Last Updated on September 21, 2016
This calculator returns the CAGR value based on Chit fund cash flows using Excel’s XIRR and IRR functions. Even if you have no interest in chit funds (good for you!), if you are someone who uses Excel to calculate returns (of any financial instrument), I strongly urge you play with this calculator as it highlights the limitations of estimating returns for complex cash flows.
Credits:
Reader R. Siva Prasad, requested that I make this calculator to try and make sense of chit fund returns. Earlier, reader Hari sent a video link which pointed out the limitations of XIRR and IRR when he saw my Investment Returns (XIRR) Calculator
Motivation: I am not a fan of chit funds. I did this for two reasons: Siva Prasad requested it and I saw it as a perfect example for illustrating the limitations of calculating returns for complex cash flows and therefore of the XIRR and IRR functions! No fault of Excels. That is just the way the cookie crumbles.
Chit fund Primer: The way a chit fund operates amazes me. A group of people get together and decide to pay an equal sum of money for a few months. Each month the group members bid on the total amount collected. The person with the lowest bid receives the amount after deducting commission or operating charges and can no longer take part in the bidding. The remaining amount is distributed equally to all the members.
How the calculator works functions:
- CAGR using Excels IRR: If you wish to assume the payment and receipts each month are made on the same date then you need not enter the dates of payment and receipts. However,I strongly suggest that you do.
- CAGR using Excels XIRR: In this case the dates of payments and receipts should be entered (along with amounts of course!).
- Observe the results!
Download the Chit Funds Returns Calculator
Use this calculator to
- advice your friends or clients not to use chit funds.
- think about the limitation of XIRR and IRR!
Bottom line: Do not enter into chit fund schemes looking for returns. It is one thing to get poor returns, quite another when you cannot even calculate them!
How to profit from content writing: is our new ebook for those interested in getting side income via content writing. It is at available at a 50% discount for Rs. 500 only!
Use our Robo-advisory Excel Template for a start-to-finish financial plan!
Join our courses in exclusive Facebook Groups!
- 520+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
- Goal-based portfolio management! Join 2125+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content) in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author

About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Your Ultimate Guide to Travel

Free android apps
- All calculators from our book, “You can be Rich Too” are now available on Google Play!
- Install the Financial Freedom App! (Google Play Store)
- Install Freefincal Retirement Planner App! (Google Play Store)
- Find out if you have enough to say "goodbye" to your employer (Google Play Store)