Stocks are always attractive, and most beginners would love to start with their fair shares. While taking a quick plunge in here for shares, there are a few terms, which will pop up in your mind rather quickly. One such name will be the DP charges. For some new investors, it is going to be a miscellaneous charge which they never really thought much about.
But the results are pretty frivolous. DP mainly means depository participant and will focus on the depository charges. Always understand the reasons behind it to gain better knowledge. Going through this article might help you with a quick understanding.
Understanding DP Charge:
It is better to understand what depository means. It will signify a place where all your shares are likely to get deposited. Whatever platform you are making plans to purchase, there will be one singular digital space to store all stock investments for investors.
- Your Demat account will be in a secured position in the depository. So, the charges are levied by the depository and even the depository participant.
- Any brokerage can easily work through these main depositories. These entities will present operations through Demat accounts, and those are operated online.
- These accounts are pretty common, and most of the banks will offer such accounts with your present ones.
- The Demat accounts will help you to hold all shares in electronic format, and then you will be spared the need to hold any certificate to signify the shares that you hold under your name.
So, it is not hard to state that the firm stocks have gotten a whole lot easier with the help of these Demat accounts.
Who can levy these charges?
For example, you might have opened up a Demat account for trading in the shares. Well, stocks will be significant parts of NSDL or CDSL. It all depends if they actually belong to the Nifty or the Bombay Stock Exchange in a respective manner.
You might need to pay a certain charge to any one of the chosen depositories. Your Demat account will be managed completely through a mediating bank or broker. It is called DP or depository participant. Some of these charges are levied on behalf of these institutions.
A quick knowledge to cover:
Always remember that you might end up trading through share brokers online. So, you have to get a simple Demat account for that. But, always remember that these depositories are mostly operational under primary depositors only.
- It is quite evident of the situation over here, in case the brokerage shuts due to some unfortunate reasons.
- During such instances, the investors or account holders will access stock market-based instruments without ever worrying about that.
It will be a great assurance for the investors. For such relief results, the major depositories will levy some charges on every possible investor through the Demat account. That’s what calls for DP charges. For understanding more about the charges and to prepare yourself for the share market, make sure to get hold of the Options Trading Calculator now!