Should I use Savings Plans or Reserved Instances for my EC2 instance?

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Savings Plans and Reserved Instances offer cost savings compared to On-Demand pricing. Typically, longer term commitment results in higher savings, such as a three-year term instead of a one-year term.

Savings Plans have more flexibility because you commit to a consistent amount of compute usage. Savings Plans automatically apply across instance families, AWS Regions, operating systems (OS), tenancies, and compute services such as Amazon EC2, AWS Fargate, and AWS Lambda. You can choose between Compute Savings Plans, EC2 Instance Savings Plans, and Amazon SageMaker AI Savings Plans.

With Reserved Instances, you commit to an instance configuration that's specific to an instance family, Region, Availability Zone, OS, and tenancy. You can purchase either Regional Reserved Instances or Zonal Reserved Instances. Regional Reserved Instances are more flexible as they provide billing discounts across all Availability Zones in a Region. Zonal Reserved Instances are associated to a specific Availability Zone, but provide reserved capacity. Only Zonal Reserved Instances offer reserved capacity that's required for critical workloads that need continual resource availability. If you purchased Reserved Instances that you don't use, then continue to incur charges. However, you can choose between Standard and Convertible Reserved Instances. For all Reserved Instances, you have the option to pay everything, something, or nothing up front.

To choose between Savings Plans and Reserved Instances, identify your workload flexibility needs. Use Savings Plans for workloads where you need the flexibility to change instance types, use multiple AWS compute services, or want automatic cost optimization. Use Reserved Instances for workloads that are stable and predictable, need capacity reservations in specific Availability Zones, or have specific instance configurations.

It's a best practice to mix strategies and use Reserved Instances for stable workloads and Savings Plans for variable ones. To optimize your purchase, use the Savings Plans and Reserved Instances Recommendations page in the AWS Cost Explorer. Cost Explorer uses your historical usage patterns to provide best practices on commitment levels and instance types.

If your workload requirements might change, then set up a short-term commitment of 1 year to assess your needs. Use AWS Budgets to track and manager your costs.

To purchase Reserved Instances, use the Amazon EC2 console to buy Standard or Convertible Reserved Instances.

To purchase Savings Plans, use the AWS Billing and Cost Management console. For more information about Savings Plans, see Purchasing Savings Plans.

Important: If you purchased a Savings Plan that expires soon, then it's a best practice to renew the Savings Plan before expiration to maintain coverage. If you purchased a Reserved Instance that expires soon, then you can schedule the Reserved Instance to renew automatically.

Related information

Amazon EC2 billing and purchasing options