Hidden DP Charges?
I am a new investor and used to trade according to the brokerage calculator provided by Zerodha. I was making a profit but my account value had decreased after a month. It was then when I opened my backoffice ledger, I found out about “DP Charges”. Is it fair to hide such charges from investors ?
DP charges are a standard charge, like the way brokerage firm and exchanges earn when you trade on them, similarly depositories (NSDL,CDSL, where your stocks are held) and DP’s (businesses that provide demat accounts) earn when there are transactions on them. Transactions for demat is when shares are credited or debited to your demat (very similar to your bank account).
Similar to how when you receive funds into a bank you are not charged, but charged only to do a transfer out (IMPS/RTGS/NEFT), for demat as well DP charges are applicable when you transfer out. What Zerodha charges is among the lowest in the industry, most traditional brokers charge 0.03% or Rs 25 whichever is higher. Apart from charging 0 brokerage on investing and most out there charge atleast 0.3%. Out of the Rs 13.5 charged, Rs 5.5 goes to CDSL, the rest is what Zerodha charges.
Is it a hidden charge? No it isn’t, you would have signed a sheet on your demat form, with these charges mentioned. The brokerage calculator page has a link to list of charges which clearly mentions this.
It can’t be shown on the brokerage calculator because of the way it is designed. DP charges are charged only once a day irrespective of how many trades you do on the particular stock. Showing this on the brokerage calculator could mislead, because most people typically end up doing multiple smaller trades when executing a particular stock.
about six month ago, we can check DP charges during P/L statement. But not now. why?