AMENDMENT TO INVESTMENT MANAGEMENT CONTRACT


                  THIS AMENDMENT TO INVESTMENT MANAGEMENT CONTRACT is made as of
July 20, 2006, by and between INSTITUTIONAL DAILY INCOME FUND, a Massachusetts
business trust (the "Fund"), on behalf of the U.S. Treasury Portfolio, the Money
Market Portfolio, and the Municipal Portfolio and REICH & TANG ASSET MANAGEMENT,
LLC (the "Manager").

                                   WITNESSETH:

                  WHEREAS, the Fund and the Manager are parties to an Investment
Management Contract dated as of October 30, 2000 (the "Management Contract"),
pursuant to which the Manager serves as the investment manger for the Fund's
portfolios; and

                  WHEREAS, the Fund and Manager desire to amend the Management
Contract to render such investment management services to the U.S. Government
Portfolio of the Fund; and

                  WHEREAS,  all references to the defined term "Portfolios" in
the Management  Contract shall now include the U.S. Government Portfolio; and

                  WHEREAS, the Management Contract, as expressly amended hereby,
shall continue in full force and effect.

                  NOW, THEREFORE, the parties hereby agree as follows:

1. Paragraph 6 of the Management Contract is hereby amended to include the
following text after the last sentence:

                           "With respect to the U.S. Government Portfolio only,
                           this Agreement will become effective on July 20, 2006
                           and shall continue in effect until March 31, 2008,
                           and thereafter for successive twelve-month periods
                           (computed from each April 1st), provided that such
                           continuation is specifically approved at least
                           annually by our Board of Trustees or by a majority
                           vote of the holders of the outstanding voting
                           securities of each respective Portfolio voting
                           separately, as defined in the 1940 Act and the rules
                           thereunder, and, in either case, by a majority of
                           those of our directors who are neither party to this
                           Agreement nor, other than by their service as
                           directors of the corporation, interested persons, as
                           defined in the 1940 Act, of any such person who is
                           party to this Agreement. Upon the effectiveness of
                           this Agreement, it shall supersede all previous
                           Agreements between us covering the subject matter
                           hereof. With respect to each Portfolio, this
                           Agreement may be terminated at any time, without the
                           payment of any penalty, (i) by vote of a majority of
                           the outstanding voting securities of each respective
                           Portfolio voting separately, as defined in the 1940
                           Act and the rules thereunder, or (ii) by a vote of a
                           majority


                           of our entire Board of Trustees, on sixty days'
                           written notice to you, or by you on sixty days'
                           written notice to us."

The Distributor will in its sole discretion determine the amount of any payments
made by the Distributor pursuant to this Agreement; provided, however, that no
such payment will increase the amount which the Portfolio, on behalf of the
Investor Class, Investor Service Class and Retail Class shares, is required to
pay either the Distributor under this Agreement of the Shareholder Servicing
Agreement or to the Manager under the Investment Management Contract, the
Administrative Services Agreement, or otherwise.

                  IN WITNESS WHEREOF, the parties hereto have executed this
AMENDMENT TO INVESTMENT MANAGEMENT CONTRACT as of the day and year first above
written.

                                     INSTITUTIONAL DAILY INCOME FUND




                                     By:/s/Rosanne Holtzer
                                      Name:Rosanne Holtzer
                                     Title:Secretary

                                     REICH & TANG ASSET MANAGEMENT, LLC


                                     By:/s/Richard De Sanctis
                                      Name:Richard De Sanctis
                                     Title:Executive Vice President and Chief
                                           Compliance Officer