7-3-1319. Deposit of funds with depository banks. (1) All funds received by the treasurer must be deposited in the designated banks in the name of the municipality, subject to the order of the treasurer, and must be distributed among the designated banks as nearly as may be in proportion to the maximum amounts that they have been authorized to receive by the commission.

(2) Banks designated as depositories shall pay interest on daily balances of municipal funds at a rate approved by the commission, which may not be less than 2 1/2%. The interest due on the deposits must be paid to the treasurer by check on the last day of each quarter of the fiscal year. If the treasurer receives or has in any bank funds that will probably remain on deposit 3 months or longer, the treasurer may, with the approval of the commission, either take certificates of deposit from a designated depository, payable to the treasurer's order on demand and bearing a higher rate of interest, or invest the funds in any bonds maturing within 6 months in which the sinking fund of the municipality may be invested. The treasurer shall make a monthly statement to the director of finance of the municipal funds in each bank and the interest received as of the last day of each month.

(3) A bank receiving funds of the municipality on deposit may not pay out the money except upon checks drawn upon that bank signed by the treasurer.