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What is a scrip? And why do we pay DP charges for them?

Discussion in 'Beginners Guide' started by teetotaller, Aug 13, 2017.

  1. teetotaller

    teetotaller New Member

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    I was looking at brokerage calculators, and found that all of them mention that DP charges are separately charged.
    Here, DP is "Depository Participant"

    What is a scrip? And when someone sells a stock, why does he have to pay for these "scrips". I did a google search, but am not able to understand how scrips, or documents acknowledging debt, come into play.
    It appears that brokerages are not a great issue, but DP charges seem to be high.

    Could someone please enlighten me? I know it's a noob question, but I'm sure we all start somewhere.
     
  2. Smart_trade

    Smart_trade Moderator

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    One has to pay two types of charges to DP .One is holding charge which is a charge for holding scrips ( scrips means shares,mutual funds held in our accounts) .This charge is annual charge.

    Second charges are transaction charges.When we sell a share, the share has to move from our Demat account to pool account of the broker and from there it goes to NSE or BSE. For this movement we have to pay transaction charges to DP.These charges are on per transaction basis.These are sources of revenue for DP .

    Smart_trade
     
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  3. teetotaller

    teetotaller New Member

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    So does one share mean one scrip?

    I found this on Zerodha's pricing page:
    "₹13.5 per scrip per day(irrespective of quantity) debited from demat account when stocks are sold. ₹5.5 per MF (irrespective of quantity) debited from demat on redemption. Charged by depository (CDSL) and depository participant (Zerodha)"

    Per scrip.... per day?
     
  4. 5paisa

    5paisa 5paisa

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    A Scrip denotes a stock's name in the Share Market. It is the symbol which a stock trades in the market.
    By definition, it is a certificate that can be exchanged for a fractional share of stock. Scrip is distributed as the result of a spinoff, a stock dividend, or a stock split in which the stockholder would be entitled to a fractional share of stock. For example, the owner of a single share would receive scrip for one-half a share in the event the issuer declared a three-for-two stock split.
     
    Last edited by a moderator: Oct 10, 2017
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