Schwab Sweep Money Market Fund Yields

PLEASE READ THE IMPORTANT DISCLOSURES BELOW
Performance data quoted represents past performance and does not indicate future results.

Schwab Sweep Money Funds are designed for use in conjunction with certain Schwab accounts. Clients who qualify can designate a sweep money fund as their account’s primary fund. Uninvested cash balances will be invested automatically in that primary fund, according to the terms and conditions of their account agreement. Similarly, when you use your account to purchase other investments or make payments, shares of your primary fund will be sold automatically to cover those transactions.

1. Schwab and the investment advisor have agreed to limit the "net operating expenses" as stated in the prospectus for each fund, for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the fund's Board of Trustees. The limitation excludes any non-routine expenses, such as taxes, expenses for dividends, and interest paid on securities sold short, which may result in a fund incurring net operating expenses above the limitation.

Expense ratios for certain Schwab Money Market Funds may reflect a non-routine expense as a result of participation in the U.S. Treasury Temporary Guarantee Program.
2. Dividends from the Schwab Municipal Money Fund™ and the state specific funds typically are exempt from federal income tax; dividends from states specific funds typically are exempt from the respective state’s income tax as well. A portion of these funds’ income, however, may be subject to the federal alternative minimum tax (AMT). Dividends from the Schwab AMT Tax-Free Money Fund™, on the other hand, typically are exempt from federal income tax, including AMT.
3. Due to unprecedented conditions in the U.S. Treasury securities market, the Schwab U.S. Treasury Money fund is closed to new accounts effective Monday, December 22, 2008 at 12:01 a.m. PT. The Fund will continue to accept additional investments from existing account holders who have selected the Fund as their sweep feature. Schwab anticipates re-opening the Fund when market conditions stabilize.
4. Schwab and the investment adviser have voluntarily waived and/or reimbursed expenses in excess of their current contractual commitment in an effort to maintain certain net yields for the fund. These voluntary waivers and reimbursements may be modified or terminated at any time, and are subject to future recapture by Schwab and the investment adviser. Fee waivers and/or expense reimbursements (whether contractual or voluntary) have the effect of increasing the fund's net yield and without such fee waivers and/or expense reimbursements, the fund's 7-day yield would have been lower. Please see the prospectus for more details.

An investment in a money market fund is neither insured nor guaranteed by the FDIC or any other government agency. Yields will fluctuate, and although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund. The 7-day yields more closely reflect the current earnings of the fund than the total return.

Trades in no-load mutual funds available through Mutual Funds OneSource service (including Schwab Funds) as well as certain other funds, are available without transaction fees when placed through schwab.com or our automated phone channels. For each of these trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Funds are also subject to management fees and expenses.

Distributor: Charles Schwab & Co., Inc. 101 Montgomery Street, San Francisco, CA 94104