Some money-market funds that invest mostly in Treasurys are closing their doors to new investors as low yields on government securities drag down their yields.

As the credit crisis and market volatility send investors flocking to the safety of Treasurys, yields on the government debt have fallen drastically and several Treasury funds have barred new investors. Some funds also have cut their fees to keep their yields in reasonable territory.

If the Federal Reserve moves to further cut interest rates, the possibility of “negative yields” exists, some experts said. More funds may be forced to turn back investments or waive expenses, and the difficult conditions could cause some smaller fund complexes to reconsider whether they want to remain in the money-market-fund business.

Treasury’s three-year note yielded 1.245% Wednesday after a $28 billion three-year note auction. In a sign of how much investors currently value safety, the Treasury Department sold more than $30 billion in four-week bills Tuesday at a yield of zero for the first time.

As of Dec. 1, Evergreen Institutional 100% Treasury Money Market Fund closed to new investors until further notice. In light of the current low yields in the Treasury market, the money manager determined that it was appropriate to close the fund to protect shareholders’ interests, said Laura Fay, a spokeswoman for Evergreen Investments, the investment management arm of Wachovia Corp.

A negative yield on your money is a real possibility, so you will be paying the government for the use of your money.  That will not last long and if everyone pulls their money from the treasuries, the economy will get even worse than it is now.