AWS Savings Plans offer discounts on compute usage, in exchange for a commitment to a consistent amount of usage (measured in dollars per hour) over a one- or three-year term.
Rather than tying the commitment to specific instance types or regions, Savings Plans apply automatically to eligible AWS compute resources. This structure allows organizations to reduce costs across services like Amazon EC2, AWS Fargate, and AWS Lambda without having to make rigid, upfront instance specifications.
Savings Plans are suited for organizations that prioritize cost savings but still need the ability to adapt to changing compute requirements. The pricing model automatically applies the applicable discount to any usage matching the plan's scope, with standard on-demand rates being charged for any usage beyond the committed amount.
The flexibility of Savings Plans makes them attractive for dynamic workloads where usage may fluctuate, as users can shift resources within families, sizes, and locations without losing the benefit of discounted pricing.
AWS Reserved Instances (RIs) are a cost-saving model for Amazon EC2 where customers commit to using a specific instance type, size, and region for a one- or three-year period. This commitment grants significant discounts compared to on-demand pricing.
RIs lock customers into specific resource parameters, ensuring they receive the discount only when those exact parameters are met during usage. Their rigid structure means customers must plan their cloud infrastructure needs with accuracy, as changes to instance types, regions, or operating systems usually aren’t permitted unless using Convertible RIs.
RIs are ideal for steady-state workloads where future compute requirements can be forecasted with confidence.
This is part of a series of articles about AWS cost management
Compute Savings Plans provide the most flexibility of the Savings Plans options. With Compute Savings Plans, users commit to a certain amount of compute spend per hour but aren’t restricted to specific instance families, sizes, operating systems, or regions. This means workloads can move between different EC2 instance families, across different AWS regions, and even to other eligible compute services like AWS Fargate or Lambda, all while maintaining the committed discount.
This broad applicability makes Compute Savings Plans ideal for organizations that regularly shift workloads or develop and deploy new compute resources in response to changing demand. The automatic application of discounts across services and regions removes many of the long-term planning challenges faced with traditional reserved pricing. However, discount rates are lower than other plans due to this added flexibility.
|
Term |
Payment Option |
Discount Range Compared to On-Demand |
|
1 Year |
All Upfront |
29% to 49% |
|
1 Year |
Partial Upfront |
27% to 47% |
|
1 Year |
No Upfront |
26% to 46% |
|
3 Years |
All Upfront |
42% to 66% |
|
3 Years |
Partial Upfront |
40% to 64% |
|
3 Years |
No Upfront |
38% to 62% |
Discounts vary depending on instance type, region, and utilization patterns.
EC2 Instance Savings Plans offer lower rates compared to Compute Savings Plans but require more specific commitments. When purchasing this Savings Plan, users must commit to a particular EC2 instance family in a chosen region, though they can vary instance size, operating system, and tenancy within that family. This model applies discounts only to usage matching these commitments.
These plans suit organizations with stable workloads running on a specific EC2 instance family. While less flexible than Compute Savings Plans, the discounts are generally higher due to the additional restrictions.
|
Term |
Payment Option |
Discount Range Compared to On-Demand |
|
1 Year |
All Upfront |
31% to 52% |
|
1 Year |
Partial Upfront |
30% to 50% |
|
1 Year |
No Upfront |
28% to 48% |
|
3 Years |
All Upfront |
48% to 72% |
|
3 Years |
Partial Upfront |
46% to 70% |
|
3 Years |
No Upfront |
44% to 68% |
Discounts are higher due to restrictions on instance family and region.
SageMaker Savings Plans focus exclusively on AWS SageMaker, the company’s managed machine learning service. Customers commit to a stated dollar-per-hour spend on SageMaker usage, covering various SageMaker features like training jobs, real-time inferencing, batch transform jobs, and processing.
The discounts automatically apply to any eligible SageMaker usage, regardless of instance family or region within SageMaker.
|
Term |
Payment Option |
Discount Range Compared to On-Demand |
|
1 Year |
All Upfront |
24% to 30% |
|
1 Year |
Partial Upfront |
22% to 28% |
|
1 Year |
No Upfront |
20% to 26% |
|
3 Years |
All Upfront |
34% to 64% |
|
3 Years |
Partial Upfront |
32% to 62% |
|
3 Years |
No Upfront |
30% to 60% |
Coverage includes SageMaker training, inference, and processing features.
Standard Reserved Instances provide the deepest discounts among Reserved Instance types—up to 72% compared to on-demand pricing—for customers willing to commit to a specific EC2 instance type, size, platform, and region.
