Grass clippings insulate the soil in cool weather, keep the soil cool and moist in hot weather, and help conserve water. Furthermore, as the organic matter decays, it provides nutrients for beneficial microbes in the soil. Grass clippings also help control weeds, they are a very cheap mulch, and they decompose and add nitrogen to the soil.
I love using grass clippings as mulch, but there are some words of caution. While in the cool weather months it is ok to put grass clippings directly on beds, as the weather warms, it is best to compost the grass a little before you put it on the beds to let some of the heat of decomposition out before applying it around your plants. When grass clippings are composted, they allow air and water into the soil. The clippings don’t mat-up; they decompose nicely. To dry grass clippings, just spread out the grass clippings in the sun. When dry, loosely mulch near–but not touching plants. An inch of mulch is adequate, but never more than 3 inches of any mulch is needed. Also, it should go without saying (but I am going to anyway), make sure your grass clippings are not chemically treated…so if you use commercial lawn treatments, you cannot use your grass clippings as mulch in your vegetable garden or around anything edible.
Throughout the season as you change out plants from spring, to summer to fall planting, simply till the grass clippings into your bed soil for additional organic material an soil lightening.
Commercial chip mulch is usually chemically treated and it is expensive (up to $15 per bag). Why not save money, save space at the yard waste processing plants and add nutrients to your garden by using your grass clippings as mulch and fertilizer?