Investments
CAGR vs XIRR
CAGR suits one starting investment and one ending value over time; XIRR accounts for the dates and amounts of multiple cash flows, such as SIPs.
CAGR in one line
CAGR is the annual rate that links one opening value to one closing value over a period. It is useful for a single investment held without additions or withdrawals.
Why SIPs need XIRR
A SIP has many contributions on different dates. XIRR weights each contribution by its timing, so it is normally more meaningful for reviewing realised SIP cash flows.
Neither predicts the future
Both measures describe performance over a chosen period. They do not guarantee what a fund will earn next year or what a SIP projection will become.
Compare like with like
Use the same cash flows, dates and fees assumptions when comparing outcomes. Do not compare a projected return with an actual XIRR and call them equivalent.
How to check a SIP projection
Multiply the monthly contribution by the number of months to find total invested. Then compare that with the projection. For ₹10,000 a month over 10 years, total invested is ₹12,00,000; at a 12% annual assumption, WealthAura's start-of-month method projects about ₹23.23 lakh. That difference is a projection, not a return you can rely on.
This guide is for general education. Rules, lender terms, bank terms and individual circumstances can change the result.
Use the relevant calculatorFrequently asked questions
Does a SIP projection guarantee a return?
No. It uses the selected constant return assumption; market-linked investments can rise or fall.
Which calculator should I use with this guide?
Use the SIP calculator for a fixed monthly contribution and treat the output as an illustration.