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For the second time in a week, a multibillion-dollar money market fund has been forced to take extraordinary steps to deal with sudden cash withdrawals by nervous institutional investors.

Putnam Investments, one of the oldest names in the mutual fund industry, announced Thursday that it is closing and liquidating its Putnam Prime Money Market Fund, a $12.3 billion fund that serves only professional investors. The action does not affect Putnam money funds that are sold to retail investors.

But the unusual step shows just how jittery investors — especially the professional ones — have suddenly become about a type of investment that was long considered to be as risk-free as a bank checking account.

The Investment Company Institute, an industry trade association, said Thursday that the funds serving institutions shrank by more than $173 billion, to $2.17 trillion, in the week that ended Wednesday — the worst decline ever among institutional money funds.

The net decline of $169 billion left a total of $3.41 trillion invested in all money funds, or 4.7 percent less than had been in those funds a week earlier, before the current tremors hit.

By contrast, retail investors appear to still see money market funds as safe havens. The money funds serving retail customers actually grew by $4.28 billion, to $1.24 trillion, over the same seven-day period.

Professional investors were clearly alarmed when The Reserve Fund, a company whose founder helped invent money funds in the mid-1970s, announced that losses on its stake in Lehman Brothers had pushed the share price of its institutional fund to 97 cents.

It was only the second time that any money fund’s shares have fallen below a dollar, known as “breaking the buck.” That unofficial floor, while not guaranteed by any prospectus or regulation, had become an article of faith among money fund investors, who assumed that each dollar invested in a money fund would always retain its full value.

Institutions were so concerned that almost $60 billion was pulled from The Reserve Fund during the week, according to data from AMG Data Services, an industry research service. Those withdrawals would account for more than 40 percent of the total weekly drop in money fund assets.

And late Thursday afternoon, the company unexpectedly said that it was imposing new rules and limits on all 18 money funds listed on its Web site, not just the fund that broke the buck on Tuesday. Investors, for example, will have to wait seven days to withdraw money from any of the 18 funds.

Institutional investors were further rattled Thursday when a fund operated by Bank of New York Mellon — not a money market fund, but an account that holds cash collateral for certain customers — confirmed that its per-share value had briefly dipped to 99 cents. It attributed the drop to losses on Lehman securities, which it said were subsequently segregated in a different account.