XIRR Calculator for SIP and Investment Returns

What is XIRR?

XIRR stands for extended internal rate of return. It calculates an annualized return when investments and withdrawals happen on different dates. This makes it the preferred return measure for SIP investments, staggered mutual fund purchases, partial redemptions, dividends, and portfolios where cash flow timing matters.

A simple return percentage cannot explain dated cash flows correctly. If two investors both earn INR 20,000, the better result depends on when each invested, how much stayed invested, and when money came back. XIRR solves that timing problem by discounting each cash flow by its exact date.

XIRR Formula Explained

XIRR is the rate that makes the net present value of all dated cash flows equal to zero. The calculator evaluates each cash flow as Amount / (1 + Rate)^(Days / 365) and finds the annualized rate where the sum becomes zero.

XIRR vs CAGR

CAGR is ideal for one initial investment and one final value. XIRR is better for SIPs and irregular transactions. A SIP has many installments, and each installment has a different holding period. XIRR respects those dates, while CAGR would oversimplify the investment journey.

XIRR vs IRR

IRR assumes equal periods between cash flows. XIRR allows exact dates, which is more realistic for mutual fund statements, stock purchases, business cash flows, and personal portfolio tracking. If dates are irregular, XIRR usually gives a cleaner picture than regular IRR.

XIRR for SIP Investments

To calculate SIP XIRR, enter each SIP installment as a negative amount on its investment date. Enter the current portfolio value as a positive amount on the valuation date. If you redeemed money, enter each redemption as a positive cash flow on the redemption date. The result shows the annualized return from the actual timing of money.

Common Mistakes

• Entering all investments as positive numbers instead of negative numbers.
• Forgetting to add current market value as the final positive cash flow.
• Using CAGR for SIPs when cash flow timing is important.
• Comparing XIRR without considering risk, volatility, taxes, and exit loads.

Worked Example

If you invested INR 10,000 on three different dates and your current value is INR 42,000 two years later, XIRR estimates the annualized rate that connects those dated investments to the final value. Change the dates above to see how earlier or later investments affect the result even when the total invested amount stays the same.