Using CAGR to compare two completed SIPs fairly
CAGR wants one start value and one end value
The CAGR calculator answers: if a single lumpsum grew from A to B over N years, what constant yearly rate links them. A SIP is many instalments on many dates. Feeding only “total invested” as A and “final value” as B into CAGR treats the money as if it were all invested on day one—which overstates how long the later instalments worked.
Fairer comparisons for finished SIPs
Prefer personal XIRR (from your platform statements) when you compare two completed SIPs. If you only have start and end corpus snapshots for a true lumpsum, CAGR is fine. For rough education, you can still look at absolute wealth created, amount invested, and tenure side by side—without forcing a misleading CAGR label onto SIP cash-flows.
Do not rank future SIPs by past CAGR alone
A SIP that ran through a bull market will show prettier history than one that ran through a flat market. Use past figures to understand what happened, then size the next SIP with the SIP calculator and conservative assumptions—not with the winner’s CAGR as a promise.
Results from FinanceChacha are estimates for planning, not financial or tax advice. Read the disclaimer.
Try the calculators
Open a calculator this guide refers to and run your own numbers.