Demat account charges explained: AMC, DP and brokerage
Opening a demat account comes with three main costs. You pay a yearly fee to keep it open, a flat fee when you sell shares, and brokerage for every trade. Under current SEBI rules, you can legally avoid the yearly maintenance fee if your total portfolio stays below ₹4 lakh.
By Qrates research desk · 2026-10-27
Every demat account has three main costs: a yearly fee to keep it open, a flat fee when you sell shares, and a fee for each trade you make. You also pay mandatory government taxes on every transaction. Under current rules, you can legally avoid the yearly maintenance fee if you hold a small portfolio.
Quick answer: Demat account charges explained
Opening a demat account comes with a mix of broker fees and government taxes. You will face three main charges from your broker.
- An annual fee to keep the account open.
- A flat fee every time you sell shares from your holdings.
- A fee to execute your buy and sell orders on the stock exchange.
These are called the Account Maintenance Charge (AMC), Depository Participant (DP) charges, and brokerage. You also pay mandatory government taxes like Securities Transaction Tax (STT), stamp duty, and GST on your trades (NSE, 2026).
You do not always have to pay the yearly fee. Under SEBI rules, you do not have to pay an AMC if you hold less than ₹4 lakh in shares (SEBI circulars, 2024).
The three main fees in plain words
Brokers deduct fees at different stages of your investing journey. Here is exactly what each charge means.
Account Maintenance Charge (AMC)
AMC is a fixed yearly fee charged by your broker just to keep the account active. You have to pay this fee regardless of whether you trade or not. Brokers usually deduct this amount directly from your linked trading ledger. If your ledger does not have enough cash, your account balance goes into the negative.
Depository Participant (DP) charges
DP charges are flat fees deducted only when you sell shares from your holdings. The central depositories in India are CDSL and NSDL (CDSL and NSDL tariff documents). They hold your shares in digital form. When you sell, the depository charges a fee to move the shares out of your account. Your broker adds their own cut to this fee. You do not pay DP charges for intraday trades, because the shares never actually enter or leave your demat account.
Brokerage charges
Brokerage is the fee your broker takes to place your buy or sell order on the stock exchange. This fee differs heavily between a discount broker and a full service broker. Discount brokers usually charge a flat fee per order, like ₹20. Full service brokers often charge a percentage of your total trade value. The fees also change based on delivery vs intraday charges. Delivery trades (buying and holding shares) often have different brokerage rates than intraday trades (buying and selling on the same day). Before choosing a provider, it is helpful to compare money apps side by side to see which fee structure suits your trading style.
How it works: A worked ₹50,000 example
Imagine you buy ₹50,000 worth of shares in a single company and sell them a month later. The fees apply differently on the buy and sell legs of your trade.
| Action | Broker fees applied | Government taxes applied |
|---|---|---|
| Buying shares | Brokerage fee for delivery | STT, stamp duty, exchange transaction charges, and 18% GST on the brokerage |
| Selling shares | Brokerage fee for delivery, plus the flat DP charge | STT, exchange transaction charges, and 18% GST on the brokerage |
When you buy, you pay the brokerage fee, plus STT, stamp duty, and 18% GST on the brokerage (Razorpay, 2026). The shares then sit in your demat account.
When you sell, you pay brokerage and taxes again. You also pay the flat DP charge. This DP charge depends on how your specific broker bills you. Some brokers charge this fee per transaction. If you sell shares of the same company in three separate batches on the same day, a per-transaction broker will charge you the DP fee three times. Other brokers charge this fee once per company per day, regardless of how many batches you sell.
What to check in your own case: The SEBI BSDA rule
SEBI guidelines mandate a Basic Services Demat Account (BSDA) for small investors to limit maintenance charges (SEBI circulars, 2024). This rule protects beginners from paying high yearly fees on small portfolios.
- If the total value of shares in your demat account is under ₹4 lakh, your AMC is legally zero.
- If your holdings sit between ₹4 lakh and ₹10 lakh, the AMC is capped at ₹100.
- If the holding value exceeds ₹10 lakh, standard AMC applies.
Brokers check the value of your demat account holdings daily to determine if you cross the BSDA threshold (Taxmann, 2026). If your portfolio grows past ₹4 lakh on any given day, the broker can start charging the standard fees.
Before opening an account, you can search the broker on the Qrates broking directory to see their exact demat account opening fees, AMC, and DP charges side by side. It is also wise to check if a stock broker is SEBI registered to ensure your capital is safe.
Common mistakes and hidden charges in demat accounts
First-time investors often look only at the headline brokerage rate and miss the other costs of trading.
The zero brokerage demat account truth
Many brokers advertise zero brokerage on delivery trades. A zero brokerage demat account often makes up for lost revenue by charging higher DP fees, high account opening fees, or steep AMC. Brokerage might be zero, but regulatory fees are never zero. You will always pay STT, exchange transaction charges, and 18% GST on the services you use. You can read about Angel One vs Groww vs Investing.com to understand how different platforms structure these costs.
Auto pledge charges and penalties
If you use your shares to get margin for trading, brokers apply auto pledge charges. This is a flat fee charged per pledge request. You also pay a fee when you unpledge the shares.
Another common trap involves the yearly AMC. Failing to maintain a minimum cash balance for the yearly AMC deduction can lead to penalty fees. If your account balance stays negative for too long, the broker can freeze your account until you clear the dues.
FAQs
What are DP charges in demat account?
It is a flat fee charged by the depository and your broker every time shares leave your demat account. You only pay this when you sell shares from your holdings, not when you buy them.
Why DP charge is deducted when I sell shares?
The fee covers the cost of electronically moving the shares from your account to the buyer. The central depositories (CDSL or NSDL) and your broker split this fee for processing the transfer.
Difference between brokerage and DP charges?
Brokerage is the fee for executing your trade on the stock exchange. The DP charge is the fee for moving the actual digital shares out of your demat account after a sale.
How to avoid AMC charges in demat account?
Keep your total holding value below ₹4 lakh to qualify for a zero-AMC Basic Services Demat Account (BSDA). Alternatively, you can choose a broker that offers a lifetime zero AMC plan, though they may charge higher fees elsewhere.
Demat account me hidden charges kya hote hai?
Common hidden costs include DP charges on selling, pledge fees for margin trading, and 18% GST on all broker fees. Account opening fees and penalties for a negative ledger balance also catch many new investors off guard.
The short version
- Every demat account has an Account Maintenance Charge (AMC), Depository Participant (DP) charges, and brokerage fees.
- Under SEBI rules, your AMC is zero if your total holdings stay below ₹4 lakh.
- DP charges are flat fees deducted only when you sell shares from your holdings.
- You do not pay DP charges for intraday trades.
- You always have to pay mandatory government taxes like STT, stamp duty, and 18% GST on your trades.
Sources
- Online Stock Market Trading and Investment in India with HDFC securities
- Zerodha brokerage charges, fees & taxes on trading and investing
- A Simple Guide to GST on Brokerage and Commission
- Taxmann (taxmann.com)
- What is pledging & how to pledge for margin?
- BSDA Demat Account Eligibility and Charges in India
- What Are DP Charges in Share Market?
- What is Depository Partcipant charges? Understand with examples
Disclaimer
Qrates is an information directory. It takes no commission from any company listed and does not recommend products. Figures are taken from the sources named and dated, and they change; check the company's own page before you decide. This is not investment, credit, insurance or tax advice for your situation.