Compound Annual Growth Rate measures the steady rate of return needed to grow an investment from initial to final value over a period, assuming profits are reinvested.

What is a good CAGR for investments?

For equity mutual funds in India, a 12-15% CAGR over 10+ years is good. For FDs, 6-7% is typical. Nifty 50 has historically delivered ~12% CAGR.

What is the difference between CAGR and absolute returns?

Absolute return = total percentage gain. CAGR = annualized rate. CAGR is more useful for comparing investments of different durations.

Can CAGR be negative?

Yes, if the final value is less than the initial value. This indicates a loss-making investment.

CAGR Calculator

Calculate the Compound Annual Growth Rate of your investment. Find out how your portfolio has grown on an annualised basis.

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Portfolio Growth Projection

Understanding CAGR — The Formula & How It Works

The CAGR formula is:

CAGR = (Final Value / Initial Value) ^ (1 / n) − 1

Where n is the number of years. The result is expressed as a percentage. For example, if your ₹1 lakh investment grew to ₹3 lakh in 10 years, the CAGR is approximately 11.61%.

Important Note About CAGR and Equity Investments

CAGR assumes steady, uninterrupted growth — which is never the reality for equity investments. A mutual fund showing 12% CAGR over 10 years may have had years of -30% returns and +50% returns. CAGR smooths this out. Always consider standard deviation and downside risk alongside CAGR.

Compare your CAGR results with our SIP Calculator to see how regular investments grow, or use our FD Calculator to compare against fixed deposit returns. Return to the EMI Calculator home for more tools.

Frequently Asked Questions

Compound Annual Growth Rate measures the steady rate of return needed to grow an investment from its initial to final value over a given period, assuming profits are reinvested each year. It is the best metric for comparing growth across different time horizons.

For equity mutual funds in India, a 12–15% CAGR over 10+ years is considered good. For Fixed Deposits, 6–7% is typical. The Nifty 50 index has historically delivered approximately 12% CAGR over the long term.

Absolute return is the total percentage gain on your investment, regardless of time. CAGR is the annualised rate of growth. CAGR is far more useful when comparing two investments held for different durations.

Yes. If your final investment value is less than the initial value, the CAGR will be negative, indicating a loss-making investment over the given period.