from:
Net investment income
(.014) (.024)
Net asset value, end of period

$ 1.00

$ 1.00

Total Return (%)
 1.39 2.50**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)
 76 83
Ratio of expenses (%)
 .65 .65*
Ratio of net investment income (%)
 1.39 3.28*
a For the period from September 11, 2000 (commencement of sales of Class AARP shares) to May 31, 2001.
* Annualized
** Not annualized



Class S

Years Ended May 31,

2002

2001

2000

1999a

1998b

1997b

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Income from investment operations:
Net investment income
.014 .034 .030 .010 .029 .031
Less distributions from:
Net investment income
(.014) (.034) (.030) (.010) (.029) (.031)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)
 1.39 3.43c 3.09c 1.03c** 2.92c 3.10c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)
 259 262 267 257 249 283
Ratio of expenses before expense reductions (%)
 .65 .67 .75d .75* .71 .76
Ratio of expenses after expense reductions (%)
 .65 .65 .66d .65* .65 .65
Ratio of net investment income (%)
 1.39 3.39 3.04 2.46* 2.87 3.06
a For the five months ended May 31, 1999. On August 10, 1998, the Fund changed its fiscal year end from December 31 to May 31.
b Years ended December 31.
c Total returns would have been lower had certain expenses not been reduced.
d The ratios of operating expenses excluding costs incurred in connection with the reorganization in fiscal 2000 before and after expense reductions were .73% and .65%, respectively.
* Annualized
** Not annualized


Notes to Financial Statements


A. Significant Accounting Policies

Scudder Tax-Free Money Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares. Shares of Class AARP are designed for members of AARP. Class S shares of the Fund are generally not available to new investors.

Investment income, realized and unrealized gains and losses and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of both classes of shares. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.

The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.

Security Valuation. Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required.

At May 31, 2002, the Fund had a net tax basis capital loss carryforward of approximately $1,044,000, which may be applied against any realized net taxable gains of each succeeding year until fully utilized or until May 31, 2003 ($166,000), May 31, 2004 ($550,000), May 31, 2005 ($221,000) and May 31, 2006 ($107,000), the respective expiration dates, whichever occurs first.

Distribution of Income and Gains. All of the net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.

Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Fund except for undistributed net investment income of $632,275 at May 31, 2002.

Other. Investment transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.

B. Related Parties

On April 5, 2002, 100% of Zurich Scudder Investments, Inc. ("ZSI"), was acquired by Deutsche Bank AG with the exception of Threadneedle Investments in the U.K. Upon the closing of this transaction, ZSI became part of Deutsche Asset Management and changed its name to Deutsche Investment Management Americas Inc. ("DeIM" or the "Advisor"). Effective April 5, 2002, the investment management agreements with ZSI were terminated and DeIM became the investment advisor for the Fund. The Investment Management Agreement (the "Management Agreement") is the same in all material respects as the corresponding previous Management Agreement.

Management Agreement. Under the Management Agreement, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Management Agreement. The management fee payable under the Management Agreement is equal to an annual rate of 0.50% of the first $500,000,000 of average daily net assets and 0.48% of such net assets in excess of $500,000,000, computed and accrued daily and payable monthly. Accordingly, for the year ended May 31, 2002, the fee pursuant to the Management Agreement was equivalent to an annualized effective rate of 0.50% of the Fund's average daily net assets.

Administrative Fee. Under the Administrative Agreement (the "Administrative Agreement"), the Advisor provides, or pays others to provide, substantially all of the administrative services required by the Fund (other than those provided by the Advisor under its Management Agreement with the Fund, as described above) in exchange for the payment by the Fund of an administrative services fee (the "Administrative Fee") of 0.15% of average daily net assets of each class, computed and accrued daily and payable monthly.

