New Delhi, Nov. 15 -- Investors putting money into the Post Office Monthly Income Scheme (MIS) for a regular income should pay attention to what happens to the interest they leave unclaimed. Unlike a recurring deposit or a fixed deposit with a reinvestment option, the scheme does not compound its monthly interest. Any interest that an account holder does not claim earns no additional interest, which can reduce the effective return on money that remains unused.

The government-backed small savings scheme currently offers an interest rate of 7.4% per annum, payable monthly. It has a five-year maturity period and is designed primarily for investors who want a predictable income stream rather than capital appreciation.

Under the National Sav...