Contents
- 1 ROI Calculator — Return on Investment & Annualised Return
- 1.1 Visual Breakdown
- 1.2 How to Use the ROI Calculator
- 1.3 What is ROI (Return on Investment)?
- 1.4 ROI Benchmarks Across Indian Asset Classes
- 1.5 ROI vs Other Return Metrics — When to Use What
- 1.6 Worked Examples
- 1.7 The Rule of 72 — Quick Doubling Estimate
- 1.8 Common Mistakes When Computing ROI
- 1.9 Frequently Asked Questions
- 1.10 Explore More Tools
ROI Calculator — Return on Investment & Annualised Return
Calculate absolute and annualised ROI on any investment, with chart-based gain breakdown and side-by-side comparison of multiple investment scenarios.
Visual Breakdown
How to Use the ROI Calculator
- Enter Amount Invested: The total capital deployed in rupees (initial principal).
- Enter Amount Returned: The total value at exit, including any dividends or interest earned along the way.
- Enter Duration: Investment period in years. Fractional values (e.g., 2.5 years) are supported.
- Review the Output: The calculator computes both absolute ROI (total %) and annualised ROI (CAGR), with a visual breakdown of invested capital vs gains.
What is ROI (Return on Investment)?
ROI measures the profitability of an investment as a percentage of the original amount invested. It is the single most widely cited investment metric — used by retail investors, fund managers, real-estate buyers, business owners evaluating capex, and corporate finance teams running NPV/IRR analyses.
The Two Formulas
Absolute ROI: ((Final Value − Initial Investment) / Initial Investment) × 100 Annualised ROI (CAGR): ((Final Value / Initial Investment)^(1/Years) − 1) × 100 Both are reported as percentages. Use absolute ROI for short-term/same-period comparisons; use annualised ROI when comparing investments held for different durations.
Why Annualised ROI Matters More Than Absolute ROI
An investment that doubles in 2 years is dramatically better than one that doubles in 10 years — both have 100% absolute ROI, but their annualised returns are 41.4% vs 7.18%. The annualised number is what allows honest cross-asset comparison.
ROI Benchmarks Across Indian Asset Classes
Typical long-term annualised ROI ranges for popular Indian investment options:
| Asset Class | Annualised ROI | Risk Profile |
|---|---|---|
| Bank Savings Account | 2.5 – 4% | Negligible (DICGC ₹5L cover) |
| Bank Fixed Deposit | 5.5 – 7.5% | Very low |
| PPF | ~7.1% (current quarter) | Sovereign-backed |
| Gold (SGB / ETF) | 8 – 10% | Moderate (commodity volatility) |
| Government Securities (10Y G-Sec) | 6.8 – 7.3% | Sovereign — interest rate risk |
| Corporate AAA Bonds | 7.5 – 8.5% | Low (credit + interest rate) |
| NIFTY 50 Index Fund | 11 – 13% | Equity volatility |
| Active Equity Mutual Funds (top quartile) | 13 – 16% | Equity + manager risk |
| Small-cap Mutual Funds | 14 – 18% (with high drawdowns) | High |
| Indian Residential Real Estate | 5 – 9% (city-dependent) | Illiquidity, transaction cost 5–8% |
| Pre-IPO / Startup Equity (HNI) | Highly variable; median often negative | Very high |
ROI vs Other Return Metrics — When to Use What
| Metric | Best For | When NOT To Use |
|---|---|---|
| ROI (Absolute) | Same-period comparison; quick gain measure | Comparing different durations |
| CAGR / Annualised ROI | Cross-asset comparison; long-term planning | SIPs or staggered investments |
| IRR / XIRR | Multiple cash flows (SIP, partial withdrawals) | Single lump-sum trades |
| Net Present Value (NPV) | Capex decisions; discounted comparisons | Quick retail measurement |
| Total Return (TR) | Mutual funds (with dividends reinvested) | Price-only comparisons |
| Sharpe Ratio | Risk-adjusted return comparison | Absolute gain assessment |
Worked Examples
Example 1: Reliance Stock
Bought 100 Reliance shares at ₹2,400 in 2022. Sold at ₹3,000 in 2025. Duration: 3 years. Total Invested = ₹2,40,000. Total Returned = ₹3,00,000. Absolute ROI = (60,000/2,40,000) × 100 = 25% Annualised ROI = (300000/240000)^(1/3) − 1 = 7.72% A modest annualised return — barely above bank FD. Reliance underperformed NIFTY 50 during this window (NIFTY did ~11%).
