Calculate Your Investment Returns
Enter your investment amount, current value and holding period to get CAGR, absolute return and real return
Returns Summary
Returns at Different CAGR Scenarios
Wealth Build-up Breakdown
Complete Return Details
What Are Investment Returns?
Understanding CAGR, absolute return, annualised return, real return and why each metric matters differently
Investment returns measure how much your money has grown over time. But a single number can tell very different stories depending on which return metric you use. A 50% absolute return sounds impressive — until you learn it took 20 years (just 2% CAGR). Context and the right metric are everything.
The most important distinction is between nominal return (raw rupee growth) and real return (growth after subtracting inflation). An FD at 6.5% when inflation runs at 6% gives you a real return of just 0.5% — barely preserving purchasing power. Every serious investor must evaluate returns in real terms.
Tax further erodes returns. Equity LTCG is taxed at 12.5% above Rs.1.25 lakh/year. Debt fund gains are added to income (30% for high earners). FD interest is fully taxable as income. The post-tax, inflation-adjusted real return is the truest measure of how much your wealth has actually grown in terms of purchasing power.
Historical Returns by Asset Class in India
Long-run CAGR benchmarks across equities, debt, gold, real estate and alternatives to contextualise your own investment returns
| Asset Class | 20-yr CAGR (Approx) | Tax on Gains | Liquidity | Real Return (after 6% inflation) |
|---|---|---|---|---|
| Nifty 50 (Large Cap) Long-Run Best | 12–14% | LTCG 12.5% (above Rs.1.25L) | Very High | ~6–8% real CAGR |
| Mid & Small Cap MFs | 14–18% | LTCG 12.5% (above Rs.1.25L) | High | ~8–12% real CAGR |
| PPF / EPF | 7–8.25% (guaranteed) | Tax-Free (EEE) | Low (lock-in) | ~1–2% real CAGR |
| Bank FD | 6–7.5% | Income tax (full) | Medium | Negative to 0% real (post-tax) |
| Gold (physical/SGBs) | 9–11% | LTCG 12.5% / SGBs tax-free | Medium | ~3–5% real CAGR |
| Residential Real Estate | 7–12% (city-dependent) | LTCG 12.5% (indexed) | Very Low | 1–6% real CAGR |
Equity: Highest Long-Run Return
Nifty 50 has delivered ~13% CAGR over 25 years in India. Mid/small cap indices have done even better. Equity outperforms every other asset class over 15+ year periods in real, post-tax terms.
12–18% CAGRGold: Inflation Hedge
Gold has given ~10% CAGR in rupee terms over 20 years, partly due to INR depreciation. A good portfolio diversifier but earns no income. SGBs pay 2.5% interest on top of price appreciation.
9–11% CAGRReal Estate: Illiquid & Variable
Metro residential property has delivered 8–12% CAGR in prime locations, but much less in tier-2/3 cities. High transaction costs, illiquidity and maintenance costs reduce real returns significantly.
7–12% CAGRPPF: Safe, Tax-Free, Low Return
7.1% tax-free is equivalent to ~10% pre-tax for a 30% taxpayer — comparable to debt funds. But it is government guaranteed, completely safe, and EEE status makes it excellent for conservative 20–30% of portfolio.
7.1% Tax-FreeFD: The Worst Long-Run Return
At 6.5% pre-tax, a 30% taxpayer earns 4.55% after tax vs. 6% inflation — negative real return. FDs are safe for short-term liquidity needs but a terrible long-run wealth builder for most investors.
Negative RealCompare Apples to Apples
Always compare returns post-tax and inflation-adjusted. A 14% equity CAGR vs. 7% FD looks like 2x better, but post-tax real returns are ~8% equity vs. ~-0.5% FD — the gap is actually much larger.
Use Real ReturnsHow This Calculator Works
Step-by-step from investment amount and current value to CAGR, real return, post-tax return and full wealth breakdown
- 1
Calculate CAGR from Investment & Current Value
CAGR = (Current Value / Invested Amount)^(1/Years) - 1. This is the true annualised return that accounts for compounding. It is independent of the path taken — whether the investment went up steadily or had peaks and troughs, CAGR tells you the equivalent constant annual growth rate.
