How To Calculate SIP Returns On Investment In India?

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It is always sensible to know how much return you are getting from your investments. It is necessary for all types of investment, including mutual funds, stocks, and even a simple savings account. But when it comes to calculating the returns on regular investments, such as the average return on SIPs, many factors affect the calculation.

Know how to calculate the returns through your SIPs investments will make it easier for you to tell whether the returns are above the minimum returns you would need.

In this article, we will explore various methods to calculate SIP returns when investing in mutual funds so that you can be confident about what you’re getting! Let us understand how to track your SIP profits.

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What are the Methods of Calculating SIP Returns?

  1. Absolute Return or Point to Point Return

The calculation of absolute return from SIPs requires the initial and current Net Asset Value (NAV). This calculation does not require a holding period and simply computes your basic return on your SIP investment

Formula: (Current Net Asset Value – Initial Net Asset Value)/Initial Net Asset Value * 100

For example: 

Current Net Asset Value = 75 INR
Initial Net Asset Value = 60 INR
Absolute Return = 25%

  1. How to Calculate Annualized Return for SIP

Investors may want an annual rate of return if the holding term is less than a year. It is also known as an effective yearly yield.

Formula: [{(1 + Absolute Return Rate) ^ (365/Day Count)} – 1]*100

For example: 

Current Net Asset Value = 75 INR
Initial Net Asset Value = 60 INR
Day Count = 6 months
Absolute Return = 25%
Simple Annualized Return Percentage = 56.25%

  1. Compounded Annual Growth Rate (CAGR)

CAGR or Compound Annual Growth Rate is the best way to measure the growth of your investments over a specific period, especially when the income has staggered across time. It is one of the most accurate ways to calculate your SIP returns over time.

The CAGR represents the returns’ average annual growth rate. If the holding period exceeds a year, the returns may be computed using the CAGR approach.

Formula: [{(Current Net Asset Value / Initial Net Asset Value) ^ (1/Year Count)} – 1]*100

For example: 

Current Net Asset Value = 75 INR
Initial Net Asset Value = 60 INR
Year Count = 2 years
CAGR Rate= 11.8%

Note: When computing the CAGR with a holding period of less than a year, replace the year count with month count or day count as needed.

  1. Extended Internal Rate of Return (XIRR)

XIRR is a function in MS Excel that calculates the internal rate of return for investments with erratic financial flows. You can use it to calculate the annualized yield or IRR (internal rate of return) when multiple transactions occur at different intervals. XIRR is the extended IRR. It calculates the returns of mutual fund investments when the investment has occurred at different times of the year.


  1. Fill up the first column with all of your SIP dates.
  2. In the next column, you need to enter the SIP amount in accordance with the dates. For example: If the SIP amount for a particular date is 5,000 INR. You must put –5000 in the cell. The use of a negative sign is significant because it represents the outflow of currency.
  3. You need to enter the date you wish to examine the returns under the SIP date column.
  4. You need to enter the aggregate market value of your units under the SIP amount column. Make sure not to include a negative sign since this will result in a cash inflow. However, the redemption profits may differ from the market value, especially with an exit load.
  5. Click on a blank cell and open the XIRR function. The function requires three parameters, namely, Value, Dates, and Guess. You need to select the whole SIP amount column, including the total market value for the Value parameter. For Dates, you must select the entire SIP dates column, including the checking date. You can leave the Guess parameter blank. Make sure everything is correct and click on ‘OK.’
  6. Multiply the resulting amount with 100, and you have your XIRR Rate.


Mutual funds are a popular investment vehicle for many people in India. Whether you want to invest in equity or debt, there’s a mutual fund with a SIP guaranteeing good returns to suit your needs. However, many people think they are too complicated, but in reality, calculating your average returns with a SIP can be pretty simple if you know what you’re doing. 

We hope this blog post has given you some insight into how mutual funds work and how to calculate your SIP returns. WealthBaskets by WealthDesk consists of baskets of premium ETFs and stocks. These are created and managed by SEBI registered professionals based on some idea, theme or sector. WealthBaskets provide SIP options, rebalances and complete transparency with holding transferred straight to your broking account.


How to continue a SIP with good returns?

The primary objective of continuing a SIP with good returns is to carry it long-term. Long-term SIP returns are significantly safer than mid or short-term ones. Short-term SIPs even carry a minor risk of losing money.

Are SIPs a smart way to invest?

If you are looking for a long-term investment option, SIPs are one of the best options available in today’s market.

What happens if I fail to pay my SIP?

If you fail to pay your SIP on the due date, the company gives you two extra months to catch up. However, if you fail to pay for three consecutive months, your investment gets canceled. Additionally, you may also receive penalties from your bank since you failed auto-debit payments.

Which is the best SIP return plan?

A top SIP return plan that provides maximum returns with investment within your budget is considered the ‘best SIP return plan’.

What is the SIP minimum return amount?

It is dependent on the cap and fund in which you are investing. Small and mid-cap funds have SIPs with strong returns but greater risk, whereas big-cap funds have low risk but comparatively lower returns than small and mid-sized funds.

How To Calculate SIP Returns On Investment In India?

How To Calculate SIP Returns On Investment In India?

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