XIRR Calculator
Calculate the true annualized return on irregular SIP investments
| Date | Amount (₹) | Type |
|---|
Understanding XIRR: The Gold Standard of Investment Returns
XIRR (Extended Internal Rate of Return) is the most accurate way to calculate the annualized return on investments with irregular cashflows. In the real world, SIPs are rarely "perfect." You might miss a month, make a double payment, or withdraw some money for an emergency. XIRR is the only metric that accounts for these specific timings to give you a "True Return" figure.
Irregular Cashflows
Unlike CAGR, XIRR doesn't care if you invest ₹5,000 one month and ₹20,000 the next. It treats each rupee based on how long it stayed in the market.
Partial Redemptions
If you withdrew ₹50,000 halfway through your 5-year journey, XIRR accounts for that "outflow" to give you the real performance of the remaining capital.
Comparison: XIRR vs. CAGR vs. Absolute Return
Choosing the wrong metric can lead to a false sense of security or unnecessary panic. Here is a breakdown of when to use what:
| Metric | Calculation Basis | Best For |
|---|---|---|
| Absolute Return | (Current Value - Invested) / Invested | Investments held for < 1 year. |
| CAGR | Smooth annual growth (Lumpsum) | Real Estate, Gold, One-time Mutual Fund buy. |
| XIRR | Time-weighted cash flows (Newton-Raphson) | SIPs, Portfolio with withdrawals, Active Trading. |
Real-World Case Study: Why You Need XIRR
Consider an investor, Rahul, who started a SIP of ₹10,000. In Year 3, he received a bonus and added a lumpsum of ₹2 Lakhs. In Year 4, he withdrew ₹50,000 for a vacation.
- Using CAGR: Rahul's CAGR would look inflated because it wouldn't accurately weight the large lumpsum added later.
- Using XIRR: Our calculator treats the ₹10k SIPs, the ₹2L bonus, and the ₹50k withdrawal as separate events with their own timestamps. The resulting 14.2% XIRR is the only number that tells Rahul his true performance.
💡 Pro-Tip: The "Valuation Date" Trick
To see your realized XIRR for an investment you already sold, enter your final exit amount as a positive number on the date you sold it. To see your notional XIRR for an active investment, enter today's date and your current portfolio value as the last row.