What Happens to Dividends and SGB Interest in Your XIRR Calculation?
Dividends and SGB interest go straight to your bank — not your broker. Your fund statement can't capture them. Here's why they need to be added manually for an accurate XIRR.
If you hold dividend-paying stocks or Sovereign Gold Bonds, you've probably wondered: does my XIRR account for the dividends and interest I receive?
Right now — no, it doesn't automatically. Here's why, and what the correct approach is.
Why Dividends and SGB Interest Are Missing From Your Fund Statement
When a company pays a dividend or the RBI credits your SGB interest, the money lands directly in your bank account — not your broker account. Your broker's fund statement only captures money that actually moves in or out of your broker account.
Dividends and SGB interest never pass through your broker. So they never appear in the fund statement — and xirrledger, which reads the fund statement, has no way to see them.
The Inflow vs Outflow Problem
This is where it's easy to get confused.
In XIRR, every cash flow has a direction:
- Outflow — money you invest (negative). Every deposit to your broker, every SIP, every fresh transfer.
- Inflow — money you receive back (positive). Withdrawals from broker, and the current portfolio value as a final inflow.
Dividends and SGB interest received in your bank are inflows — real income generated by your investments. To include them in XIRR, they need to be recorded as positive cash flows on the date you received them.
If you transfer dividend money back to your broker to buy more stocks, that transfer is a new outflow (fresh capital deployed) — it is not the dividend inflow. These are two separate events. The dividend income itself is never captured by the fund statement either way.
A Concrete Example
Say you hold 100 shares of a stock that pays ₹10/share — ₹1,000 total dividend.
What the fund statement sees:
- Nothing. The ₹1,000 went to your bank, not your broker.
What XIRR should see for a complete picture:
[Dividend received] 15-Jun-2025 +₹1,000 (inflow)
Without this entry, your XIRR is calculated as if those ₹1,000 never existed. Your investments generated that income, but the calculation doesn't credit you for it.
The Same Problem Applies to SGB Interest
SGB pays ~2.5% per year as semi-annual interest, credited directly to your bank. The SGB bond itself sits in your demat at market value — that's already in your portfolio value. But the interest payments are separate income that bypasses your broker entirely.
To include SGB interest in your XIRR, each payment needs to be added as a manual inflow on the date it was received.
What xirrledger Currently Does
xirrledger currently supports manual entries for outside investment outflows — SGB purchases, RBI bonds, ESOPs — anything you paid for outside your broker ledger.
Manual inflows (dividends received, SGB interest received) are not yet supported. This means if you receive regular dividend or interest income that you don't reinvest, your XIRR from xirrledger is currently understated by that amount.
This is a known gap and something we're actively working to fix. The solution is a manual inflow entry — same concept as outside investments, but in the positive direction.
What You Can Do Right Now
Until manual inflows are available, the most accurate workaround is to reinvest your dividends and SGB interest back into your broker account. Once that transfer hits your fund statement as a Bank Receipt, xirrledger picks it up as a new outflow — not as the dividend inflow, but at least your capital base is correctly tracked.
For a truly complete XIRR including all income, manual inflow entries are the right answer. That's coming.
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