Vanguard Money Market Funds · 497 · On 11/27/96

Filed On 11/27/96   ·   SEC File 2-52698   ·   Accession Number 893220-96-1975

Definitive Material   ·   Rule 497
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 497         Vmmr Prime Portfolio Fund Profile                      6     17K 

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Fund Profile
for 

VANGUARD

MONEY MARKET RESERVES 
--------------------- 
PRIME PORTFOLIO 

December 2, 1996

The Prime Portfolio is part of
Vanguard Money Market Reserves, 
which also includes the Federal Portfolio.

A Member of 
THE VANGUARD GROUP

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1     OBJECTIVE                                                                 

Vanguard Money Market Reserves-Prime Portfolio seeks to provide maximum current 
income while preserving your investment and protecting your ability to convert  
to cash when needed.* The Portfolio may not meet this objective.                

2     INVESTMENT STRATEGIES                                                     

The Prime Portfolio invests in high-quality money market obligations issued by  
banks and other financial institutions, nonfinancial corporations, and the U.S.,
state, and municipal governments and their agencies.                            

The Portfolio seeks an average maturity of 90 days or less, and maintains the   
following quality ratings:                                                      

MONEY MARKET                           MINIMUM                          
OBLIGATIONS                      QUALITY RATINGS **                     
---------------------------------------------------                     
Certificates of Deposit (CDs)            A-1                            
Commercial Paper                                                        
(short-term promissory notes)         Prime-1                         
Short-Term Corporate Obligations         Aa3                            

3     RISKS                                                                     

Investors in the Portfolio are exposed to . . .                                 

o A VERY LOW degree of interest rate risk because the short-term nature of the  
  Portfolio's investments tends to minimize the impact of interest rate changes.

o A HIGH degree of income risk (the possibility that the Portfolio's income will
fluctuate when interest rates change).                                      

o A LOW degree of credit risk (the possibility that the issuer of a money market
instrument will fail to repay interest and principal) because of the        
high quality of the Portfolio's securities.                                 

*  An investment in a money market fund is neither insured nor guaranteed by    
the U.S. Government, and there is no assurance that the fund will be able 
to maintain a stable net asset value of $1.00 per share.                  

** As rated by Moody's Investor Service, Inc.                                   

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4     APPROPRIATENESS                                                           

This Portfolio may be suitable for investors who . . .                          

o    Are seeking a market rate of income in very short-term securities.         

o    Want to protect the value of their investment.                             

o    Have short-term goals or need a temporary place to hold money.             

The Portfolio is not suitable for investors who . . .                           

o    Want a steady level of income.                                             

o    Are seeking capital growth.                                                

5     FEES AND EXPENSES                                                         

The Prime Portfolio--like all Vanguard Funds--is offered on a pure no-load      
basis (that is, the Portfolio has no 12b-1 fees or charges to buy or sell       
shares).                                                                        

The Portfolio's operating expenses are deducted from its total assets before    
daily share prices and income distributions are calculated.  The Portfolio's    
expense ratio for fiscal year 1995 was 0.32% of assets.                         

ANNUAL FUND OPERATING EXPENSES                                          
----------------------------------------------------                    
Investment Advisory Fees...................... 0.01%                    
Distribution Costs............................ 0.03                     
Other Expenses................................ 0.28                     
                          ----
Total Operating Expenses ..................... 0.32%                    
                          ====

The following example illustrates the expenses that you would incur on a $1,000 
investment over various periods, assuming (1) a 5% annual rate of return and (2)
redemption at the end of each period.                                           

1 YEAR         3 YEARS        5 YEARS       10 YEARS                    
----------------------------------------------------                    
$3             $10            $18            $41                    

This example should not be considered a representation of past or future        
expenses or performance.  Actual expenses may be higher or lower than those     
shown.                                                                          

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6     PAST PERFORMANCE                                                          

PERFORMANCE 
ACTUAL RETURNS (%) 1986-1995  

                        LIPPER
    VANGUARD            NON-GOVERNMENT
    PRIME               MONEY MARKET
    PORTFOLIO             FUNDS AVERAGE+
    ---------             --------------

