What are DP charges?

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When I was working with Zerodha I used to get a lot of queries regarding DP charges ki sir ye DP charge kis leye deduct hua hai? Is it a hidden charge? Etc.

A few months back, I had also written a blog regarding the list of charges while trading and investing in shares, you can check that blog here

In that also, I had mentioned DP charges in brief but today in this blog I'll explain more in detail with examples.

Wait, but before that let's understand what does a DP mean, so the full form of DP is Depository Participant. Now, who is a Depository Participant?

In India, there are two depositories NSDL and CDSL. A Depository is a government body where your actual demat account gets opened which means even If in future a broker defaults then your shares would be safe with the Depositories.

A broker is just an intermediary between the Depository and the Investor. A broker has to take the membership of any of the Depository, after becoming the member, the broker is known as Depository Participant (DP).

I'm sure now you must have understood what does a DP mean :)

Now let's get into our topic of What are DP charges?

A DP charge is a fee charged by the DP (Broker) and the Depository (CDSL/NSDL). It is applicable whenever you sell your shares from your holdings or demat account.

If you do intraday, buying and selling on the same day then it is not applicable.

At Zerodha, the DP charge is Rs 13.5+Gst, so here Zerodha receives Rs 8 and CDSL receives Rs 5.5 and it is charged per day per scrip/company basis irrespective of quantity.

Let's understand with a few examples:

• Say you have 100 shares of ABC in your demat account and you wish to sell all the 100 shares on Monday, so here you only have one company's shares hence you will be charged only Rs 13.5+Gst while selling.

• Say you have 50 shares of XYZ and you wish to sell 25 shares on Monday and 25 shares on Tuesday, so here again you have one company's shares but you are selling on two different days hence you will be charged Rs 13.5+Gst twice, One on Monday and another one on Tuesday.

• Say you have 100 shares of DEF and 100 shares of PQR and you wish to sell both the company's shares on Wednesday, so now you have two different companies' shares hence you will be charged Rs 13.5+Gst twice.

I hope you're clear with the DP charges, If you have any queries do let me know in the comments :)

See y'all in the next blog, Cheers!



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