PUTNAM DAILY DIVIDEND TRUST
                                    
              PROSPECTUS SUPPLEMENT DATED FEBRUARY 1, 1994
     TO THE PROSPECTUS DATED MARCH 1, 1993, AS REVISED JULY 1, 1993

(1)  The section entitled "Basic investment strategy" is replaced
by the following:

BASIC INVESTMENT STRATEGY

THE FUND INVESTS IN A PORTFOLIO OF HIGH-QUALITY MONEY MARKET
INSTRUMENTS.  EXAMPLES OF THESE INSTRUMENTS INCLUDE: 

    o    BANK CERTIFICATES OF DEPOSIT (CD'S): negotiable
         certificates issued against funds deposited in a
         commercial bank for a definite period of time and
         earning a specified return.

    o    BANKERS' ACCEPTANCES: negotiable drafts or bills of
         exchange, which have been "accepted" by a bank,
         meaning, in effect, that the bank has unconditionally
         agreed to pay the face value of the instrument on
         maturity.

    o    PRIME COMMERCIAL PAPER: high-grade, short-term
         obligations issued by banks, corporations and other
         issuers.

    o    CORPORATE OBLIGATIONS: high-grade, short-term corporate
         obligations other than prime commercial paper.

    o    MUNICIPAL OBLIGATIONS: high-grade, short-term municipal
         obligations. 

    o    U.S. GOVERNMENT SECURITIES: marketable securities
         issued or guaranteed as to principal and interest by
         the U.S. government or by its agencies or
         instrumentalities.

    o    REPURCHASE AGREEMENTS: with respect to U.S. Treasury or
         U.S. Government agency obligations.

The Fund will invest only in high-quality securities that Putnam
Management believes present minimal credit risk.  High-quality
securities are securities rated at the time of acquisition in one
of the two highest categories by at least two nationally
recognized rating services (or, if only one rating service has
rated the security, by that service) or if the security is
unrated, judged to be of equivalent quality by Putnam Management. 
The Fund will maintain a dollar-weighted average maturity of 90
days or less and will not invest in securities with remaining
maturities of more than 397 days.  The Fund follows investment
and valuation policies designed to maintain a stable net asset
value of $1.00 per share.  There is no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per
share.

(2)  The section "About Your Investment -- How to Buy Shares --
Contingent Deferred Sales Charge on Class B Shares" is
supplemented as follows:

Up to 12% of the value of Class B shares subject to a Systematic
Withdrawal Plan may also be redeemed each year without a CDSC. 
See the Statement of Additional Information.