Example 2: SBI FD vs Equity Index Fund
₹5,00,000 invested for 5 years. SBI FD at 6.5%: Maturity = ₹6,84,930. ROI = 36.99%. Annualised = 6.50%. UTI Nifty 50 Index (illustrative 11% CAGR): Maturity = ₹8,42,540. ROI = 68.51%. Annualised = 11.00%. The index fund nearly doubled the absolute return, with higher volatility along the way.
Example 3: Real Estate ROI Reality
Pune flat bought in 2014 for ₹50 lakh; sold in 2024 for ₹85 lakh (10 years). Absolute ROI = 70%. Annualised ROI = 5.45%. After deducting registration cost (5% = ₹2.5L), brokerage (1% sale = ₹85K), and 10 years of property tax + maintenance (~₹3L cumulative), net realised ROI ≈ 60% absolute, ~4.8% annualised — barely above inflation. Add the illiquidity cost (months to sell) and real estate’s true ROI is often disappointing.
The Rule of 72 — Quick Doubling Estimate
Years to double your money ≈ 72 / Annualised ROI %. Examples:
- At 6% annual return → 12 years to double
- At 9% return → 8 years
- At 12% return → 6 years
- At 18% return → 4 years
- At 24% return → 3 years
The Rule of 72 is most accurate for returns between 6–10%; it understates time for higher returns. For exact doubling time, use: t = ln(2) / ln(1 + r) where r is the decimal annual return.
Common Mistakes When Computing ROI
- Forgetting taxes: Pre-tax ROI ≠ post-tax ROI. Equity LTCG (12.5% above ₹1.25L), debt fund slab-rate tax post-April 2023, and FD interest tax all materially reduce realised returns.
- Ignoring fees: Mutual fund expense ratio (0.5–2%), brokerage, STT, stamp duty. Use Direct plans and discount brokers to maximise post-fee ROI.
- Not adjusting for inflation: 8% nominal ROI in a 6% inflation environment is only 1.89% real return. Use our Real Return Calculator.
- Mixing absolute and annualised: “100% ROI” sounds great but reveals nothing about duration. Always ask “over how many years?”
- Cherry-picking start dates: ROI computed from a market bottom flatters. Use rolling-period ROI for honest assessment.
- Ignoring opportunity cost: 7% ROI on real estate looks fine until you compare to 11% from an index fund over the same period.
Frequently Asked Questions
Is ROI the same as CAGR?
Not exactly. ROI usually means absolute return (total % change). Annualised ROI is the same as CAGR. Always check which version someone is quoting.
What is a good ROI for stocks in India?
Long-term equity (10+ years): 11–13% CAGR for NIFTY 50 index funds; 13–16% for top-quartile active funds. Anything sustainable above 15% over 10 years is exceptional.
How do I calculate ROI on a rental property?
Two components: (a) Rental Yield = Annual Rent / Property Value × 100 (typically 2–3% in metros, 4–5% in tier-2), (b) Capital Appreciation = property price appreciation. Total ROI = Rental Yield + Annualised Capital Appreciation. Subtract property tax, maintenance, vacancy, and capital gains tax for net ROI.
How is ROI taxed in India?
Depends on the asset: Equity LTCG above ₹1.25L per year is 12.5%; STCG is 20%. Debt funds and bank deposit interest are taxed at slab rate. Real estate LTCG is 12.5% without indexation (post Budget 2024 — though grandfathering exists). Always compute post-tax ROI for honest comparison.
Can ROI be negative?
Yes — if the final value is below the initial investment. The calculator displays negative ROI in red and accurately computes the (negative) annualised return.
What’s the difference between ROI and ROE?
ROI = return per rupee invested. ROE (Return on Equity) is a corporate finance metric = Net Profit / Shareholders’ Equity, used to evaluate company profitability. ROE is reported in company financials; ROI is a personal investing measure.
How do I compute ROI on a SIP investment?
SIP has multiple cash flows over time — use XIRR instead of ROI. Our XIRR Calculator handles SIP returns correctly. The ROI calculator here assumes single lump-sum investment.
Should I use pre-tax or post-tax ROI?
Use post-tax ROI for personal decisions (your actual realised return) and for comparing tax-treated assets (e.g., PPF interest is tax-free; FD interest is fully taxed). Use pre-tax ROI for benchmark comparisons across assets.
How does ROI relate to risk?
Higher expected ROI requires accepting higher risk. The Sharpe Ratio (Return − Risk-Free Rate) / Standard Deviation measures risk-adjusted return. A fund delivering 16% with 30% volatility has lower Sharpe than one delivering 12% with 15% volatility.
Is real estate ROI in India really only 5–9%?
Yes — that’s the long-term average for residential property in most Indian cities. Specific micro-markets (Bangalore tech corridor 2010-2015, NCR Greater Noida 2005-2010) had brief outperformance windows, but average is much lower than the FOMO narrative suggests.