What Does Depository Participant (DP) Charge Mean?

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What Does Depository Participant (DP) Charge Mean?

For many young Indians, investing in stock markets and cryptocurrencies are an exciting new venture. While the latter is yet to find its stronghold in the country, stock markets have retained their allure. Thanks to the central government’s push for digitalisation, financial services have come closer even in the remotest corners of the country. One platform that comes with digital technology and financial planning is a depository — an electronic institution that stores your funds in shares and equities.

Before getting into the details of investing through depositories, it’s essential to comb out some of its tricky details, such as depository participant or DP charges and DP ID. 

What are Depository Participants?

To avail of the services associated with depositories, opening a demat account is the first step. It is a prerequisite for buying and selling equity shares in the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This process is facilitated through a DP, a broker that links account holders with depositories. These can be banks, financial institutions, or stockbrokers. A depository in India can be either Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL).

Both of these are associated with different promoters and DPs. Should you want to open a demat account, approaching a DP is a prerequisite. Some DPs associated with CDSL include Groww, AngelOne, Bajaj Finserv, Fisdom, Aditya Birla Capital, and Anandrathi. With NSDL, you can open a demat account with ICICI Bank, Axis Securities, Eureka, and Religare.

Know About DP ID

Once you sign up for a demat account on NSDL or the CDSL website and complete the application process, you will receive a DP ID. This includes a series of digits, which is coded to your account. The first eight digits identify your DP, assigned by the depository. The remaining are unique to the beneficiary or the account holder. Your DP ID is similar to bank codes such as IFSC and MICR, which identify your bank and individual account. 

If CDSL is your depository, the 16 digits constitute your DP ID. In case you hold an NSDL demat account, the first two digits – IN — are codes, while the rest 14 make up your DP ID.

Depository Participant Charge

In collaboration with DPs, these depositories provide investors with services such as processing corporate actions, pledging and unpledged shares, and more. Both the depository and DP will levy a small fee for these services — which may not be mentioned in your contract. These are charged upon the sale of transactions in your demat account, regardless of the quantity sold.

This charge is levied on a per day per share basis. Assuming you hold a CDSL demat account with Zerodha, CDSL and Zerodha will impose DP charges. For example, if your stockbroker charges ₹10 on the sale of 100 shares, they will charge the same amount even on the sale of 1,000 shares.

Why are DP Charges Levied?

If DP charges aren’t mentioned in your contract, why are they levied at all?

Any bank or financial institution must function as a DP to connect investors with depositories. As a result, they must pay a membership fee to NSDL or CDSL, whichever their associated depository may be. Other charges, such as advanced prepaid costs, are also paid to depositories.

To become a DP, a financial institution or the stockbroker must pay a fee to SEBI (Securities and Exchange Board of India). The entity or individual must also pay other fees, such as an application fee, a training fee, software annual maintenance charges, connectivity charges, and insurance premiums. The DP charges accrued from investors help them recover the money to obtain the licence from SEBI, NSDL, and CDSL.

Therefore, brokers offset the expenses by levying a small fee to account holders. Can you avoid paying DP charges? One way you exempt yourself is by closing your intraday position and participating in BTST (Buy Today, Sell Tomorrow) trading. However, paying the DP charges is non-negotiable if you’re taking delivery of securities in your demat account.

How Much Do DP Charges Cost?

DP charges can vary depending on your depository and are the same for all sell transaction charges.

CDSL, which is the larger of the two depositories, charges ₹13.50+ GST (18%) per day per script on stocks sold from your holdings. Meanwhile, NSDL levies DP charges of ₹13+ GST (18%). The charges levied by DPs vary from one broker to another.


Opening a demat account is the first step to investing in stock markets — and ensuring that your wealth rewards you in the long run. While using demat accounts can initially seem daunting, knowing the basics of DP ID, DP charges, and choosing the best DP can help. Both CDSL and NSDL offer similar services to a demat account holder but vary in terms of their promoters. Depending on factors such as the choice of DP, you can choose a depository and start your financial planning today.

DP Depository Participant