How to Calculate CAGR for SIP Investments?

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Last Updated: 6th January 2026 - 06:28 pm

Systematic Investment Plans (SIPs) are a popular way to invest in mutual funds steadily, but many investors wonder how to calculate the CAGR for SIP to understand the real growth of their investments. CAGR, or Compound Annual Growth Rate, shows the consistent annual growth rate of your investment, factoring in compounding, which makes it different from simple returns. Knowing how to calculate CAGR for SIP helps you plan your financial goals more effectively.

To calculate CAGR on SIP, you consider the total investment made, the current value of the SIP, and the investment duration. Unlike lump sum investments, SIPs involve multiple contributions over time, which makes calculating the exact CAGR slightly more complex. However, using SIP return calculation methods or online CAGR calculators, you can easily estimate the annual growth rate. This allows you to understand how much your money has truly grown after compounding effects are considered.

When it comes to long term financial planning (i.e., retirement, purchasing a home, funding children's education), knowing the Compound Annual Growth Rate (CAGR) of your Systematic Investment Plan (SIP) is important. Knowing the CAGR of your SIP allows you to compare various mutual funds, possibly make changes to your contribution amounts, and establish realistic financial goals. It also allows you to evaluate if your SIP is generating the returns you expected and whether changes to your portfolio may be necessary.

Mastering how to calculate CAGR for SIP ensures clarity in investment growth, better financial planning, and informed decision-making. It transforms your SIP investments into a clear roadmap, highlighting how compounding turns regular contributions into substantial wealth over time.

To quickly estimate how your SIP contributions may grow over time, try our SIP calculator instead of manual CAGR calculations.

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