Various third-party service providers, some of which are affiliated with the Advisor, provide certain services to the Fund under the Administrative Agreement. Scudder Fund Accounting Corporation, a subsidiary of the Advisor, computes the net asset value for the Fund and maintains the accounting records of the Fund. Scudder Service Corporation, also a subsidiary of the Advisor, is the transfer, shareholder service and dividend-paying agent for the Fund. Scudder Trust Company, an affiliate of the Advisor, provides subaccounting and recordkeeping services for the shareholders in certain retirement and employee benefit plans. In addition, other service providers, not affiliated with the Advisor provide certain services (i.e., custody, legal and audit) to the Fund under the Administrative Agreement. The Advisor pays the service providers for the provision of their services to the Fund and pays other Fund expenses, including insurance, registration, printing, postage and other costs. Certain expenses of the Fund will not be borne by the Advisor under the Administrative Agreement, such as taxes, brokerage, interest and extraordinary expenses, and the fees and expenses of the Independent Trustees (including the fees and expenses of their independent counsel). For the year ended May 31, 2002, the Administrative Fee was as follows:

Administrative Fee

Total Aggregated

Unpaid at May 31, 2002

Class AARP
 $ 121,324 $ 9,935
Class S
 388,201 34,436

$ 509,525

$ 44,371


Trustees' Fees and Expenses. The Fund pays each Trustee not affiliated with the Advisor retainer fees plus specified amounts for attended board and committee meetings.

Other Related Parties. AARP through its affiliates monitors and approves the AARP Investment Program from the Advisor. The Advisor has agreed to pay a fee to AARP and/or its affiliates in return for the use of the AARP trademark and services relating to investments by AARP members in Class AARP shares of the Fund. This fee is calculated on a daily basis as a percentage of the combined net assets of the AARP classes of all funds managed by the Advisor. The fee rates, which decrease as the aggregate net assets of the AARP classes become larger, are as follows: 0.07% for the first $6,000,000,000 of net assets, 0.06% for the next $10,000,000,000 of such net assets and 0.05% of such net assets thereafter. These amounts are used for the general purposes of AARP and its members.

C. Expense Off-Set Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the year ended May 31, 2002, pursuant to the Administrative Agreement, the Administrative Fee was reduced by $5,579.

D. Line of Credit

The Fund and several affiliated funds (the "Participants") share in a $1.3 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, pro rata based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.

E. Acquisition of Assets

On September 8, 2000, the Fund acquired all the net assets of AARP High Quality Tax Free Money Fund pursuant to a plan of reorganization approved by shareholders on July 13, 2000. The acquisition was accomplished by a tax-free exchange of 82,004,121 Class AARP shares of the Fund for 82,004,121 shares of AARP High Quality Tax Free Money Fund outstanding on September 8, 2000. AARP High Quality Tax Free Money Fund's net assets at that date ($81,938,780) were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $280,776,827. The combined net assets of the Fund immediately following the acquisition were $362,715,607.

F. Share Transactions

The following table summarizes shares and dollar activity in the Fund:


Year Ended May 31, 2002

Year Ended May 31, 2001


Shares

Dollars

Shares

Dollars

Shares sold
Class AARP
 16,537,661 $ 16,537,921 15,768,197* $ 15,768,639*
Class S
 422,578,899 422,579,298 457,613,763 457,641,615

$ 439,117,219

$ 473,410,254

Shares issued in tax-free reorganization
Class AARP
 - $ - 82,004,121 $ 81,938,780
Shares issued to shareholders in reinvestment of distributions
Class AARP
 900,747 $ 900,747 1,556,358* $ 1,556,358*
Class S
 3,178,165 3,178,440 8,080,801 8,080,801

$ 4,079,187

$ 9,637,159

Shares redeemed
Class AARP
 (24,390,101) $ (24,390,101) (16,533,512)* $ (16,533,512)*
Class S
 (429,123,810) (429,123,811) (470,558,406) (470,558,406)

$ (453,513,912)

$ (487,091,918)

Net increase (decrease)
Class AARP
 (6,951,693) $ (6,951,433) 82,795,164* $ 82,730,265*
Class S
 (3,366,746) (3,366,073) (4,863,842) (4,835,990)

$ (10,317,506)

$ 77,894,275


* For the period from September 11, 2000 (commencement of sales of Class AARP shares) to May 31, 2001.


