Savings Plans vs Reserved Instances: choosing and sizing a commitment

AWS gives a lower price on EC2 in exchange for a one- or three-year commitment. There are three main ways to make it: Compute Savings Plans, EC2 Instance Savings Plans and Reserved Instances. They trade discount for flexibility. All of them bill for the full term whether or not you use them, so the hard part isn't choosing the type. It's choosing how much to commit.

The options, as AWS describes them

Option	Discount (AWS's figure)	What you commit to	Where the discount applies
Compute Savings Plans	up to 66%	A dollar amount per hour	EC2 in any instance family, size, Availability Zone, Region, OS or tenancy, plus Fargate and Lambda
EC2 Instance Savings Plans	up to 72%	A dollar amount per hour, for one instance family in one Region (for example m5 in N. Virginia)	Any size, OS or tenancy within that family and Region
Standard Reserved Instances	up to 72%	An instance type, platform, tenancy and Region (optionally an Availability Zone)	Matching usage. A regional RI can apply across sizes in its family. You can modify the Availability Zone, instance size (Linux) and networking type
Convertible Reserved Instances	up to 66%	The same attributes as a Standard RI	Matching usage. You can exchange them for other Convertible RIs of equal or greater value, changing family, OS and tenancy

The "up to" figures are best cases. AWS also lists average discounts for Reserved Instances: Standard RIs average 40% off On-Demand for 1 year and 60% for 3 years, Convertible RIs 31% and 54%.

Terms are 1 or 3 years for all four. Each has three payment options: No Upfront (billed monthly), Partial Upfront (for Savings Plans, at least half the commitment upfront and the rest monthly) and All Upfront. Paying more upfront gets a lower rate.

Two other kinds of Savings Plan cover other services: Database Savings Plans (up to 35%, 1-year term, no upfront payment; see the RDS guide) and SageMaker Savings Plans (up to 64%). Compute Savings Plans don't cover RDS.

What that means for one instance

An m5.large running Linux in US East (N. Virginia), from AWS's price lists:

Option	1-year, No Upfront	Off On-Demand	3-year, No Upfront	Off On-Demand
On-Demand	$0.096 / hr ($70.08 / month)
Compute Savings Plan	$0.071 / hr ($51.83)	26%	$0.049 / hr ($35.77)	49%
EC2 Instance Savings Plan (m5)	$0.060 / hr ($43.80)	38%	$0.041 / hr ($29.93)	57%
Standard Reserved Instance	$0.060 / hr ($43.80)	38%	$0.041 / hr ($29.93)	57%
Convertible Reserved Instance	$0.071 / hr ($51.83)	26%	$0.049 / hr ($35.77)	49%

For this instance, an EC2 Instance Savings Plan costs the same as a Standard RI, and a Compute Savings Plan the same as a Convertible RI. Paying everything upfront for 3 years lowers it further: an m5 EC2 Instance Savings Plan is $0.036 an hour, and a 3-year All Upfront Standard RI is $949, which works out to about $0.036 an hour. Rates differ for every instance type, OS and Region, so check your own in the console before comparing.

Monthly figures use AWS's 730-hour month.

What actually differs

What happens when your fleet changes. A Compute Savings Plan keeps applying if you move from m5 to a newer or Graviton family, change Region, or move work to Fargate or Lambda. An EC2 Instance Savings Plan or Standard RI stops applying when you leave the family or Region. A Convertible RI can follow you, but only if you exchange it yourself.
Capacity. Savings Plans don't reserve capacity. A Reserved Instance bought for a specific Availability Zone does. You can also reserve capacity with On-Demand Capacity Reservations, and Savings Plans apply to those.
Changing your mind. A Savings Plan can't be cancelled and its terms can't be changed after purchase. You can return one only if its commitment is $100 an hour or less, you bought it in the last seven days, and it's still the same calendar month. Standard RIs can be listed for sale on the Reserved Instance Marketplace, subject to its requirements.
Which discount applies first. Reserved Instances apply first, then EC2 Instance Savings Plans, then Compute Savings Plans. Within a Savings Plan, AWS applies the commitment to the usage with the highest discount percentage first.

AWS's own advice for EC2 is to move from RIs to Savings Plans as the RIs expire, because Savings Plans "offer the same savings as RIs, but with additional flexibility."

Sizing a commitment from Cost Explorer's recommendations

AWS calculates recommendations from your own usage: it works out what your bill would have been over a past period with an extra commitment, and recommends the amount that would have saved the most. It doesn't forecast. If your usage is about to change, the recommendation doesn't know. A method that keeps that in view:

Clean up first. Remove idle instances and downsize oversized ones before you commit, then let usage settle. A recommendation based on usage you're about to remove commits you to paying for it.
Open the recommendation. Billing and Cost Management → Savings Plans → Recommendations. Choose the plan type, term, payment option and lookback period (7, 30 or 60 days), and refresh it so it reflects recent usage and the plans you already own. For RIs: Reservations → Recommendations.
Compare lookback periods. If the 7-day recommendation is much lower than the 60-day one, your usage is falling, and the longer period overstates what you'll use.
Read the commitment as a Savings Plans rate. The recommended hourly commitment is in Savings Plans prices, not On-Demand spend. At the m5.large rates above, a $0.71 an hour Compute Savings Plan covers 10 instances that cost $0.96 an hour On-Demand.
Look at the hourly range, not just the average. The recommendation details show your lowest, average and highest hourly On-Demand spend in the period, and the plan's estimated average utilization. A commitment that covers no more than your lowest hour is used in full every hour. One sized to your average is partly unused in quiet hours, such as nights and weekends.
Model the amount you're confident in. The Purchase Analyzer estimates cost, coverage and utilization for a commitment you choose, instead of AWS's recommended one.
Pick one plan type per recommendation. AWS builds the Compute and EC2 Instance Savings Plans recommendations from the same usage. They're not meant to be bought together.
Check after buying. Refresh the recommendation, since it now counts the new plan. The Savings Plans utilization and coverage reports in Cost Explorer show how much of the commitment is being used. You can add more plans later; you can't shrink one.

