Putnam Municipal Income Fund

The Putnam fund Trustees have approved in principle the merger of Putnam
Municipal Income Fund into Putnam Tax-Free High Yield Fund, which seeks
high current income exempt from federal income tax by investing in a
combination of lower-rated and investment-grade securities, with
approximately 40% of its portfolio currently in lower-rated securities.
For more information about Putnam Tax-Free High Yield Fund, please call
1-800-354-4000 for a prospectus.  Completion of the merger is subject to
a number of conditions, including final approval by the fund's Trustees
and approval by shareholders of the fund at a shareholder meeting
expected to be held within approximately the next six months.  Putnam
Municipal Income Fund does not expect to accept new accounts after
November 15, 2004.

Note: The foregoing is not an offer to sell, nor a solicitation of an
offer to buy, shares of any fund, nor is it a solicitation of a proxy.
To receive a free copy of the prospectus/proxy statement relating to a
proposed merger (which contains important information about fees,
expenses and risk considerations) after a registration statement has
been filed with the SEC and becomes effective, please call
1-800-225-1581. The prospectus/proxy statement will also be available
without charge on the SEC's website (www.sec.gov). Read the
prospectus/proxy statement carefully before making any investment
decisions.

               *****************************

Putnam Tax-Free High Yield Fund

The Putnam fund Trustees have approved in principle the merger of Putnam
Municipal Income Fund into Putnam Tax-Free High Yield Fund.  For more
information about the proposed merger, please call 1-800-354-4000.
Completion of the merger is subject to a number of conditions, including
final approval by the fund's Trustees and approval by shareholders of
Putnam Municipal Income Fund at a shareholder meeting expected to be
held within approximately the next six months.

Note: The foregoing is not an offer to sell, nor a solicitation of an
offer to buy, shares of any fund, nor is it a solicitation of a proxy.
To receive a free copy of the prospectus/proxy statement relating to a
proposed merger (which contains important information about fees,
expenses, and risk considerations) after a registration statement has
been filed with the SEC and becomes effective, please call
1-800-225-1581. The prospectus/proxy statement will also be available
without charge on the SEC's Web site (www.sec.gov). Read the
prospectus/proxy statement carefully before making any investment
decisions.