Extended Internal Rate of Return (XIRR)

Investing isn’t always straightforward. Sometimes you add money monthly, other times you skip a few months or withdraw funds. Calculating returns when transactions are messy can feel overwhelming. That’s where XIRR comes in, it cuts through the complexity and shows your true annual returns, even with irregular investments or withdrawals.

What is an XIRR Calculator?

XIRR (Extended Internal Rate of Return) is your go-to tool when investments involve multiple deposits or withdrawals at different times. Think of it as a "personalized return meter" for real-life investing. Unlike simpler methods, XIRR factors in when you added or took out money, giving you a single annualized return percentage that reflects your actual growth.

How to Use an XIRR Calculator (It’s Simple!)

No finance degree needed. Just follow these steps:

1. List your transactions: Enter every date you invested (cash outflow) or withdrew money (cash inflow).
2. Add amounts: Investments are negative (e.g., -$500), withdrawals/final value are positive (e.g., +$10,000).
3. Include today’s value: Add your investment’s current worth with today’s date.
4. Hit calculate: The tool instantly shows your annualized return (XIRR).

When Should You Use XIRR?

• You invest irregularly (e.g., $200 in January, $500 in June).
• You’ve withdrawn money mid-investment.
• You want accurate returns for SIPs, mutual funds or personal portfolios with varying transactions.

XIRR vs. CAGR: What’s the Difference?

• CAGR (Compound Annual Growth Rate): Works for one-time investments. Example: You invest $10,000 once and check growth after 5 years.
• XIRR: Designed for multiple transactions. Example: You invest $100/month for 3 years, skip some months, then withdraw part of it. XIRR handles the mess and still gives you a clear annual return.