What is DP Charges in Zerodha?

Short Answer

DP charges apply if you sell shares from your demat account. This is an income source for depositories (CDSL or NSDL) as well as its Depository participants (Stock brokers). DP charges are applicable only one time per scrip in a single day irrespective of the quantity you actually sell.

Detailed Answer

When you execute any trade, you always consider brokerage charges and you keep in mind that whenever you book profit, it should be more than the brokerage charges to be in a net gain situation.

But all our calculations mismatch many times, as there is one more charge that is levied which is not even reflected in contract notes. Yes, you read it right and these charges are known as DP charges.

So what actually are DP charges? Let’s try to understand:

What are DP charges?

DP stands for ‘Depository Participant’ which acts as an agent to the depository. They are intermediaries between the depository and the investors (i.e. NSDL/CDSL and you) providing you various services like Dematerialisation, Rematerialisation, transfer of securities, pledging of securities, corporate action benefits, etc.

So the DPs hold your securities, provide you various services and for that they charge you a fee, which is known as DP charges.

Therefore, DP charges are flat transaction fees levied when you sell any shares from your demat account irrespective of the quantity you sold. This is how depositories and its participants generate revenue and it is very much similar to how brokers charge brokerage or exchanges charge a transaction fee.

What is DP charges in Zerodha?

So, in case of Zerodha, these charges are levied by CDSL (the depository) and Zerodha (the Depository Participant).Current charges are at Rs. 13.5 per scrip for the stocks sold from your holdings. It must be noted that an additional 18% GST is added on Rs. 13.5 which effectively makes it Rs. 15.93.

So every time you sell your holdings, you will be charged Rs. 15.93 as DP charges along with the normal brokerage charged by Zerodha Broking Ltd.

However, w.e.f. 3rd May, 2019 Zerodha gave an advantage by waiving off DP charges (that were charged at Rs.5.5) on mutual fund redemption. This could indeed save you some money on mutual fund investment!

Why are they not shown in contract notes?

Lets see why DP charges are directly posted on ledger and do not appear on the contract note:

DP charge is levied on the stock movement out of your demat account managed by NSDL/CDSL (the depositories).

The contract note only captures charges related to trades executed on stock exchanges. And since DP charges are not associated with your trade, they are not reflected on contract notes but are levied separately on your ledger.

Can we avoid DP charges?

This is a very common doubt that traders ask. And the answer is NO.

In fact, DP charges are levied when you sell shares from your demat account, no matter you open an account with any of the stock brokers in India. The rate may differ from broker to broker, some charge on the higher side while others stick to a nominal fee.

You cannot skip paying DP charges in delivery trades. However you can move away from selling holdings to avoid them. So, if you do intraday trading, take BTST trade, or trading in the futures segment, you can avoid DP charges.

Tagged With: Zerodha ReviewZerodhaDP charges in ZerodhaZerodha DP chargesWhat is DP charges
Ask your query and our expert community would be happy to help
Discussion (2)

    Zerodha DP charges are Rs. 13.5 + 18% GST as per depository (CDSL). It is charged always whenever traders sell their stocks after holding it for more than one day in demat account.

    DP stands for depository participants. Zerodha happens to be a depository participant for CSDL. When a user sells their shares from their Demat account, then a DP charge is applied. The charge is fixed irrespective of the number of shares in that particular order.

Related FAQs

What is DP charges in Zerodha Coin? Mutual Fund Redemption

Zerodha Coin has been made completely free. The DP Charges of Rs.5.5 per mutual fund redemption that were used to be charged in the past have now been waived off. So, you don't have to pay any DP charges on mutual fund redemeptions.

What is GTT in Zerodha? Charges & How can I use it?

GTT in Zerodha is an acronym for the Good Till Trigger feature offered by Zerodha that lets the investor select a trigger price and a set of predetermined conditions that as and when are met, an order is placed automatically.

How to find DP ID in Zerodha?

Zerodha is India’s largest Stockbroker and has more than 3.4 million active clients. The DP ID is a unique 8 digit number that is used to identify your Stock Broker or any other Financial Institution. If you want to find your DP ID (Depository Participant) for any particular reason, follow the mentioned steps to get it easily.

How to sell CNC shares in Zerodha?

Zerodha is India’s largest and most trusted Stock broker with more than 3.4 million active users. Selling shares in CNC is very simple in Zerodha. To sell any share in CNC you must possess that stock in your Demat order to sell it in CNC. Learn how to sell your shares in detail.

Is Paytm Money better than Zerodha?

You wish to know if Paytm Money is better that Zerodha or it's the other way round. Zerodha being a leading discount broker in India has been there for overe a decade now. While Paytm Money already established in mutual fund investment arena, but a fairly new entrant in stock broking industry. So, let's compare the features and discuss few details on each of them.

Is Streak free for Zerodha users?

Streak is an online Options trading and Algo trading platform introduced by Zerodha in 2018. it was Free at the time of launch to Zerodha users but that was a limited-time offer and soon Streak started charging for subscriptions also for Zerodha users. But Zerodha users get a 7 day free trial period on Streak posy which one will have to choose a plan as per their needs to continue using Streak.

How to apply IPO in Zerodha? Buy IPO Online

If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.

How to withdraw money from Zerodha Trading Account?

To withdraw money from your Zerodha trading account, you need to place a withdrawal request by logging into Zerodha Console. Withdrawal of money is completely free. As per regulations, the withdrawal money will be credited only to the bank account which is mapped with Zerodha.

What is NFO in Zerodha? How to invest in it?

NFO in Zerodha is the abbreviation of "New Fund Offer". It refers to the introductory offer of a scheme by an AMC (Asset management company). An NFO is raised when a fund is launched and this will help the firm to raise capital for purchasing securities. 

How to Check IPO allotment in Zerodha?

There are many ways to check the IPO allotment status but Zerodha doesn't provide this facility on their website. To check the allotment status you can visit the website of the registrar of the IPO, for example, Link Intime, Karvy. With the help of a PAN number, you can easily check the status.