What is a good CAGR for an investment?

For Indian equity mutual funds, a 10–15% CAGR over 10+ years is considered good. Nifty 50 has delivered approximately 13–14% CAGR over the last 20 years. FDs return 6.5–8% CAGR. Real estate CAGR varies widely by location.

What is the CAGR formula?

CAGR = (Ending Value / Beginning Value)^(1/n) – 1, where n is the number of years. Example: ₹1L grows to ₹2.5L in 8 years → CAGR = (2.5)^(1/8) – 1 = 12.1%.

What is the difference between CAGR and absolute return?

Absolute return is the total percentage gain (e.g., 150%). CAGR annualises that gain to account for time. A 150% gain over 8 years = 12.1% CAGR. A 150% gain over 3 years = 37.5% CAGR. CAGR allows fair comparison across time periods.

Does CAGR account for dividends?

Standard CAGR uses only price appreciation. Total Return CAGR includes reinvested dividends. For mutual fund comparison, use the NAV-based CAGR from the fund factsheet which typically reflects all distributions.

TOOLS April 25, 2026 · 6 min read

CAGR Calculator: What Is CAGR and How to Measure Your Investment Growth Rate

Q: What is Nifty 50 CAGR over last 10 years?

As of early 2025, Nifty 50 has delivered approximately 12–14% CAGR over the last 10 years depending on the exact start/end dates. Sensex has similarly delivered 11–13% CAGR over long periods.

By Moneykar Team ·Finance Education · LinkedIn

CAGR is the most accurate way to compare investment returns across different time periods. Learn what CAGR means, how to calculate it, and how to use Moneykar's CAGR calculator.

⚠️ Educational content only. This article is for informational purposes and does not constitute financial advice. Consult a SEBI-registered advisor before making investment decisions. Full disclaimer →

When someone says their investment "returned 80% in 5 years," that sounds impressive — but is it? The answer depends entirely on when the return was earned. CAGR (Compound Annual Growth Rate) is the metric that standardises investment returns across different time horizons, making honest comparison possible. Moneykar's CAGR calculator does this in seconds.

What is CAGR?

CAGR represents the constant annual rate at which an investment would have grown to reach its ending value from its starting value, assuming profits were reinvested throughout. It answers the question: "If this investment grew at a steady pace each year, what would that pace be?"

It's the most widely used metric in finance for comparing mutual funds, stocks, real estate, and any investment held over multiple years.

CAGR formula and how to calculate it

CAGR = (Ending Value / Beginning Value)^(1/n) – 1

Where n = number of years.

Example: You invested ₹2 lakh in a mutual fund in 2017. In 2025 (8 years later), it is worth ₹5 lakh.
CAGR = (5,00,000 / 2,00,000)^(1/8) – 1 = (2.5)^0.125 – 1 = 0.1213 = 12.1% per year

→ Open CAGR Calculator

CAGR vs Absolute Return: why the difference matters

Investment	Start	End	Absolute Return	Duration	CAGR
Fund A	₹1L	₹2.5L	150%	8 years	12.1%
Fund B	₹1L	₹2.5L	150%	5 years	20.1%
FD	₹1L	₹1.7L	70%	8 years	6.9%

Funds A and B have the identical absolute return — but Fund B is far superior because it delivered that return in 5 years instead of 8. CAGR reveals this; absolute return hides it.

Benchmark CAGR figures for India (reference)

Nifty 50: ~12–14% CAGR over 20 years (price return, pre-tax)
Gold: ~10–12% CAGR in INR over 20 years
FD (large banks): ~6.5–8% CAGR
PPF: ~7–8% CAGR (fully tax-free)
Indian real estate: ~5–8% CAGR (varies widely by location)

These are historical references, not return guarantees. Past CAGR does not predict future CAGR.

When CAGR can mislead: the volatility problem

CAGR assumes smooth, steady growth. In reality, markets are volatile. An investment that fell 50% and then doubled shows a 0% CAGR — but an investor who sold during the fall locked in real losses. For volatile investments, use CAGR alongside Standard Deviation (how bumpy the journey was) to get a complete picture.

Frequently Asked Questions

What is a good CAGR for a mutual fund in India?

For equity mutual funds, 10–15% over 10+ years is generally considered good. Large-cap funds targeting Nifty 50-level returns aim for 12–13%. Small and mid-cap funds may target higher returns with commensurately higher risk.

What is the difference between CAGR and IRR?

CAGR assumes a single initial investment and single ending value. IRR (Internal Rate of Return) accounts for multiple cash flows at different times (like SIPs). For regular SIP investments, use IRR or XIRR, not CAGR.

Is 20% CAGR possible in India?

Exceptional fund managers and small-cap stocks have delivered 20%+ CAGR over specific periods. However, 20% sustained for 10+ years is extremely rare. Use 12–15% as a realistic planning assumption for diversified equity.

What is Nifty 50 CAGR over last 10 years?

Approximately 12–14% CAGR (price return) depending on exact period. Total returns including dividends are slightly higher.

Can CAGR be negative?

Yes. If your investment lost value, CAGR is negative. For example, ₹1L shrinking to ₹80,000 over 5 years = CAGR of approximately –4.3%.

Use CAGR Calculator →

Moneykar Team

Independent Finance Education · 15+ yrs Industry Experience

Content generated with AI and reviewed for accuracy by our finance team. About Moneykar → · LinkedIn

🤖 AI Disclosure: This article was produced using AI assistance and reviewed by the Moneykar team for factual accuracy and editorial standards. All content is for educational purposes only — not financial advice.

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