• Franklin Federal Intermediate-Term Tax-Free Income Fund • Franklin California Intermediate-Term Tax-Free   Income Fund • Franklin New York Intermediate-Term Tax-Free   Income Fund

If you are concerned about interest rate risk, but are willing to take on slightly more risk to potentially receive a higher yield than generally offered by shorter-term funds, you may want to consider a Franklin intermediate-term tax-free income fund. These funds maintain average portfolio maturities of three to ten years.

Count the Benefits

Potential for reduced interest rate risk. The funds' intermediate-term average maturities may help to reduce fund sensitivity to interest rate fluctuations compared to funds with longer average maturities.

Competitive taxable-equivalent yields. For investors in the 25% or higher federal tax bracket, the funds' tax-free income¹ may equate to higher taxable-equivalent yields than taxable fixed income alternatives with comparable maturities.

Experienced, professional management. With over 25 years' experience in tax-free investing and over $50 billion in municipal assets under management,² Franklin is the largest municipal bond fund manager in the U.S.³

What Are the Risks?

Because municipal bonds are particularly sensitive to interest rate movements, a fund's yield and share price will fluctuate with market conditions. Bond prices, and thus a fund's share price, generally move in the opposite direction of interest rates. As the prices of bonds in a fund adjust to a rise in interest rates, the fund's share price may decline. A fund with investments concentrated in a single state is subject to greater risks of adverse economic and regulatory changes in that state than a fund with a broader geographical diversification. These and other risks are detailed in the fund's prospectus.

Intermediate-Term Tax-Free Income Funds To view the literature or order online, click the button below.

Important Tax Information
Franklin Federal Intermediate-Term Tax-Free Income Fund.For investors subject to alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. Dividends are generally subject to state and local taxes, if any. Franklin California Intermediate-Term Tax-Free Income Fund. For investors subject to alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. Franklin New York Intermediate-Term Tax-Free Income Fund. Although the fund has the ability to invest up to 20% of its assets in bonds with income subject to alternative minimum tax, its current exposure to such bonds is 0%. Distributions of capital gains are generally taxable.
Footnote
1.	Franklin intermediate-term tax-free income funds seek income free from federal, and depending on the fund state and local income taxes. Distributions of capital gains are generally taxable.
2.	As of 12/31/04.
3.	Source: Strategic Insight, as of 12/31/04. Based on long-term tax-free income fund assets.
Important Legal Information
Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. For a Franklin Federal Intermediate-Term Tax-Free Income Fund, Franklin California Intermediate-Term Tax-Free Income Fund or Franklin New York Intermediate-Term Tax-Free Income Fund prospectus that contains this and other information, contact your financial advisor or download a free prospectus. Please carefully read the prospectus before investing.