N.J. Stat. § 52:18-16.1
The State Treasurer shall, except as otherwise provided, deposit to his credit as treasurer all public moneys coming into his hands, within 3 days after receiving the same, in such of the national banks located in this State, in institutions authorized by this State to carry on a banking or savings and loan business, and in the State of New Jersey Cash Management Fund established pursuant to section 1 of this amendatory and supplementary act as he may select, that will allow interest on all balances. In so doing, the treasurer shall from time to time, by public notice, offer at auction State deposits and invite tenders therefor subject to such terms and conditions as he may prescribe. All interest earned on deposits shall be credited to the State. When in the judgment of the State Treasurer it is not compatible with the working capital requirements of the State or with public safety to deposit public moneys or portion thereof, upon interest-bearing terms, as heretofore provided in this section, the State Treasurer may deposit the same without interest or open-time accounts with interest subject to withdrawal upon notice, conforming with Federal laws and regulations governing the same, in such of the national banks located in this State and institutions authorized by this State to carry on a banking or savings and loan business as he may select, until such a condition has, in his judgment, ceased to exist.
In all cases where a deposit is made in a national bank located in this State or institution authorized by this State to carry on a banking or savings and loan business, pursuant to this section, the State Treasurer shall require from any such institution a deposit of bonds, notes, certificates of indebtedness or bills or other obligations of or guaranteed by the United States; or bonds or other obligations of or guaranteed by the State of New Jersey; or any other obligations now or hereafter authorized by law as security for public deposits; designed to secure any deposit made pursuant to this section; provided, that such requirement shall be deemed to be met if the Federal Reserve Bank of New York or the Federal Reserve Bank of Philadelphia or any other banking institution with total assets in excess of $300,000,000.00 located within the Second or Third Federal Reserve Districts and approved for such purpose by the State Treasurer certifies to the State Treasurer that, pursuant to authority given by the depository, it holds obligations, owned by the depository, of the kind and in the amount required by the State Treasurer to secure any such deposit. No bank shall be permitted to hold securities, of the kind hereinbefore described, as security for public moneys on deposit in the same bank.
No State or national bank or savings and loan association in which the State Treasurer makes deposits of public moneys as above provided shall be required to secure such deposits as required by this section, to the extent that such deposits are insured by the Federal Deposit Insurance Corporation or by the Federal Savings and Loan Insurance Corporation or by any other Federal agency which insures deposits made in state or national banks or savings and loan associations.
N.J.S. § 52:18-16.1