CAGR Calculator Monthly For SIP Investment
Measure the true annual growth rate of your investment. Use lump-sum mode for a one-time investment, or the monthly CAGR calculator mode to find the annualised return (XIRR) on your monthly SIP.
Growth at this rate
How the investment grows year by year at the calculated annual rate.
Year-wise growth
| Year | Invested | Value | Gain | Growth |
|---|
CAGR smooths out the ups and downs into a single steady annual growth rate, as if the investment grew by the same percentage every year. Real returns are rarely this smooth. For a SIP, the annualised figure shown is the XIRR – the true rate that accounts for each instalment being invested at a different time.
CAGR calculator – your true annual growth rate
CAGR, or Compound Annual Growth Rate, is the single most useful number for comparing investments. It tells you the steady annual rate at which your money would have grown to reach its final value, smoothing out the year-to-year swings. This calculator gives you CAGR two ways: for a one-time lump sum, and as a monthly CAGR calculator for a SIP where you invest every month.
How to calculate CAGR for a lump sum
For a single investment, CAGR uses a simple formula:
For example, if ₹1,00,000 grows to ₹2,50,000 over 7 years, the CAGR is about 14%. That means the investment effectively grew 14% every year, compounded. Enter your own figures above and the lump-sum mode does it instantly.
CAGR calculator for SIP investment
A plain CAGR formula does not work for a SIP, because each monthly instalment is invested at a different time and therefore grows for a different length of time. The correct measure for a series of monthly investments is the XIRR – the annualised internal rate of return. Our CAGR calculator for SIP investment solves for the monthly rate that turns all your instalments into the final value, then annualises it. The result is the genuine annual growth rate of your SIP, directly comparable to a lump-sum CAGR or an FD rate.
How to calculate CAGR for a monthly SIP
To answer the common question of how to calculate CAGR for monthly SIP: you cannot simply plug total invested and final value into the lump-sum formula – that would overstate your return, because it ignores that later instalments were invested for only a few months. Instead, the calculator treats every monthly SIP as a separate cash flow and finds the single annual rate (XIRR) that makes them all add up to your current value. Switch to the Monthly SIP tab, enter your monthly amount, the current value, and the number of years, and it returns the annualised SIP return.
CAGR vs absolute return
| Measure | What it tells you |
|---|---|
| Absolute return | Total gain over the whole period, ignoring time |
| CAGR (lump sum) | Steady annual growth rate of a one-time investment |
| XIRR (SIP) | Annualised return accounting for many dated cash flows |
A 150% absolute return sounds huge, but over 10 years that is under 10% a year. CAGR and XIRR put returns on a comparable, per-year basis.
Frequently asked questions
What is CAGR?
CAGR, the Compound Annual Growth Rate, is the steady yearly rate at which an investment grows from its starting value to its ending value over a period, assuming profits are reinvested. It smooths volatile returns into one comparable annual number.
How do I calculate CAGR for a monthly SIP?
You cannot use the plain CAGR formula for a SIP because each instalment is invested at a different time. Instead you find the XIRR, the annualised rate that reconciles all your monthly investments with the final value. This monthly CAGR calculator does that automatically in the Monthly SIP tab.
Why is SIP return measured by XIRR and not CAGR?
CAGR assumes a single investment held for the whole period. A SIP has many investments made at different dates, so the money is invested for varying lengths of time. XIRR is the version of CAGR that handles multiple dated cash flows, making it the right measure for SIP returns.
Is a higher CAGR always better?
Generally a higher CAGR means faster growth, but it should be judged against the risk taken and the time period. A high CAGR over one year may not repeat; a steady CAGR over ten years is more meaningful. Always compare like periods.
What is a good CAGR for equity investments?
Historically, diversified equity investments in India have delivered roughly 10–14% CAGR over long periods, though this varies and is never guaranteed. Debt investments are lower. Compare any CAGR against inflation to judge real growth.
Does CAGR account for additional investments?
Plain CAGR does not; it assumes one lump sum. If you add money over time, as in a SIP, use the XIRR-based Monthly SIP mode, which accounts for every contribution and its timing.