Zerodha is the discount broker known for charging the minimum brokerage fees. But what is about the debit transaction charged by depositories? Is it free? For this let’s have a quick look at the DP charges in Zerodha.
What are DP Charges in Zerodha?
DP charges in Zerodha is ₹13.5 per scrip per day.
DP Charges in Zerodha
₹13.5 per scrip+18% GST
But what are these charges, why it is charged, and how you can avoid such charges?
Well for that let’s understand its meaning.
Now as already known that every stockbroker is registered with the depository, NSDL or CDSL, or both. These depositories are meant to maintain and operate a Demat account and to provide service it imposes certain charges.
These charges are called DP charges and are generally fixed by the depositories. However, the brokers are free to provide these services at their own fee structure.
This makes it important for you to know what these DP charges are, how and when they are charged. Above all, what DP charges in Zerodha are.
DP charges or Depository Participant charges are the fees charged on the debit of holdings from the Demat account.
Let’s make it simpler for you.
You open a Zerodha Demat account, with the objective to hold shares, bonds, ETFs, etc. When you buy shares they are transferred to your Demat account but when you sell it, a certain process is involved in transferring your holdings from your account to the buyer’s Demat account.
This transaction thus involves certain charges which are needed to be paid in the form of DP charges.
Let’s now have a look at the DP charges charged for different trade products.
DP Charges in Zerodha for Delivery
Delivery trading as the name suggests involves the delivery of shares in the Demat account. Thus whenever you sell equity delivery shares, you need to pay the debit transaction fees to the broker.
Here the DP charges for delivery trade in Zerodha is ₹13.5 plus GST per scrip.
Now here one must note that these charges are applicable only on the scrip and not on a number of shares. So whether you sell 10 shares or 100 of one scrip, DP charges remain the same.
DP Charges in Zerodha for Intraday
Next to the delivery, there is the intraday trade, which involves buying and selling shares within the day. Since as per the SEBI rule, it takes T+2 days to credit the shares in the Demat account, thus in the case of intraday trading, no shares get credited to your account.
This is because no credit or debit of shares takes place to and from your Demat account. Thus, for all intraday trading in Zerodha, you do not have to pay any DP charges to the broker.
DP Charges for BTST in Zerodha
BTST or Buy Today Sell Tomorrow did not involve the DP charges earlier. This is because of the settlement rule, which states the shares are transferred to the Demat account after two days of trading, so if you trade on Monday then the transfer of shares will be after market hours on Wednesday.
But with the new settlement rule, the shares are transferred to the clearing corporation directly from the client’s Demat account via EPI of securities.
Thus, with this new rule, the DP charges are charged as in delivery trade. So here again the DP charges for BTST in Zerodha is ₹13.5 plus GST per scrip per day.
DP Charges in Zerodha for Mutual Funds
Here comes another segment of trading, Mutual Funds. So are DP charges applicable on the mutual funds?
Earlier Zerodha imposes the DP charges of ₹5.5+GST for the redemption of mutual funds, but with the free Subscription of Zerodha Coin, these DP charges are waived off and hence one can now invest in mutual funds in Zerodha without worrying about any additional charges.
Where to See DP Charges in Zerodha?
Now, why do most of the investors remain unaware of DP charges in Zerodha?
This is because the details of the DP charges are not provided in the contract note. This is because it includes the information of trading cost and since DP charges and trading cost are dissociated, hence it is not provided on the note.
So where can you find the DP charges?
These charges can be seen in the ledger which you can easily access in the Zerodha Kite.
How to Calculate DP Charges in Zerodha?
After discussing the charges, let’s have an understanding of how DP charges are calculated.
For this, let’s revise the charges, which is ₹13.5 per scrip plus 18% GST. To understand this, let’s consider one example.
Let’s suppose you buy 100 shares of X and 100 shares of Y. Now one fine day, you decided to sell off 50 shares of X.
Here the DP charges would be: ₹(13.5+2.43)
Let’s make the concept and calculation of DP charges more clear by considering the case where you sell, 50 shares of X in the morning and the remaining X shares in the afternoon.
So what do you think, how much DP charges would be applicable?
Since DP charges are charged per scrip and not on the number of shares, hence the DP charges would be
But wait these charges remain the same if you sell 50 shares of X in the morning and 50 shares of Y in the afternoon?
Here the answer is NO!
Wondering why, because you sell shares of two different scrips, and hence the charges would be:
=₹[(13.5+2.43) for X+ (13.5+2.43)] = ₹[15.93+15.93] =₹31.86
Thus, from the above example, it is clear that how DP charges are charged on selling shares of different scrips.
Does the above calculation seem to be confusing and complex to you? Let’s make it simpler and easier for you.
You can now calculate these charges with the help of the brokerage calculator.
To evaluate the fees, just select the delivery trading option and enter a few details and click on Calculate. Here along with the brokerage fees, you would be able to calculate the DP charges charged on selling the scrip.
How to Avoid DP Charges in Zerodha?
Well, there is no way to avoid DP charges in case you trade in the delivery segment, but there are other trading and investing options that give you an opportunity to save the Depository Participant charges.
Trading in intraday does not involve debit or credit of shares in the Demat account, hence no DP charges are imposed.
Other than this trading in futures and options prevent you from paying the DP cost.
Also, the investment in mutual funds does not impose any DP charges.
These are some of the ways where you can avoid DP charges in the stock market.
Apart from the DP charges, there are some hidden charges that are charged by the stockbrokers. So before opening an account it is good to check all kinds of fees and make sure that you open an account with the right stockbroker.
In case you are looking to get started with your stock market investments, let us assist you in taking the next steps ahead.
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