Cash is flowing into short-term U.S. government debt funds at the fastest pace in more than six months, just when you might expect investors to be running for the exits.

Demand is surging even as lawmakers wrangle with a looming debt-ceiling deadline and investors become concerned about the Treasury missing payments on the securities held in most of the funds. More than $75 billion was deposited in government money-market funds in the four weeks ended Aug. 16, compared with outflows of about $18.5 billion from U.S. exchange-traded and mutual funds, Investment Company Institute data show.

Whether investors are seeking a refuge from geopolitical risks or having cold feet over the sustainability of the record rally in stocks, they're benefiting from safeguards put in place in October to prevent a repeat of the run on money-market funds experienced during the financial crisis. The changes prompted a shift of more than $1 trillion to government funds from what are known as prime funds by more risk-tolerant investors in the run-up to the reforms.