(1) The governing body of a city in which a special improvement district is located may invest interest and sinking fund money of the district in time deposits of a bank, savings and loan association, or credit union insured by the federal deposit insurance corporation or by the national credit union administration or invested in direct obligations of the United States government payable within 180 days from the time of investment.
(2) All interest collected on deposits or investments must be credited to the sinking fund from which the money was withdrawn.