Zerodha's Nithin Kamath Discusses Impact of Deposity Participant Fees on Stock Market Investors

Zerodha CEO Warns Investors About DP Charges

Key Takeaways

• Zerodha, an online brokerage firm, has shed light on the depository participant (DP) charges imposed on stock market investors when they sell their holdings.
• DP charges are fees levied by depository participants (DPS), which are SEBI-registered entities like banks and financial institutions that serve as intermediaries between the depository and investors in India.

Understanding DP Charges

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DP charges are incurred when an investor sells their holdings, as the depository participant clears the settlement of the trades, debiting shares from the demat account and delivering them to a clearing corporation. DP charges can be a flat fee or a percentage of the selling value of the holdings.

DP Charges at Zerodha

At Zerodha, the DP charge is ₹3.5 (in addition to a ₹10 GST charge), totaling ₹13.5 per transaction. This fee is charged once per stock per day, regardless of the number of transactions made.

What Investors Should Watch Out For

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Investors should be aware of brokerage firms that charge DP fees on every selling transaction. This can result in additional costs, as seen in the example of a stock being sold four times in one day, incurring four separate DP fees.