Tenn. Code Ann. § 4-31-114: Bonds and notes - Legal investments and lawful security

(a) The bonds and notes issued pursuant to this chapter shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, insurance companies, fiduciaries, trustees, guardians and for all public funds of the state, any local government unit or other political corporations or subdivisions of the state.

(b) Such bonds and notes shall be eligible to secure the deposit of any and all public funds of the state and all public funds of local government units or other political corporations or subdivisions of the state, and such bonds and notes shall be lawful and sufficient security for these deposits to the extent of their value when accompanied by all unmatured coupons appertaining thereto.