Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Calculate simple annualised growth or date-weighted internal rate of return for irregular cash flows.
Choose return method
Cash invested should be negative and cash received/current value positive for XIRR.
Annualised return
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Method
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How This Is Calculated
CAGR (Compound Annual Growth Rate) measures the annualized return between a single starting and ending value over a fixed period — it assumes one lump-sum investment with no interim cash flows. XIRR (Extended Internal Rate of Return) instead handles irregular cash flows on different dates (like SIP instalments or multiple withdrawals), computing the annualized rate that makes the net present value of all cash flows equal to zero.
Frequently Asked Questions
What is the difference between CAGR and XIRR?
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CAGR works only for a single investment made once and redeemed once — it smooths the growth between two points into an annual rate. XIRR handles multiple cash flows at different dates (like monthly SIPs), which CAGR cannot do, making XIRR the correct metric for SIP or staggered-investment returns.
Why is my SIP's CAGR different from its XIRR?
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CAGR isn't really applicable to SIPs since it can't account for money invested at different times — using it on a SIP (by naively treating total invested vs. final value as a lump sum) gives a misleading number. XIRR is the correct way to measure SIP returns because it properly weights each instalment by when it was invested.
Is XIRR the same as the actual annual return I earned?
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XIRR is an annualized, money-weighted rate — it reflects your personal return given exactly when and how much you invested, which can differ from a fund's published CAGR or point-to-point return, especially if your instalments were irregular or timed differently from a steady monthly SIP.
Scope: Computes the Compound Annual Growth Rate (CAGR) for a single lump-sum investment, and the Extended Internal Rate of Return (XIRR) for irregular/multiple cash flows on specific dates.
Calculation logic
CAGR = ((Ending value ÷ Beginning value)(1 ÷ Number of years)) − 1, applicable only where there is a single starting and single ending value with no interim cash flows.
XIRR solves for the rate r such that Σ (CFi ÷ (1 + r)((Datei − Date0) ÷ 365)) = 0 across all entered cash flows and their actual dates, using an iterative numerical method — this correctly handles irregular investment/withdrawal timing that CAGR cannot.
Inputs and assumptions
CAGR assumes a smooth, single compounding path between the two entered values and ignores any interim volatility or cash flows — it should only be used for point-to-point comparisons, not for SIPs or investments with multiple contribution dates.
XIRR requires accurate cash-flow dates and amounts (each contribution as a negative flow, each withdrawal/redemption as a positive flow) to compute a meaningful annualised return.
Exclusions and edge cases
Does not account for tax on the gains — CAGR/XIRR shown are pre-tax return measures unless the user enters post-tax cash flow figures.
Where cash flows produce multiple mathematically valid XIRR solutions (non-conventional sign changes), the calculator flags this rather than silently selecting one.
Sources
No specific external regulatory source applies beyond general market-linked instrument mechanics.
Review status: reviewed and approved by CA Nikhil Gupta on 14 July 2026.
Guides that use this calculator
Background, worked examples and the rules behind these numbers.
Finin2min is not registered with the Securities and Exchange Board of India (SEBI) as an Investment Adviser or as a Research Analyst. This tool performs an arithmetic calculation on the figures you enter and is published for general information and educational purposes only. It is not investment advice, it is not personalised to your financial circumstances, objectives or risk tolerance, and it is not a recommendation to buy, sell or hold any security, scheme or product. Projected values are illustrative and follow directly from the assumptions you supply; actual returns will differ, and past performance does not indicate future results. Consider consulting a SEBI-registered Investment Adviser before acting on any investment decision.