Report of Independent Accountants


To the Trustees and Shareholders of Scudder Tax-Free Money Fund:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights included herein, present fairly, in all material respects, the financial position of Scudder Tax-Free Money Fund (the "Fund") at May 31, 2002, and the results of its operations, the changes in its net assets and the financial highlights of the classes presented for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights presented (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

Boston, Massachusetts
July 10, 2002

PricewaterhouseCoopers LLP



Tax Information (Unaudited)


Of the dividends paid from net investment income for the taxable year ended May 31, 2002, 100% are designated as exempt interest dividends for federal income tax purposes.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call 1-800-SCUDDER.


Shareholder Meeting Results


A Special Meeting of Shareholders of Scudder Tax Free Money Fund was held on March 28, 2002, at the office of Deutsche Investment Management Americas Inc. (formerly Zurich Scudder Investments, Inc.), Two International Place, Boston, Massachusetts. At the meeting, the following matter was voted upon by the shareholders (the resulting votes are presented below):

1. To approve a new investment management agreement for the fund with Deutsche Investment Management Americas Inc.

Affirmative

Against

Abstain

181,947,736

8,980,594

6,015,570



Trustees and Officers


The following table presents information about each Trustee of the Fund as of May 31, 2002. Each Trustee's age is in parentheses after his or her name. Unless otherwise noted, (i) each Trustee has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity, and (ii) the address of each Trustee is c/o Deutsche Asset Management, Two International Place, Boston, Massachusetts 02110-4103. The term of office for each Trustee is until the next meeting of shareholders called for the purpose of electing Trustees and until the election and qualification of a successor, or until such Trustee sooner dies, resigns or is removed as provided in the governing documents of the Fund. Because the Fund does not hold an annual meeting of shareholders, each Trustee will hold office for an indeterminate period.

Non-Interested Trustees

Name, Age and Position(s) Held with the Fund
Length of Time Served
Principal
Occupation(s)
During Past 5 Years
Number of Portfolios in Fund Complex Overseen by Trustee
Other Directorships Held
Henry P. Becton, Jr. (58)
Trustee
 1997 to present
 President, WGBH Educational Foundation
 48
 American Public Television;
New England Aquarium;
Becton Dickinson and Company;
Mass Corporation for Educational Telecommunications;
The A.H. Belo Company;
Committee for Economic Development;
Concord Academy;
Public Broadcasting Service;
Boston Museum of Science
Dawn-Marie Driscoll (55)
Trustee
 1988 to present
 President, Driscoll Associates (consulting firm);
Executive Fellow, Center for Business Ethics, Bentley College
 48
 Computer Rescue Squad;
Advisory Board, Center for Business Ethics, Bentley College;
Board of Governors, Investment Company Institute; Chairman, ICI Directors Services Committee
Edgar R. Fiedler (73)
Trustee
 2000 to present
 Senior Fellow and Economic Counsellor, The Conference Board, Inc. (not-for-profit business research organization)
 48
 None
Keith R. Fox (48)
Trustee
 2000 to present
 Managing Partner, Exeter Capital Partners (private equity funds)
 48
 Facts on File (school and library publisher);
Progressive (kitchen importer and distributor)
Louis E. Levy (69)
Trustee
 April
2002 to present

 Retired
 63
 Household International (banking and finance) (1992 to present);
ISI Family of Funds (four registered investment companies) (2000 to present)
Jean Gleason Stromberg (58)
Trustee
 2000 to present
 Consultant (1997 to present); prior thereto, Director, U.S. General Accounting Office (1996-1997); Partner, Fulbright & Jaworski (law firm) (1978-1996)
 48
 The William and Flora Hewlett Foundation
Jean C. Tempel (59)
Trustee
 1994 to present
 Managing Partner, First Light Capital (venture capital group)
 48
 United Way of Mass Bay;
Sonesta International Hotels, Inc.;
Northeastern University Funds and Endowment Committee;
Connecticut College Finance Committee;
Commonwealth Institute (not-for-profit start-up for women's enterprises);
The Reference, Inc. (IT consulting for financial services)
Carl W. Vogt (66)
Trustee
 April
2002 to present

