What do dp charges mean?
Mr. Sharma, 32, has recently started dabbling in stocks and bonds. Last month, while attempting to sell a specific stock, he became perplexed by a small charge charged on his purchase in addition to his trading fee. Mr. Sharma then started looking through his Demat account's contract notes. However, he was unable to locate any details on this fee. Mr. Sharma was perplexed by an amount related to DP charges or payments. Let us assist him in thoroughly comprehending these charges.
Open a Demat Account
What are DP Charges, precisely?
Both sell purchases in your Demat Account are subject to Depository Participant (DP) fees. These payments are in comparison to brokerage and not included in the contract statements. Depositories and their participants earn money from DP payments. The DP fee is a fixed purchase fee that is applied independently of the volume sold. As a result, the price is base on the number of scrips sold rather than the total number. As a consequence, if you sell one or 100 shares, these payments stay the same.
Who levies DP charges?
Depositories and the depository participant all impose DP costs. National Securities Depository Limited levies the tax if the stock is part of the Nifty index (NSDL). Central Depository Securities Limited enforces the tax if the inventory listed on the BSE (CSDL). A depository member acts as a go-between for depositories and investors. Dealmoney is the depository participant, for example, if the Demat account is held with them. Depository members include banks, financial institutions, and stockbrokers.
Account opening fee, recurring maintenance fee, custodian fee, and transaction fee are the four types of charges (or fees) that depository members typically impose on a Demat account transaction.
Why are DP charges imposed?
To offer clients a Demat portfolio, a stockbroker must first become a depository investor. Furthermore, they must pay a subscription fee of lakhs to NDSL or CDSL and many other fixed costs and advanced prepaid transaction charges. To recoup these costs, the brokers charge an extra fee to their clients.