Most G4S cash stays in demand deposit accounts (DDAs). For the rest, "we're staying the shortest we've ever been," Cappelletti says. "We don't want to take the risk of going out the yield curve, and frankly there's little reward for doing so." There are few alternatives to bank deposits, Treasuries and money funds. "We haven't seen any innovative products in a long time," he says.

G4S placed a token $7 million in FICA, Cappelletti says. "We're testing the product. It has been returning 40 basis points, but that's going down to 37. For an FDIC-insured product, that's pretty good. If they continue to do well, we'll probably increase our investment to their $24 million cap." G4S gets 50 basis points in earnings credit from its banks, but once the banks subtract the FDIC insurance charge, the net value is about 37 basis points, he adds—and banks are threatening to reduce the earnings credit rate (ECR).

It's also "safety first" at Wakefern Food Corp., a privately held multibillion-dollar food cooperative that supplies ShopRite supermarkets, says Ken Grogan, manager of treasury services. That means keeping balances in no-interest DDAs to get the earnings credit. Because of policy restrictions on concentrations in any one bank or product, Wakefern, based in Keasbey, N.J., can't keep enough in some of its banks to fully cover its fees, Grogan explains. After the ECR is exhausted, Wakefern invests in prime, government and Treasury money funds, he says.

Wakefern is typical. The most common corporate investment strategy has been to keep cash in non-interest-bearing bank accounts to qualify for unlimited FDIC insurance and take advantage of earnings credits to cover fees, Lansky reports. But banks are passing along the cost of FDIC insurance for these deposits, lowering the ECR, and some are reducing the ECR outright, he notes. Bank of New York Mellon announced potential interest charges for deposits over $50 million in trust and custody (but not treasury) accounts.

Now that Reg Q has expired, companies can earn interest on DDA balances, but if they opt for interest, FDIC coverage is limited to $250,000. Through 2012, coverage is unlimited on DDA balances that don't earn interest. Negligible rates have made the historic end of Reg Q a non-event for now, Gallanis says.

Historically low returns still matter, and taking a mattress approach abdicates treasury responsibility, argues investment manager Lee Epstein, CEO of Decision Analytics in San Francisco. "Since 2008, corporate treasury investors seem frozen like deer in headlights, afraid to take any risk," Epstein charges. "Boards, frightened by what happened then, clamped down unreasonably on cash investment, and that hasn't changed.

"I talked recently to one assistant treasurer who was buying nothing but Treasury bills with less than 30 days to maturity and accepting a return of 1 to 2 basis points," he adds. "For large amounts of cash, that is a tremendous sacrifice."

Some treasuries are trying to avoid that sacrifice. But with puny yields across the board, is the cost of paying active managers justified? Yes, says Steve Everett, director of balance sheet and operating assets at Northern Trust. But instead of traditional zero- to two-year maturities, he suggests using three- to five-year securities for an investment strategy with a weighted average life of 60 days to 1.75 years.

"It's hard to add material value over cash with a portfolio under one-year weighted average maturity," Everett says. The danger involved in extending maturities—rising interest rates—now seems unlikely. "Treasury investors are starting to feel comfortable that rates won't spike, so they're more willing to extend maturities," he notes.

Bill Maw, CFO of Liquidnet, a New York City-based electronic platform for institutional trading, insists that yield still matters and using outside investment managers is the way to get it. His three outside managers are bringing in returns of about 75 basis points, net of fees, on more than $100 million of excess cash, compared to the 12 to 40 basis points he's seeing on the highly liquid cash the company keeps in bank accounts and money market funds.

The three outsourced accounts follow Liquidnet's investment policy, have an average weighted maturity of nine months and consist largely of A-rated domestic corporate fixed-income securities, Maw says. It takes at least $10 million to attract a manager for a separate (not pooled) account, he says. All the funds provide same- or next-day liquidity, but loss of principal could occur if investments were liquidated quickly, he concedes.

With returns so low, companies are finding other uses for cash, such as doing more mergers and acquisitions, boosting dividends and buying back stock, Gallanis says. And they're making operational improvements.

"Treasurers are looking at a return of maybe 8 basis points on investments vs. spending the money on a project that will bring a much better return through cost reductions," he says. "We're definitely seeing more projects."

For an earlier look at short-term investing, see New Game of No TAG.

And for a look at changes in regulations regarding interest on corporate accounts, see Response Tepid as End of Reg Q Nears.