What are DP charges (depository participant charges)?
Depository Participant (DP) charges are
applicable to any sell transactions in your Demat Account. These charges are in
addition to brokerage and are not included in the contract notes. Depositories
and their participants get income via DP charges.
DP charges are a set transaction fee,
regardless of the amount of shares sold. As a result, the charges are based on
the number of shares sold rather than the total volume of shares sold. So,
whether you sell one share or 100, the charges stay the same.
Who
levies the DP charges?
DP charges are imposed by both depositories
and depository participants. If the stock is part of the Nifty index, the tax
is imposed by National Securities Depository Limited (NSDL). The tax is imposed
by Central Depository Securities Limited if the stock is listed on the BSE
(CSDL). A depository participant acts as a link between depositories
and investors.
Account opening fee, yearly maintenance
cost, custodian fee, and transaction fee are the four types of charges (or
fees) that depository participants often levy for a Demat account transaction.
Why
are DP charges imposed?
A stockbroker must first become a
depository participant before offering customers a Demat account. Furthermore,
they must pay a membership fee of lakhs to NDSL or CDSL, as well as various
additional fixed prices and advanced prepaid transaction charges. In order to
recover these costs, the brokers impose an additional fee to their
consumers.
The
fees charged by depositories
The fees charged by depositories are the
same for all sell transactions. The following are the charges:
CSDL charges Rs. 13 + Rs. 5.50 for demat
transactions.
NSDL charges Rs. 13 + Rs. 4.50 for demat
transactions.
Conclusion
It's important to keep in mind that, in
addition to the depository costs, each broker has their own set of charges. If
you're thinking about investing in the stock market, you should be aware of the
various fees and charges that are applicable wile trading.