Tax-free money market funds continued to suffer the effects of strong seasonal outflows — yet posted the highest losses of the previous three years — as investors withdrew $5.58 billion from industry, leaving total net assets at $263.91 billion, according to The Money Fund Report, a service of iMoneyNet.com.

The outflows are by far the largest so far this year and compare to last week when $3.63 billion exited the industry and total net assets settled at $269.49 billion in conjunction with the arrival of the filing deadline for federal income taxes for individuals and corporations.

The heavy losses are largely consistent -- yet slightly higher -- than the typically-strong seasonal outflows that have occurred over the last three years in early spring – particularly in April around tax time, and amid historically-low yields, according to Mike Krasner, managing editor of iMoneyNet Inc.

For instance, last year in the week ended April 23, investors withdrew $3.77 billion from tax-exempt money market funds as total net assets settled at $276.92 billion on the heels of income tax season when the seven-day yield was at 0.02%, but had remained at 0.01% for the 31 weeks prior to April 30, according to data provided by iMoneyNet.com. Those weekly losses came following $3.24 billion of outflows in the week ended April 16, 2012, and ahead of $4.8 billion of outflows in the week ended April 30, 2012.

Meanwhile, over the same period in the two prior years, the tax-exempt money funds lost $5.17 billion in the week ended April 25, 2011 when the seven-day yield was at 0.03%, and $4.44 billion for the week ended April 26, 2010, when the seven-day yield ended at 0.04%.

Back to this year, even though the average seven-day yield for the 425 reporting tax-exempt money funds increased to 0.02% from 0.01% compared to last week, investors still upheld seasonal outflow patterns, Krasner noted. In addition, the average maturity decreased by one day to 28 days compared to last week.

Switching gears to the taxable money market, total net assets rose by $4.75 billion to $2.314 trillion in the week ended April 23, on the heels of $22.99 billion of outflows in the prior week when total net assets settled at $2.309 trillion.

The average, seven-day simple yield for the 1,028 taxable money funds was unchanged at 0.02% from the previous week, while the average maturity fell one day to 48 days.

Overall, the combined total net assets of the 1,453 reporting money funds declined by $831.7 million in the week ended April 23 to $2.578 trillion. That compares to the prior week when outflows of $26.62 billion caused total net assets to end at $2.579 trillion.