DP Charges Explained: Why Groww, Zerodha Users Must Understand Hidden Trading Costs

Many investors compare brokerage fees before choosing a trading platform, but another important cost often goes unnoticed — Depository Participant (DP) charges. Whether you use Groww, Zerodha, or similar platforms, understanding these fees can help you avoid unexpected deductions and make more informed trading decisions.

DP charges apply when shares are sold from a demat account. During a sale transaction, the shares are debited from the investor’s demat account and transferred to the clearing corporation to complete settlement. This debit process is handled by the broker’s Depository Participant, and a fee is charged for facilitating the transfer.

What are DP charges and why are they applied?

DP charges are not the same as brokerage fees. Brokerage is charged for executing the trade, while DP charges apply specifically to the transfer of securities from your demat account when you sell shares.

Every time shares are delivered from your demat account for settlement, the depository levies a fee, and brokers add a small facilitation charge on top. This ensures secure transfer, record maintenance, and settlement compliance.

How much do investors typically pay?

Charges vary across brokers. A common structure includes a flat fee per transaction plus GST. For example, some brokers charge around ₹13–₹15 per transaction, including the depository fee component.

However, not all brokers follow a flat-fee model. Some levy DP charges as a percentage of the sell value. Even a seemingly small rate like 0.04% can significantly increase costs — a ₹10 lakh sale could attract a ₹400 DP charge.

This means investors focusing only on low brokerage may end up paying more overall if DP charges are higher.

Frequency of DP charges can impact active traders

Another important difference lies in how often DP charges are applied. Some brokers levy the fee every time a sell order is executed, even if the same stock is sold multiple times in one day.

Other brokers charge DP fees only once per stock per day, regardless of how many sell transactions occur. This distinction can significantly affect frequent traders and intraday sellers who execute multiple trades.

Why many investors overlook DP charges

DP charges are often small relative to the total transaction value and may not appear as prominently as brokerage fees. Because of this, many investors fail to notice them.

Over time, especially for frequent traders or those selling large holdings, these charges can accumulate and reduce overall returns.

The role of brokers and depositories

DP charges exist because brokers and depositories are responsible for ensuring secure settlement of trades. This process includes debiting shares from demat accounts, delivering them to the clearing corporation, and maintaining accurate records.

Without this infrastructure, seamless stock market transactions would not be possible.

What investors should keep in mind

To avoid surprises, investors should review the full fee structure of their broker, including DP charges, frequency rules, and calculation methods. Even small differences can have a noticeable impact over time, particularly for high-value or frequent transactions.

Understanding these hidden costs enables investors to choose the right trading platform and optimise their investment returns.