1986                       6.6                     6.3                          
1987                       6.6                     6.1                          
1988                       7.6                     7.0                          
1989                       9.4                     8.8                          
1990                       8.3                     7.8                          
1991                       6.1                     5.7                          
1992                       3.7                     3.3                          
1993                       3.0                     2.6                          
1994                       4.1                     3.7                          
1995                       5.8                     5.4                          

 PERFORMANCE SUMMARY
(PERIODS ENDED SEPTEMBER 30, 1996)

AVERAGE ANNUAL TOTAL RETURN     
PRIME             LIPPER      
PORTFOLIO          AVERAGE+     
---------------------------------------------------                             
1 Year                    5.4%               4.9%                               
---------------------------------------------------                             
5 Years                   4.4%               3.9%                               
---------------------------------------------------                             
10 Years                  6.0%               5.5%                               

Performance figures include the reinvestment of all dividends. All returns are  
net of expenses. The performance data quoted represent past performance; future 
returns will fluctuate.                                                         

Annualized current yield for the
seven-day period ended September 30, 1996:

5.21% 

For the latest yield, call Vanguard at

1-800-662-7447

The average annualized current yield represents the Portfolio's average income  
less all expenses for the seven-day period, annualized by 365 days and          
divided by the average total net assets over the same period.                   

+Lipper Non-Government Money Market Funds Average is an industry benchmark of   
non-government money market funds with similar investment objectives and        
policies, as measured by Lipper Analytical Services, Inc.                       

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7     INVESTMENT ADVISER                                                        

The Portfolio is managed by Vanguard Fixed Income Group, which manages total    
assets of some $77 billion.                                                     

John Hollyer, Principal of Vanguard, has managed the Portfolio since 1989.      

8     PURCHASES                                                                 

You may purchase shares by mail, wire, or exchange from another Vanguard Fund.  
The minimum initial investment is $3,000 ($1,000 for IRAs and custodial accounts
for minors).                                                                    

9     REDEMPTIONS                                                               

You may redeem shares by writing a check ($250 minimum), sending a letter to, or
calling Vanguard.                                                               

10    DISTRIBUTIONS                                                             

Dividends are declared each business day and are paid on the first business day 
of each month. Dividend distributions can be automatically reinvested or        
received in cash. Dividend distributions are taxable to you whether reinvested  
in additional shares or received in cash.                                       

11   OTHER SERVICES                                                             

o    Free checkwriting.                                                         

o    Vanguard Fund Express(R)--electronic transfers between your bank account   
and the Portfolio.                                                    

o    Vanguard Tele-Account(R)--around-the-clock access to Vanguard Fund         
information, account balances, and some transactions by calling       
1-800-662-6273 (ON-BOARD).                                            

o    Investor Information--toll-free access to Vanguard Associates by calling   
1-800-662-7447 (SHIP).                                                

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THIS FUND PROFILE CONTAINS KEY INFORMATION ABOUT THE PORTFOLIO. IF YOU WOULD
 LIKE MORE INFORMATION BEFORE YOU INVEST, PLEASE CONSULT THE PORTFOLIO'S
 ACCOMPANYING PROSPECTUS. FOR DETAILS ABOUT THE PORTFOLIO'S HOLDINGS OR RECENT
INVESTMENT STRATEGIES, PLEASE REVIEW THE PORTFOLIO'S MOST RECENT ANNUAL OR
SEMI-ANNUAL REPORT. THE PROSPECTUS AND REPORTS MAY BE OBTAINED AT NO COST BY
 CALLING 1-800-662-7447.

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THE VANGUARD GROUP

1296-42M    (C) 1996 Vanguard Marketing Corporation, Distributor           FP30 

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 497 Filing		Date		First		Last			Other Filings
		9/30/96		4
Filed On / Filed As Of		11/27/96
		12/2/96		1					485BPOS
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