- 2
Calculate Absolute Return and Total Gain
Absolute Return = (Current Value - Invested) / Invested x 100. Total Gain = Current Value - Invested Amount. While absolute return doesn't account for time, it is useful as the gross gain percentage and forms the basis for tax calculations on your actual profit.
- 3
Apply Tax to Compute Post-Tax Return
Post-Tax Gain = Total Gain x (1 - Tax Rate / 100). Post-Tax Value = Invested + Post-Tax Gain. Post-Tax CAGR = (Post-Tax Value / Invested)^(1/Years) - 1. For equity LTCG, tax applies only on gains above Rs.1.25 lakh per year. The calculator applies the tax rate you enter directly to the total gain.
- 4
Compute Real (Inflation-Adjusted) Return
Real CAGR = [(1 + Nominal CAGR) / (1 + Inflation Rate)] - 1. This is the most important number — it tells you by how much your purchasing power actually grew. Inflation-adjusted real CAGR above zero means you are genuinely getting richer; below zero means you are losing real wealth.
- 5
Calculate Future Value at Target CAGR
If you switch to "Future Value at Target CAGR" mode, the formula reverses: FV = Principal x (1 + CAGR)^Years. This tells you what your current investment would grow to if it achieves a specific target annualised return — useful for goal-based planning and scenario analysis.
- 6
Stress-Test Across CAGR Scenarios
Results are shown at your CAGR minus 3%, your actual CAGR, and CAGR plus 3% so you can see the full range of outcomes. This helps you understand the impact of a small difference in return — which is enormous over long periods due to compounding.
CAGR = (Current/Invested)^(1/Years) - 1
Absolute Return = (Current - Invested) / Invested x 100
Real CAGR = (1 + CAGR) / (1 + Inflation) - 1
Future Value = Invested x (1 + CAGR)^YearsSmart Investing Tips to Maximise Returns
Proven strategies to build wealth faster, avoid common mistakes and keep more of what you earn
Time in Market Beats Timing the Market
Missing just the 10 best days in the Nifty 50 over 20 years reduces your total return by over 50%. Staying invested through crashes is the single most powerful return-enhancement strategy. SIPs automate this discipline and leverage rupee cost averaging.
1% Expense Ratio Costs You 20% of Wealth
Over 20 years at 12% gross return, a 1% expense ratio reduces your corpus by roughly 15-20%. Direct mutual fund plans save 0.5–1% vs. regular plans. On a Rs.1 crore corpus, that is Rs.15–20 lakh saved — always choose direct plans.
The 1% CAGR Rule Over 20 Years
A 1% higher CAGR compounded over 20 years increases your final corpus by approximately 22%. Going from 11% to 12% CAGR on Rs.50 lakh grows to Rs.4.04 Cr vs Rs.3.31 Cr — a Rs.73 lakh difference from just 1% higher return.
Diversify to Reduce Return Volatility
Diversification across equity, debt and gold reduces portfolio volatility without necessarily reducing long-run returns. A portfolio of 70% equity, 20% debt, 10% gold has historically delivered 10–11% CAGR with significantly less drawdown than 100% equity.
Tax Loss Harvesting Saves Real Money
Realise losses before year-end to offset gains and reduce LTCG tax. Equity LTCG above Rs.1.25 lakh/year is taxed at 12.5%. Systematic harvesting of the Rs.1.25 lakh annual exemption each year builds tax-free wealth over time.
Increase SIP with Every Pay Hike
A Step-Up SIP that increases by 10% every year can build 40–60% more wealth than a flat SIP over 20+ years. The extra contributions in early years benefit from the longest compounding period — align salary hikes with SIP hikes every April.
Never Redeem During a Crash
Panic-selling during a market crash locks in permanent losses. Historical data shows that every Indian market crash since 1991 has been fully recovered within 1–3 years. Redeeming at -30% and re-investing when the market is up means you miss the entire recovery.
Compare CAGR, Not Absolute Returns
An investment that doubled in 10 years (7.2% CAGR) underperformed one that grew 2.5x in 8 years (12.1% CAGR). Always use CAGR to compare investments held for different periods — absolute return alone is misleading across different time horizons.
Frequently Asked Questions
Common questions about CAGR, absolute return, real return, tax impact and investment benchmarks