DP Charges means a charge which is applicable when you sell the shares from your Demat account. These charges have a fixed rate irrespective of the number of shares you sell.
In this article, you will learn what are DP Charges, why such charges exist, and who levies such charges, all with an example of real trade.
Let’s get started!
- What are the DP Charges?
- Depository Charges.
- DP Transaction Charges-Alice blue
- DP Charges explained with a real-world example.
- DP Charges for Intraday Trading.
- Quick Summary
- FAQ(Frequently Asked Questions)
What is DP Charges?
The full form of DP Charges is Depository Participant Charges. DP Charges means a charge which is applicable when you sell the shares from your Demat account. These charges have a fixed rate irrespective of the number of shares you sell.
DP charges are levied by a Stock Broker (Depository Participant) & Depository (NSDL & CDSL).
Learn more about NSDL & CDSL here.
So who is a Depository?
Depositories (NSDL & CSL) are the government bodies that provide Demat services to the stock brokers. Every Stock Broker is registered with NSDL or CDSL or Both and is called a Depository Participant. All the shares you buy in the stock market are stored safely with the Depositories and not Stock Brokers.
Also read: Depository Participant Meaning.
What are Depository Charges?
Depositories (NSDL & CDSL) provide Demat services to investors via Depository Participants (Stock Brokers), hence they do not charge the investors directly. Depository Participants charge the investors and can have their own fee structure.
So the Depository charges shall vary depending on the Stock Broker you choose and come included in the DP Charges charged by the stock broker.
DP Transaction Charges – Alice blue
As you already know DP charges vary with different depositories and stock brokers. Alice blue is a registered member of CDSL and charges ₹ 15 + GST per sell transaction. Do note that these charges are inclusive of Alice blue & CDSL Charges.
Check out some of the Demat Transaction Charges that come attached along with DP Charges:
|Other Demat Transaction Charge||Charges|
|Account Maintenance Charges||400 + GST|
|Pledge Services (Creation/Closure/Invocation)||₹ 15 + GST for Buy and ₹ 15 for Sell|
|Dematerialization + Dematerialization Request||₹ 10 per certificate + ₹ 50 per request|
|Rematerialization||₹ 30/- per Request + NSDL/CDSL Or ₹ 10/- for every hundred securities Or Part thereof a flat fee of ₹ 10/- per certificate whichever is higher|
How DP Charges are Calculated – Explained with a real-world example
Assume you have shares worth ₹ 10 lakh in your Demat account out of which you want to sell shares worth ₹ 2 lakhs.
If you are an Alice blue client, you will be charged ₹ 15 + 0.18 = ₹ 15.18 DP Charges on the sell transaction.
DP Charges for Intraday Trading
Usually, people get confused if DP Charges are applicable for Intraday Trading. The answer is “NO”, in intraday you will be buying and selling shares within a single day and the shares will not be delivered to your Demat account.
DP Charges are levied only when you use the services of the Demat account (i.e. when you sell shares from your Demat account).
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, and hence we bring you the important topics and areas that you should know:
- Depository Participants (DP) can simply be called agents of the depository, usually, depository participants are also stockbrokers. If a new investor intends to open a Demat account it can only be done through a depository participant.
- But this service comes at a cost, i.e., DP Charges. The full form of DP Charges is Depository Participant Charges. DP Charges means a charge which is applicable when you sell the shares from your Demat account.
- DP charges vary with different depositories and stockbrokers. Alice blue is a registered member of CDSL and charges ₹ 15 + GST per sell transaction. Do note that these charges are inclusive of Alice blue & CDSL Charges.
- There are no DP charges for intraday trading.
FAQ(Frequently Asked Questions)
1. Can DP charges be avoided?
No, DP charges cannot be avoided. These charges are applicable when you sell the shares from your demat account. One way where you can avoid DP Charges is when you do intraday.
2. Are DP charges same for all brokers?
No, DP charges are not similar for all the brokers. It depends on the type of service the broker is providing. Normally the charges are higher for a full service broker and lower for a discount broker. Then comes Alice Blue, which is an amalgamation of both the brokers and charges the lowest brokerage.
3. Which broker has less DP charges?
Alice Blue has the LOWEST DP charges among the top stock broking firms. It offers the benefits of a ful service broker at a price which is 25% lower than the major discount stock brokers. You refer to the famous FREEDOM 15 Plan here.
4. What is DP AMC charges?
DP AMC Charges are nothing but the Annual Maintenance Charges on the Demat Account you hold with the Stock Broker. You may check the AMC charges of Alice Blue here.