All money belonging to the state or to any county, city, town, village or other subdivision therein, except as herein otherwise provided, shall, whenever practicable, be deposited in a national bank or banks or in a bank or banks incorporated under the laws of this state; provided, that the bank or banks in which such money is deposited shall furnish security to be approved as provided by law; and provided further, that such bank or banks shall pay the same rate of interest on any money so deposited therein on time certificates of deposit by the legal custodian or custodians of any such public moneys as such bank or banks pay on time certificates of deposit of private depositors, and the custodian or custodians of any such public moneys shall be authorized to deposit same under time certificates of deposit as may be provided by law. Such interest shall accrue to the fund from which it is derived.