This type of RI is strictly non-flexible, so any changes to instance attributes typically mean the discount no longer applies, requiring users to plan their capacity needs with accuracy.
The main benefit is cost efficiency for static workloads, but the drawback is the lack of flexibility. If usage patterns change, organizations may find themselves unable to adjust without incurring additional costs outside their RI allocation.
Convertible Reserved Instances offer more flexibility than Standard RIs. They allow customers to exchange their RI for another of equal or greater value, as long as the new reservations are for EC2 instances. This feature makes Convertible RIs better suited for workloads where future needs might be uncertain or subject to change. Discount rates for Convertible RIs are lower than those of Standard RIs but remain significant over on-demand prices.
Convertible RIs are valuable for cloud strategies that anticipate change but still need discounted, predictable billing. Teams can adapt instance families, operating systems, or tenancy during the term of their RI without losing reservation benefits.
|
Term |
Payment Option |
Discount Range Compared to On-Demand |
|
1 Year |
All Upfront |
27% to 41% |
|
1 Year |
Partial Upfront |
25% to 39% |
|
1 Year |
No Upfront |
23% to 37% |
|
3 Years |
All Upfront |
45% to 54% |
|
3 Years |
Partial Upfront |
43% to 52% |
|
3 Years |
No Upfront |
41% to 50% |
Both AWS Savings Plans and Reserved Instances are designed to reduce costs for long-term cloud compute usage by requiring a commitment from customers. They offer discounts compared to on-demand pricing.
In both models, customers commit to usage over a one- or three-year term. This commitment enables AWS to offer lower prices, since it aligns infrastructure provisioning with customer demand. Whether through a dollar-per-hour commitment (Savings Plans) or instance-specific reservations (RIs), the billing structure rewards long-term planning.
Additionally, both Savings Plans and RIs are applied automatically to eligible usage. AWS handles the application of these discounts behind the scenes, reducing administrative overhead and ensuring optimal utilization of committed resources.
Different discount models offer different levels of saving:
Each model's savings potential correlates with how restrictive its usage parameters are. The more rigid the commitment—such as locking in a specific instance type and region—the higher the discount.
Only Standard RIs support capacity reservations, and only when purchased with a zonal scope. This allows users to reserve instance capacity within a specific Availability Zone, which is critical for applications that need guaranteed availability during high-demand periods.
Savings Plans, including Compute and EC2 Instance options, do not provide reserved capacity. Instead, they apply discounts to usage but do not ensure availability of underlying infrastructure.
Users seeking both cost savings and guaranteed instance availability may pair on-demand capacity reservations with Savings Plans or Regional RIs to combine reservation assurance with discount benefits.
Compute Savings Plans provide the greatest flexibility, applying discounts to usage across EC2, AWS Lambda, and AWS Fargate, with no restrictions on instance family, size, region, OS, or tenancy.
EC2 Instance Savings Plans are more limited, focusing on a single EC2 instance family within a region but still offering variation across size, OS, and tenancy.
Reserved Instances are more restrictive. Standard RIs require exact matches on instance type, size, platform, and region. Convertible RIs allow some flexibility by supporting instance exchanges during the term, but only within EC2 and under specific value-matching conditions.
With Savings Plans, increasing your committed usage isn't dynamic. If your compute needs grow, you must purchase a new full-term commitment, as the original Savings Plan can't be modified or expanded mid-term.
Standard RIs follow a similar constraint—you must buy additional RIs if you want to cover more usage, though partial-term RIs can be bought via the Reserved Instance Marketplace.
Convertible RIs offer more flexibility: they allow users to increase their commitment via an exchange without starting a new term.
Standard RIs can be sold on the AWS Reserved Instance Marketplace, which enables users to recoup unused capacity. AWS charges a 12% service fee for the sale of RIs with an upfront payment component, though this fee is waived for No Upfront RIs.
Convertible RIs cannot be sold but can be exchanged for different configurations of equal or greater value. This allows users to adjust their instance coverage as needs change.
Savings Plans are non-transferable and immutable after the initial 7-day return window. They cannot be sold or exchanged.
Choosing between AWS Savings Plans and Reserved Instances depends on your organization’s workload predictability, flexibility needs, and commitment strategy:
Use Savings Plans when flexibility and service coverage are priorities, and opt for Reserved Instances when deep discounts for consistent, static usage are the goal. Organizations with mixed workloads may even benefit from a blended strategy—combining Savings Plans for variable compute and Reserved Instances for predictable baselines.
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