Money market rates are so low these days that under the mattress is such a poor choice these days. Vanguard Prime is currently paying .01% through the first quarter of 2010
But rates will probably remain soft at least through the transition of new liquidity rules for money market accounts being proposed by the SEC, the WSJ reports.
The new rules will require funds to shorten the average maturities of their holdings, restricting, among other things, the maximum weighted average maturity of a fund’s portfolio to 60 days from 90 days. Funds also will have to maintain a minimum of 10% of assets in securities that mature in one day and 30% in securities that mature in one week.