Money market funds typically pay monthly dividends from the income produced by their portfolio investments. Because these funds own only short-term securities, which are normally held to maturity, they are not designed to generate capital gains or losses. Whether the income dividends they pay are taxable depends on the fund's holdings. Money market funds that invest in municipal securities produce income that is generally not subject to federal income tax and, in a state-specific fund, may also be exempt from state and local taxes.

Bond funds typically generate higher levels of income dividends than money market funds (which again may be taxable in whole or in part, depending on the fund's holdings). However, because the prices of bonds fluctuate in response to changing interest rates, and also are subject to higher degrees of credit risk. Also it is possible to receive taxable capital gain distributions from bond funds, even from tax-exempt bond funds.

Stock funds may pass along ordinary income from dividends paid by stocks held in the fund as well as from capital gains from the sale of stocks. Because stock prices have the potential to fluctuate considerably, you are generally more likely to realize a larger capital gain or loss when selling shares of a stock mutual fund than when selling shares of bond funds.

An investment in a money market 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 a money market fund. As a measure of current income, seven-day yield is more reflective of the fund's income generating ability than total return.

Short-term corporate, asset-backed and municipal securities holdings (where applicable), while rated in the highest rating category by one or more NRSRO (or if an unrated municipal, deemed of comparable quality by Dreyfus), involve credit and liquidity risks and risk of principal loss.

This information is general in nature and is not intended to constitute tax advice. Always consult your tax advisor for more detailed information on tax issues and advice on your specific situation.

Investors should consider the investment objectives, risks, charges, and expenses of a fund carefully before investing. Download a prospectus that contains this and other information about a fund, and read it carefully before investing.

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