 Member, Fulbright & Jaworski L.L.P. (law firm); formerly, President (interim) of Williams College (1999-2000); President, certain funds in the Deutsche Asset Management Family of Funds (formerly, Flag Investors Family of Funds) (1999-2000)
 63
 Yellow Corporation (trucking);
American Science & Engineering (x-ray detection equipment);
ISI Family of Funds (four registered investment companies)

Interested Trustees

Name, Age and Position(s) Held with the Fund
Length of Time Served
Principal
Occupation(s)
During Past 5 Years
Number of Portfolios in Fund Complex Overseen by Trustee
Other Directorships Held
Richard T. Hale1 (56)
Trustee and Vice President

 April
2002 to present
 Managing Director, Deutsche Asset Management
 220
 None

1 Mr. Hale is considered an "interested person" because of his affiliation with the fund's investment manager.

The fund's Statement of Additional Information ("SAI") includes additional information about the Trustees. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: 1-800-SCUDDER.

The following table presents information about each Officer of the Fund as of May 31, 2002. Each Officer's age is in parentheses after his or her name. Unless otherwise noted, the address of each Officer is c/o Deutsche Asset Management, Two International Place, Boston, Massachusetts 02110-4103. The President, Treasurer and Secretary each holds office until his or her successor is duly elected and qualified; all other officers hold offices in accordance with the By-Laws of the Fund. Each Officer of the Fund is an employee of the Fund's Advisor, Deutsche Investment Management Americas Inc., or an affiliate of the Advisor.

Officers

Name, Age and Position(s) Held with the Fund
Length of Time Served
Principal Occupation(s) During Past 5 Years
William F. Glavin, Jr. (43)
President
 2000 to present
 Managing Director, Deutsche Asset Management
Steven H. Boyd (31)
Vice President

 April 2002 to present
 Vice President, Deutsche Asset Management (1998 to present); prior thereto, analyst for Union Bank of Switzerland and municipal research analyst for ABN AMRO Securities
Richard T. Hale (56)
Vice President
 April 2002 to present
 Managing Director, Deutsche Asset Management
Gary R. Pollack (48)
Vice President
 April 2002 to present
 Director, Deutsche Asset Management
John Millette (39)
Vice President and Secretary
 1999 to present
 Vice President, Deutsche Asset Management
Daniel O. Hirsch (48)
Vice President and Assistant Secretary
 April 2002 to present
 Managing Director, Deutsche Asset Management (1998-present); prior thereto, Assistant General Counsel, Securities and Exchange Commission (1993-1998)
Gary L. French (50)
Treasurer
 January 2002 to present
 Managing Director, Deutsche Asset Management (2001 to present); prior thereto, President, UAM Fund Services, Inc.
John R. Hebble (43)
Assistant Treasurer
 1998 to present
 Senior Vice President, Deutsche Asset Management
Thomas Lally (34)
Assistant Treasurer
 2001 to present
 Senior Vice President, Deutsche Asset Management
Brenda Lyons (39)
Assistant Treasurer
 2000 to present
 Senior Vice President, Deutsche Asset Management
Caroline Pearson (40)
Assistant Secretary
 1997 to present
 Managing Director, Deutsche Asset Management (1997 to present); prior thereto, Associate, Dechert (law firm)


Investment Products and Services


Scudder Funds

Core
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Select 500 Fund
Scudder Small Company Stock Fund
Growth
Scudder 21st Century Growth Fund
Scudder Capital Growth Fund
Scudder Development Fund
Scudder Large Company Growth Fund
Scudder Select 1000 Growth Fund
Value
Scudder Large Company Value Fund
Scudder Small Company Value Fund*
Sector
Scudder Gold & Precious Metals Fund
Scudder Health Care Fund
Scudder Technology Innovation Fund
Asset Allocation
Scudder Pathway Conservative Portfolio
Scudder Pathway Moderate Portfolio
Scudder Pathway Growth Portfolio
Global/International
Scudder Emerging Markets Growth Fund
Scudder Emerging Markets Income Fund
Scudder Global Fund
Scudder Global Bond Fund
Scudder Global Discovery Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Pacific Opportunities Fund
The Japan Fund, Inc.*
Income
Scudder GNMA Fund
Scudder High-Yield Opportunity Fund
Scudder Income Fund
Scudder Short-Term Bond Fund
Tax-Free Income
Scudder California Tax-Free Income Fund*
Scudder High-Yield Tax-Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Tax-Free Fund
Scudder Medium-Term Tax-Free Fund
Scudder New York Tax-Free Income Fund*
Money Market
Scudder Cash Investment Trust
Scudder Money Market Series:
Prime Reserve Shares
Premium Shares
Managed Shares
Scudder Tax-Free Money Fund
Scudder U.S. Treasury Money Fund

