XIRR Calculator
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Result
When reviewing investment performance, looking exclusively at total profit or absolute return percentage can be deceptive. A 70% gain sounds impressive, but if it took 10 years to achieve, the annualised return was barely 5.4%—lower than a safe government savings bond. Conversely, that same 70% gain realized over 4 years represents an annual compounding rate of over 14%.
XIRR (Extended Internal Rate of Return) standardizes your investment performance onto an annualised basis, allowing you to compare your real-world returns directly against the Nifty 50, fixed deposits, or mutual fund benchmarks.
What this calculator does
This calculator computes both absolute and annualised performance metrics for your investments:
- XIRR / Annualised return: The exact compound annual growth rate that equates your initial capital outlay with your current ending value over the holding period.
- Absolute return: The point-to-point percentage gain on your initial capital, unadjusted for time.
- Total capital gain: The absolute rupee profit generated by your investment.
How to use this calculator
- Amount invested: Enter the initial lumpsum or total capital deployed.
- Current / redemption value: Enter the present market valuation of your holding, or the final redemption amount received.
- Holding period: Enter the duration of the investment in years (supports partial years, e.g., 3.5 years).
Formula and mathematical methodology
For a single investment tranche held over a specific duration, XIRR simplifies to the Compound Annual Growth Rate (CAGR) formula:
For portfolios with multiple dated instalments (such as systematic investment plans), XIRR solves for the internal discount rate r that makes the net present value (NPV) of all dated cash flows equal to zero:
A verified return calculation
Consider an investor who deployed ₹5,00,000 into an equity mutual fund or stock portfolio that is now valued at ₹8,50,000 after 4 years:
| Metric | Calculation | Result |
|---|---|---|
| Initial capital deployed | Base investment | ₹5,00,000 |
| Ending portfolio valuation | Current market value | ₹8,50,000 |
| Holding period | Time elapsed | 4.0 years |
| Net capital gain | ₹8,50,000 − ₹5,00,000 | ₹3,50,000 |
| Absolute return | (₹3,50,000 ÷ ₹5,00,000) × 100 | 70.00% |
| XIRR / Annualised return | (₹8,50,000 ÷ ₹5,00,000) ^ (1/4) − 1 | 14.19% |
While the headline statement is that the portfolio grew by 70%, the true annual compounding velocity was 14.19% per year. Comparing that 14.19% against the broader market index over the same 4-year cycle tells you whether your investment outperformed or lagged passive alternatives.
When to use XIRR vs Absolute Return vs CAGR
- Absolute Return: Best used only for investments held for less than 1 year (e.g., a 3-month trade that generated 6%). Annualizing short-term gains can produce distorted projections.
- CAGR: Ideal for one-time lumpsum investments held for more than 1 year with no intermediate cash additions or withdrawals.
- XIRR: Essential for systematic investment plans (SIPs), systematic withdrawal plans (SWPs), and active brokerage accounts where capital is added or removed irregularly across different dates.
Frequently asked questions
What is the practical difference between CAGR and XIRR?
CAGR (Compound Annual Growth Rate) evaluates a single point-to-point investment with one entry date and one exit date. XIRR (Extended Internal Rate of Return) handles multiple cash flows occurring on different dates—such as monthly SIP instalments, periodic top-ups, partial redemptions, and dividend receipts—and converts them into a single annualised rate of return.
Why is absolute return misleading for multi-year investments?
Absolute return measures total percentage growth without considering time. A 70% absolute return achieved over 2 years represents an impressive 30.4% annualised return, whereas that same 70% absolute gain spread across 10 years represents just 5.45% per annum—failing even to beat inflation and bank fixed deposits.
Can XIRR be negative?
Yes. If your current portfolio valuation or final redemption amount is lower than the total capital you invested across all tranches, your XIRR will be negative, reflecting an annualised capital loss.
Why does my mutual fund portal show both CAGR and XIRR?
Mutual fund portals display CAGR for lumpsum investments held for more than one year, and XIRR for SIPs or accounts with ongoing transactions. Because SIP instalments are invested at different NAV levels on different dates, XIRR is the only mathematically sound way to calculate your personal investor return.
Related investment calculators
- SIP Calculator — Model wealth accumulation through monthly mutual fund instalments.
- CAGR Calculator — Simple point-to-point compound annual growth rate calculation.
- Portfolio Return Calculator — Total portfolio performance benchmarking against index returns.
- Capital Gains Tax Calculator — Calculate tax liability on realized mutual fund and equity gains.
Trust, accuracy and transparency
Educational purpose
FinToolkit is an educational tool. Nothing here is investment, tax, insurance or legal advice, and no result should be treated as an offer or a quote.
Financial accuracy
Every result is produced by a published formula running at full double precision in your browser. Only the displayed figures are rounded.
Formula verification
Each formula is checked against the standard method used by Indian lenders, fund houses, insurers or the relevant statute, and re-verified whenever rules change.
Data sources
Rules and rates are taken from official sources such as the Income Tax Department, RBI, SEBI, EPFO, PFRDA and India Post.
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Review policy
Pages carry a last-updated and next-review date. Corrections are welcome through the contact page.