XIRR Calculator

[xirr_calculator]

Free XIRR Calculator: Find the True Annualized Return of Your Investments

If you invest a lump sum into a fixed deposit and leave it there for five years, calculating your interest is incredibly straightforward. But what if you invest in a mutual fund, add small amounts whenever the market dips, start a SIP for a few months, and then withdraw partial amounts to pay for a vacation?

Because cash enters and exits your portfolio at completely random, irregular intervals, standard returns (like CAGR) will give you wildly inaccurate numbers. To find out how your money is actually performing, you need to calculate the XIRR (Extended Internal Rate of Return).

What is XIRR?

XIRR stands for Extended Internal Rate of Return. It is an advanced financial metric used to evaluate the annualized yield of an investment when cash flows (deposits and withdrawals) happen on irregular dates.

It is considered the gold standard metric for assessing mutual fund portfolios, stock portfolios, and real estate investments because it assigns a precise weight to every single rupee based on exactly how many days it has been invested in the market.

How to Use Our XIRR Calculator

Unlike our simple SIP or Lumpsum calculators, the XIRR tool requires you to input a ledger of your transactions.

  1. Enter Your Transactions: For every investment you made, add a row. Select the exact date of the transaction and enter the amount.
  2. The Golden Rule of Signs:
    • Cash Outflows (Investments): Whenever money leaves your bank account to be invested, enter it as a negative number (e.g., -5000).
    • Cash Inflows (Withdrawals): Whenever money comes back to you, enter it as a positive number (e.g., 2000).
  3. The Final Value: To calculate your return up to today, add one final row. Select today’s date, and enter the current market value of your entire portfolio as a positive number.
  4. Calculate: Click the calculate button to see your true annualized return!

The Mathematics Behind XIRR

Calculating XIRR manually is almost impossible without software because there is no direct algebraic formula to solve for the rate. Instead, XIRR is the rate ($r$) that satisfies the Net Present Value (NPV) equation when NPV is set exactly to zero.

The equation looks like this:

NPV=∑i=0NCi(1+r)di−d0365=0NPV = \sum_{i=0}^{N} \frac{C_i}{(1+r)^{\frac{d_i – d_0}{365}}} = 0

Where:

  • C_i = The cash flow amount (positive or negative) of the i-th transaction.
  • d_i = The date of the i-th transaction.
  • d_0 = The date of your very first investment (the starting point).
  • r = The XIRR (the annualized rate of return we are trying to find).

Because r is trapped in the denominator and the exponent depends on exact days, our calculator uses an algorithmic guessing process called the Newton-Raphson Method. The code guesses a rate, checks the NPV, adjusts the guess mathematically, and recalculates—repeating this loop until it finds the exact percentage down to the decimal point.

CAGR vs. XIRR: Which Should You Use?

  • Use CAGR (Compound Annual Growth Rate): When you make a single, one-time investment and hold it without adding or withdrawing any money until maturity.
  • Use XIRR: When you have multiple transactions—like SIPs, SWPs (Systematic Withdrawal Plans), dividend payouts, or ad-hoc top-ups. If there is more than one date involved in your investment journey, XIRR is the only accurate way to measure your success.