* Class S shares only


Retirement Programs and Education Accounts

Retirement Programs
Traditional IRA
Roth IRA
SEP-IRA
Inherited IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Education Accounts
Education IRA
UGMA/UTMA
IRA for Minors

Closed-End Funds

The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder High Income Trust
Scudder Intermediate Government Trust
Scudder Multi-Market Income Trust
Scudder Municipal Income Trust
Scudder Strategic Income Trust
Scudder Strategic Municipal Income Trust
The Germany Fund
The New Germany Fund
The Central European Equity Fund

Scudder open-end funds are offered by prospectus only. For more complete information on any fund or variable annuity registered in your state, including information about a fund's objectives, strategies, risks, advisory fees, distribution charges, and other expenses, please order a free prospectus. Read the prospectus before investing in any fund to ensure the fund is appropriate for your goals and risk tolerance. There is no assurance that the objective of any fund will be achieved, and fund returns and net asset values fluctuate. Shares are redeemable at current net asset value, which may be more or less than their original cost.

A money market mutual fund investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market mutual fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.

The services and products described should not be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

Scudder Investor Services, Inc.


Account Management Resources


For shareholders of Scudder funds including those in the AARP Investment Program

Convenient ways to invest, quickly and reliably

Automatic Investment Plan
A convenient investment program in which money is electronically debited from your bank account monthly to regularly purchase fund shares and "dollar cost average" - buy more shares when the fund's price is lower and fewer when it's higher, which can reduce your average purchase price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase shares - use distributions from one Scudder fund to purchase shares in another, automatically (accounts with identical registrations or the same social security or tax identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically, avoiding potential mailing delays; money for each of your transactions is electronically debited from a previously designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck - even government checks - invested in up to four Scudder funds at one time.
* Dollar cost averaging involves continuous investment in securities regardless of price fluctuations and does not assure a profit or protect against loss in declining markets. Investors should consider their ability to continue such a plan through periods of low price levels.

Around-the-clock electronic account service and information, including some transactions

Automated Information Lines
Scudder Class S Shareholders:
Call SAIL™ - 1-800-343-2890
AARP Investment Program Shareholders:
Call Easy-Access Line - 1-800-631-4636
Personalized account information, the ability to exchange or redeem shares, and information on other Scudder funds and services via touchtone telephone.
Web Site
Scudder Class S Shareholders -
myScudder.com
AARP Investment Program Shareholders -
aarp.scudder.com
Scudder's Web sites allow you to view your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day.
The sites also provide prospectuses and applications for all Scudder funds, blank forms, interactive worksheets, news about Scudder funds, subscription to fund updates by e-mail, retirement planning information, and more.



Those who depend on investment proceeds for living expenses can enjoy these convenient, timely, and reliable automated withdrawal programs

Automatic Withdrawal Plan
You designate the bank account, determine the schedule (as frequently as once a month) and amount of the redemptions, and Scudder does the rest.
Distributions Direct
Automatically deposits your fund distributions into the bank account you designate within three business days after each distribution is paid.
QuickSell
Provides speedy access to your money by electronically crediting your redemption proceeds to the bank account you previously designated.

For more information about these services

Scudder Class S Shareholders:
Call a Scudder representative at
1-800-SCUDDER
AARP Investment Program Shareholders:
Call an AARP Investment Program representative at
1-800-253-2277

Please address all written correspondence to

For Scudder Class S Shareholders:
Scudder Investments
PO Box 219669
Kansas City, MO
64121-9669
For AARP Investment Program Shareholders:
AARP Investment Program
from Scudder Investments
PO Box 219735
Kansas City, MO
64121-9735


Notes



Notes


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