What is XIRR?
XIRR (Extended Internal Rate of Return) is the annualised return on money that was invested or withdrawn on different dates. It is money-weighted: each rupee counts for exactly as long as it was invested, so a SIP instalment made last month carries less weight than one made three years ago.
In one line, XIRR answers: "What single annual rate explains all my investments, withdrawals and current value together?"
How to calculate XIRR for a monthly SIP, with an example
You invest ₹10,000 on the 5th of every month from January to December 2025, and the holdings are worth ₹1,30,000 on 5 January 2026. Total invested is ₹1,20,000, so the absolute gain is ₹10,000, or 8.33%. That understates your return because most of the money was invested for well under a year.
XIRR dates every cash flow instead. Instalments are negative, and the current value is one positive cash flow on the valuation date. Nothing was withdrawn; the current value simply closes the series.
| Date |
Transaction |
Cash flow (₹) |
| 05-01-2025 | Instalment 1 | -10,000 |
| 05-02-2025 | Instalment 2 | -10,000 |
| 05-03-2025 | Instalment 3 | -10,000 |
| 05-04-2025 | Instalment 4 | -10,000 |
| 05-05-2025 | Instalment 5 | -10,000 |
| 05-06-2025 | Instalment 6 | -10,000 |
| 05-07-2025 | Instalment 7 | -10,000 |
| 05-08-2025 | Instalment 8 | -10,000 |
| 05-09-2025 | Instalment 9 | -10,000 |
| 05-10-2025 | Instalment 10 | -10,000 |
| 05-11-2025 | Instalment 11 | -10,000 |
| 05-12-2025 | Instalment 12 | -10,000 |
| 05-01-2026 | Current value | +1,30,000 |
| XIRR | 15.67% |
The first instalment worked for a full year, the last for one month; on average each rupee was invested for about six and a half months. Earning ₹10,000 on ₹1,20,000 in roughly half a year is close to a 15.67% annual rate, which is why XIRR is nearly double the absolute return. Move the valuation date earlier and the same ₹1,30,000 gives a higher XIRR, because the gain arrived sooner.
Excel verification: put the 13 dates in A2:A14 and the signed cash flows in B2:B14, then enter
=XIRR(B2:B14, A2:A14). Excel returns 0.1567, or 15.67%. The SIP mode above gives the same answer with start 05-01-2025, maturity date 05-01-2026, ₹10,000 monthly and value ₹1,30,000.
Want a ready-made file? Open the sample XIRR sheet (₹5,000 monthly SIP example), then use File > Make a copy to enter your own transactions.
How to calculate XIRR in Excel or Google Sheets
- Column A, dates: one row per transaction in true date format, with the valuation date as the last row.
- Column B, cash flows: investments negative, withdrawals and current value positive. The first cash flow must be an investment.
- Formula:
=XIRR(values, dates, [guess]), for example =XIRR(B2:B14, A2:A14). The guess is optional. Format the result as a percentage.
A #NUM! error usually means all cash flows have the same sign or a date precedes the first date. Excel uses a 365-day year and the equation shown above, which is why its answer matches this calculator. See Microsoft's XIRR reference.
How this XIRR calculator works
SIP / Regular mode builds one dated cash flow per instalment from the frequency, start date, amount and maturity date, keeping your start day of the month (a SIP started on the 31st falls on the last day of shorter months), and adds the maturity or current value as a single positive cash flow on the end date.
Lumpsum / Irregular mode takes each investment or withdrawal with its actual date, plus an optional current portfolio value and valuation date for holdings you have not sold. Withdrawals are money you actually took out; the current value is a notional valuation. Both are positive cash flows in the equation, but the results and the implied-value table treat them separately so the final value is never shown as a withdrawal.
Use real transaction dates and amounts, not rounded estimates; XIRR is sensitive to timing. If you track several SIPs across funds, the Finnovate app calculates XIRR for the whole portfolio without manual entry.
What does a negative XIRR mean?
A negative XIRR means that, after accounting for timing, everything you took out is worth less than everything you put in. "Everything you took out" is withdrawals plus current value, not current value alone.
- With no withdrawals, negative XIRR simply means current value is below total invested.
- With intermediate withdrawals, current value can sit below total invested while XIRR stays positive, because the withdrawals already returned part of your capital. The reverse is also possible.
- Over short periods a small loss annualises into a steep negative figure.
It is not a calculation error. It reflects real timing and market impact.
XIRR vs CAGR: key difference
| Metric |
CAGR |
XIRR |
| Assumes one investment |
Yes |
No |
| Handles SIPs |
No |
Yes |
| Considers timing |
No |
Yes |
| Suitable for portfolios |
No |
Yes |
A fund factsheet quotes CAGR, which is time-weighted and ignores when you added or withdrew money. Your XIRR is money-weighted, so it can be above or below the fund's CAGR depending on whether your instalments landed before or after the good months. For a single lump sum the two are identical. Compare both with the CAGR calculator.
Does XIRR include tax, charges, or exit load?
No. XIRR reflects only the cash flows you enter. Reduce the withdrawals or current value by the tax, exit load and fees you would actually pay, and the result becomes a net XIRR.
Things to remember while using XIRR
- XIRR describes past or implied performance, not future returns.
- It does not assume gains were reinvested at the same rate. It is simply the one rate that reconciles your dated cash flows.
- Short periods distort it: a 5% gain over three months annualises to over 20%.
- Your XIRR is personal. Two investors in the same fund earn different XIRRs if their dates differ, so compare it with the rate your goal needs.
Related tools: plan contributions with the SIP calculator or browse all tools in our calculators hub.
Learn how a small-cap fund works if you are comparing equity fund returns.
