We study the penetration dynamics of a projectile incident normally on a substrate comprising of smaller granular particles in three-dimensions using the discrete element method. Scaling of the penetration depth is consistent with experimental observations for small velocity impacts. Our studies are consistent with the observation that the normal or drag force experienced by the penetrating grain obeys the generalized Poncelet law, which has been extensively invoked in understanding the drag force in the recent experimental data. We find that the normal force experienced by the projectile consists of position and kinetic-energy-dependent pieces. Three different penetration regimes are identified in our studies for low-impact velocities. The first two regimes are observed immediately after the impact and in the early penetration stage, respectively, during which the drag force is seen to depend on the kinetic energy. The depth dependence of the drag force becomes significant in the third regime when the projectile is moving slowly and is partially immersed in the substrate. These regimes relate to the different configurations of the bed: the initial loose surface packed state, fluidized bed below the region of impact, and the state after the crater formation commences. © 2014 American Physical Society.