What is XIRR?
Extended Internal Rate of Return (XIRR) is the annualised, compounded rate of return that makes the discounted sum of every cash flow in and out of an investment equal to zero. In plain English: it is the single yearly rate at which your money actually grew — even if you invested unevenly, added top-ups, withdrew partial amounts, or held the asset for a non-round number of years.
XIRR is the metric of choice for SIPs, ELSS top-ups, NPS contributions, lumpy real-estate cash flows, and any portfolio where the calendar dates of contributions and redemptions matter.
How XIRR is Calculated
XIRR is the value of r that solves the equation:
- Ci — the ith cash flow (negative for invested, positive for received).
- di — the calendar date of the ith cash flow.
- d0 — the date of the first cash flow (the anchor).
- r — the annualised XIRR you are solving for.
Because the equation cannot be rearranged in closed form, our calculator uses a hybrid bisection + Newton-Raphson iteration to converge on r to ten decimal places. Each input change triggers a fresh, real-time solve.
Worked Example — Irregular SIP
Suppose you invest in a mutual fund across three uneven contributions and redeem the entire balance at the end:
| Date | Cash Flow | Type |
|---|---|---|
| 01-Jan-2021 | −₹1,00,000 | Initial investment |
| 15-Jul-2022 | −₹50,000 | Top-up |
| 10-Mar-2023 | −₹50,000 | Top-up |
| 01-Jan-2024 | +₹20,000 | Partial withdrawal |
| 31-Dec-2025 | +₹2,80,000 | Final redemption |
Total invested = ₹2,00,000. Total received = ₹3,00,000. Absolute return is 50% — but spread across five years of irregular contributions, that translates to an XIRR of approximately 12.4% p.a. — exactly what you need to compare this fund head-to-head with another that may have a totally different deposit pattern.
XIRR vs CAGR — When to Use Which
| Aspect | CAGR | XIRR |
|---|---|---|
| Cash-flow pattern | Single in, single out | Any number of irregular flows |
| Date sensitivity | Years only | Exact calendar dates |
| Best for | Lumpsum holdings | SIPs, top-ups, real estate |
| Comparability | Across simple holdings | Across any portfolio |
| Formula | (FV/PV)^(1/N) − 1 | Iterative NPV = 0 |
Rule of thumb: use CAGR for a single-shot investment held for a defined period, and XIRR the moment you have more than one cash flow at different points in time.
Benefits of Using XIRR
- Compares funds and portfolios on an apples-to-apples annualised basis.
- Correctly weighs early cash flows higher than recent ones (time-value of money).
- Handles SIPs, STPs, SWPs, top-ups and partial withdrawals natively.
- Works across calendar gaps — months matter, not just years.
- Is the de-facto industry metric used by AMCs, advisors and the AMFI.
When to Use the XIRR Calculator
Use this calculator any time you have:
- Monthly or weekly SIPs into mutual funds.
- Lumpy investments — buying shares or units across different months.
- Real estate where you paid in instalments and rented out / sold the property.
- An NPS or PPF account with non-uniform yearly contributions.
- A startup investment with multiple funding rounds and partial exits.
For each entry, you only need the date and amount of the cash flow. The calculator will instantly resolve the annualised XIRR and visualise the cumulative growth.