The same recommendation from the CLI (read-only; each Cost Explorer API request costs $0.01):

aws ce get-savings-plans-purchase-recommendation \
  --savings-plans-type COMPUTE_SP --term-in-years ONE_YEAR \
  --payment-option NO_UPFRONT --lookback-period-in-days SIXTY_DAYS \
  --query 'SavingsPlansPurchaseRecommendation.SavingsPlansPurchaseRecommendationDetails[].[HourlyCommitmentToPurchase,EstimatedAverageUtilization,CurrentMinimumHourlyOnDemandSpend,CurrentAverageHourlyOnDemandSpend,CurrentMaximumHourlyOnDemandSpend]' \
  --output table

Swap COMPUTE_SP for EC2_INSTANCE_SP, and SIXTY_DAYS for SEVEN_DAYS or THIRTY_DAYS, to compare. AWS only generates recommendations if you averaged at least $0.10 an hour of On-Demand spend in the lookback period.

The risk of over-committing

A commitment is billed every hour of the term, used or not, and each hour's commitment can't be carried over to the next. The arithmetic for the $0.71 an hour Compute Savings Plan above (1-year, No Upfront):

m5.large instances running	With the plan, per hour	On-Demand, per hour	Plan saves
10	$0.71	$0.96	$0.25
8	$0.71	$0.768	$0.058
7	$0.71	$0.672	−$0.038
5	$0.71	$0.48	−$0.23

Fully used, the plan saves $182.50 a month ($518.30 instead of $700.80). In any hour when less than 74% of the commitment is used, the plan costs more than having no plan at all. That break-even point is one minus the discount, so the smaller the discount, the less room you have. If half the fleet is retired three months in, the remaining nine months cost about $168 a month more than On-Demand would have, about $1,511 in total.

The same logic applies to Reserved Instances, with one more way to lose: a Standard RI or EC2 Instance Savings Plan also stops applying if you move to a different instance family or Region.

The free checkup finds this and 20 other kinds of issues automatically. It reads AWS's own Compute Savings Plan recommendation for your account (1-year, No Upfront, based on the last 30 days) and reports the recommended hourly commitment and AWS's estimated saving. If its EC2 findings would remove compute, it scales the saving down to match and tells you to re-check the recommendation after cleanup. It doesn't change the commitment amount itself. It also reads AWS's 1-year, No Upfront reserved instance recommendation for RDS. It doesn't read EC2 Instance Savings Plan or EC2 reserved instance recommendations or 3-year terms, and it doesn't check how well the Savings Plans and reservations you already own are used.

Run a free checkup

Sources

Discounts, terms, payment options, flexibility, returns and Database and SageMaker Savings Plans: Savings Plans FAQs, Compute Savings Plans and EC2 Instance Savings Plans pricing; Savings Plans types (terms can't be changed after purchase), Compute Savings Plans and Reserved Instances (comparison table; no capacity reservation; can't be cancelled), Returning a purchased Savings Plan (AWS documentation)
Reserved Instances (up to 72% Standard, up to 66% Convertible; average 40%/60% and 31%/54%; zonal capacity reservation; modifications, exchanges and the Marketplace): Amazon EC2 Reserved Instances
Order of application, highest discount first, no carry-over between hours: Understanding how Savings Plans apply to your usage
Recommendations (no forecasting; 7, 30 or 60 days; $0.10 an hour minimum; Compute and EC2 Instance recommendations not meant to be combined; commitment in Savings Plans rates; Purchase Analyzer): Understanding your recommendation calculations, Evaluating Savings Plans recommendations, Purchasing Savings Plans, Accessing reservation recommendations; API fields: GetSavingsPlansPurchaseRecommendation, SavingsPlansPurchaseRecommendationDetail
m5.large prices (us-east-1, Linux, shared tenancy): AWS Price List API, Amazon EC2 offer for us-east-1 (large JSON file), version published September 25, 2026: BoxUsage:m5.large On-Demand $0.096/hr; Standard RI No Upfront $0.060 (1-year) and $0.041 (3-year); Convertible RI No Upfront $0.071 and $0.049; 3-year All Upfront Standard RI $949. AWS Price List API, Savings Plans offer for us-east-1, version published October 3, 2026: Compute Savings Plans No Upfront $0.071 (1-year) and $0.049 (3-year); EC2 Instance Savings Plans (m5) No Upfront $0.060 and $0.041, 3-year All Upfront $0.036.
Cost Explorer API, $0.01 per request: AWS Cost Explorer pricing. 730 hours a month: AWS Pricing Calculator assumptions

Prices are AWS list prices for US East (N. Virginia), checked October 3, 2026. Other regions, operating systems and instance types differ. Percentages are rounded. Your bill may also reflect credits or private pricing.