InvestorQ : Is operating the DP account an expensive operation?
Nisha Chandani made post

Is operating the DP account an expensive operation?

Answer
user profile image
Mahima Roy answered.
2 years ago


You will be surprised to learn that there are a plethora of charges that the DP levies; most of which you may not even be aware of. So, your DP account is not free like the ad in the newspaper was screaming. When it says “Open free DP account”, then it only means that there is no account opening fee. The big costs in DP are annual maintenance charge (AMC) and the transaction fee each time your DP account gets debited. Some DPs ask for annual maintenance charges, others used to charge a fee for opening or closing the demat account. Similarly, while some charged fees for credit of shares in the account (that has been banned by SEBI now). Similarly, some DPs would bill you on the basis of the number of companies shares held while others would calculate on the basis of the value of the transaction.
There are also other charges like when you demat shares or send shares for demat you are charged on per certificate basis. Any rejected DIS or DRF also entails a cost. Then DP will say to pay for postage charges, courier charges etc. If you want to avoid huge costs of DP then shift to online Demat account. If your demat value is low, go for BSDA account. You can reduce your DP cost. It is quite a bit and you need to factor these costs when you are calculating effective profits or gains from your trading account.