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What are DP Charges (Depository Participant charges)?

DP charges, or Depository Participant charges, are fees levied by depositories (such as NSDL and CDSL) when you sell shares from your Demat account. These charges are collected by your broker on behalf of the depository and typically apply per transaction, regardless of the number of shares sold. While buying shares does not attract DP charges, selling them does, making it essential for investors to be aware of these costs when trading.

Who are Depository Participants?

The key intermediary that connects the stock market and the investors is a DP or Depository Participant. A DP can also be a stockbroker if it provides Demat & Trading account. E.g., Bajaj Broking is a DP as well as a stockbroker, it facilitates the buying and selling of stocks along with offering a Demat Account.

DP Charges on Share Sale    

Any DP levies charges whenever there is sale of shares from your Demat Account. These charges are flat transactional fees or dependent on the transaction value. If for example, your stockbroker sets DP charges as flat INR 10, you’d pay Rs. 10 by selling 100 shares and Rs. 10 on selling 1000 shares. Note that you can’t view these charges in the contract notes.

The DP charges for Bajaj Broking are ₹50 or 0.0002% of transaction value whichever is higher + applicable taxes.

Elements of DP Charges

DP charges encompass various components, each serving a specific purpose. These charges are incurred when securities are moved in or out of your Demat account. The primary elements of DP charges include transaction fees, account maintenance fees, and custodian fees. These charges vary depending on the depository participant and the nature of transactions. For instance, the transaction fee is charged for each debit transaction, while account maintenance fees are usually annual charges for maintaining your Demat account.

Who Levies DP Charges?

Depository participant charges are levied by the depositories and the depository participant. These are charges levied on all sell transactions of delivery orders. Depending on the depository with which the broker is associated, DP charges will be collected.

Why are DP Charges Levied?

DPs are registered to depositories like the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The role of NSDL and CDSL is that maintains and secure the record of all your shares in the demat account. In simple terms, it is very similar to cloud storage, on a massive scale. To maintain this huge amount of data, the depositories charge the DPs a membership fee for every demat account that is opened and maintained. They also charge the DPs for other activities associated with the demat account, such as Dematerialization, Rematerialization, Pledging, Unpledging, Off-Market Transfer, etc. To maintain such costs, DPs charge their demat account holders. Thus, the DP charges are levied from the customers.

How much DP charges are levied?

Depository Participant (DP) charges are levied every time you sell shares from your Demat account. These charges are not fixed across brokers and typically range between Rs.10 to Rs.25 per ISIN (stock), per day, irrespective of the number of shares sold. DP charges are not visible during trading but are deducted separately from your ledger or trading account.

Here are some key points to understand:

  • DP charges are levied only on the sell side, not when you buy shares.
  • Charges are applied per ISIN per day, so selling the same stock multiple times in a day attracts only one DP charge.
  • Both CDSL and NSDL levy these charges, and your broker may add their own fee.
  • These are not included in the brokerage fee, and they are non-negotiable.
  • DP charges can vary by broker, so check the broker’s fee structure before trading.

Can I Avoid Paying DP Charges?

The DP charges levied are different for different participants. The charges levied by Bajaj Broking are mentioned below:

The DP charges for Bajaj Broking are ₹50 or 0.0002% of transaction value whichever is higher + applicable taxes.

Usually, DP charges do not reflect on your contract note.

Type of ChargeCharges
Account Opening ChargesNIL
Annual Maintenance ChargesNIL
Pledge/Unpledge/Closure/Invocation ChargesRs. 35 + applicable taxes
Physical CMR/DISFirst CMR/DIS request is free. Post that Rs.50 + Rs 100 Courier charges + applicable taxes
Dematerialisation Request ChargesRs.50 per request + Rs. 50 per certificate
Re-materialisation Request ChargesRs. 35 per certificate or per 100 shares and part there of whichever is higher and Rs. 25 per re-state of statement of account redemption

DP charges are collected by all stockbrokers on sell-side transactions. However, this is levied only in the case of delivery trades. While trading in intraday, derivatives (futures and options), and BTST, DP charges are not levied. The reason they are not levied is that there is no delivery of shares involved in it. So, if you do not want to pay DP charges, the only way to avoid it is by trading in other segments like Futures and Options. If you are investing in shares for the long term, then you must pay the DP charges.

 

Also Read: What Happens If My DP Shuts Down

Conclusion

DP charge is levied whenever shares are sold from the demat account It’s better you know the meaning of DP charges first and then go ahead with the selling of your shares. In case you wish to invest in the stock market, then you must consider DP charges, as they can influence your profit margin in the end.

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Frequently Asked Questions

What is a depository?

Answer Field

A depository is an institution that holds and manages securities in electronic form, facilitating their transfer and safekeeping.

Who are depository participants?

Answer Field

Depository participants (DPs) are intermediaries registered with depositories, providing depository services to investors. 

What are depository charges?

Answer Field

Depository charges are fees levied by depositories for maintaining and managing securities in electronic form.

Are DP charges applicable for intraday trading?

Answer Field

DP charges are not typically applicable for intraday trading as no actual transfer of securities occurs in your Demat account.

How are the DP charges calculated in Bajaj Broking?

Answer Field

DP charges at Bajaj Broking are calculated based on the type and volume of transactions. Our transparent fee structure ensures you know the costs upfront. Here is a detailed view of all the charges. https://www.bajajbroking.in/pricing

Why are DP charges high?

Answer Field

DP charges may seem high due to the cost of maintaining and managing securities, ensuring their safekeeping, and facilitating smooth transactions.

Why am I charged DP charges?

Answer Field

DP charges are levied for using the depository's infrastructure to transfer shares from your Demat account to the buyer when you sell. These are collected by your broker on behalf of depositories like CDSL or NSDL and are charged per stock per day, irrespective of the quantity.

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Disclaimer :

The information on this website is provided on "AS IS" basis. Bajaj Broking (BFSL) does not warrant the accuracy of the information given herein, either expressly or impliedly, for any particular purpose and expressly disclaims any warranties of merchantability or suitability for any particular purpose. While BFSL strives to ensure accuracy, it does not guarantee the completeness, reliability, or timeliness of the information. Users are advised to independently verify details and stay updated with any changes.

The information provided on this website is for general informational purposes only and is subject to change without prior notice. BFSL shall not be responsible for any consequences arising from reliance on the information provided herein and shall not be held responsible for all or any actions that may subsequently result in any loss, damage and or liability. Interest rates, fees, and charges etc., are revised from time to time, for the latest details please refer to our Pricing page.

Neither the information, nor any opinion contained in this website constitutes a solicitation or offer by BFSL or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.

BFSL is acting as distributor for non-broking products/ services such as IPO, Mutual Fund, Insurance, PMS, and NPS. These are not Exchange Traded Products. For more details on risk factors, terms and conditions please read the sales brochure carefully before investing.

Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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For more disclaimer, check here : https://www.bajajbroking.in/disclaimer

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