Depository Participant Charge: What Are DP Charges And Why Do They Matter?

For most retail traders, brokerage fees get the attention. They’re easy to spot, clearly printed on the contract note, and often used as a selling point by brokers to attract customers. But beyond brokerage, there’s another cost quietly deducted from trading accounts: Depository Participant (DP) charges.

Unlike variable costs in the case of brokerage and stamp duty, DP charges are fixed per transaction, irrespective of trade size. This return is relatively modest on paper, but it can add up over time, especially for active traders.

What is Depository Participant?

Depository Participants (DP): A Depository Participant in India is an intermediary between the investors and the central depositories of the country- National Securities Depositories Limited and Central Depositories Services Limited.

A DP can be a brokerage firm, a bank, or a financial institution authorised to open and maintain demat accounts. Through these accounts, investors can store shares, bonds, ETFs, and other securities in electronic form.

Because investors cannot directly open accounts with NSDL or CDSL, a DP’s role is unavoidable. Whether the account is with a full-service broker or a discount brokerage, the DP is the point of access to the depository system.

How are DP charges applied?

DP charges come into play only on sell transactions from a demat account. When shares are sold, the DP initiates the debit process with the depository. Each such debit attracts a fixed DP fee, which is passed on to the investor.

The key point: this fee applies per ISIN per day, not per trade size. Selling one share or a thousand shares of the same company on the same day attracts the same DP charge. However, selling shares of different companies will trigger separate DP charges for each.

What are the current DP charge rates?

As per depository structures, NSDL and CDSL levy nearly similar base charges on DPs, which are then passed on to clients with an added margin by brokerage platforms. It is important to note that the margins vary with each platform.

While these are the base levies, brokers may set their own rates, often in the Rs 12.50– Rs 25 range plus GST, depending on their cost structures. The actual rate is not usually visible in the contract note but reflected in the ledger statement.

Is There A DP Charge For Intraday or Futures?Intraday equity trades are squared off before settlement, and the shares do not move into and out of the demat account. Also, Futures and Options trades are settled in cash so they do not involve any depository movement for settlement hence exempt from charges. Such trades are, however, not a waiver for anything; BTST (Buy Today Sell Tomorrow) trades do not automatically fall under the exception. And even though BTST shares are delivered before they are credited in the demat account, they may still reside for one day in the account due to settlement timings and this is considered as a compulsory delivery, which would provoke such an amount.