The five ways to pay for EC2 — On-Demand, Spot, Reserved Instances, Dedicated, and Savings Plans — with deep dives into RI classes, attributes, scopes, limits, and the RI Marketplace.

The Five Pricing Models (summary)

ModelSavingsBest for
On-DemandBaseline (pay as you go)Short-term, spiky, unpredictable workloads; first-time apps; least commitment 7:42:04
SpotUp to 90% (greatest savings)Interruptible, non-critical background jobs; scientific computing 7:42:28
ReservedUp to 75%Steady-state/predictable usage; 1 or 3-year commitment; best long-term savings; resellable 7:43:18
DedicatedMost expensiveGuaranteed isolated hardware for enterprise requirements; technically not a pricing model — combines with On-Demand/Reserved/Spot 7:43:18
Savings PlansUp to 72%RI-like savings with a simplified purchase process 7:59:09

On-Demand

  • Default pricing when you launch an instance; no upfront payment, no long-term commitment; charged per second with a 60-second minimum, or per hour 7:44:17
  • Per-second billing applies to Linux, Windows, and Windows-with-SQL instances without a separate hourly charge; everything else bills per hour 7:44:17
  • Pricing pages always show the hourly rate even when per-second billing applies; the bill shows seconds 7:44:50
  • Experiment on on-demand with new apps; once the yearly workload is known, move to reserved 7:45:18

Reserved Instances (RIs)

Designed for steady-state, predictable usage or reserved capacity; savings formula = term × class offering × payment option (+ RI attributes) 7:45:50, 7:46:18

  • Term — 1-year or 3-year; longer term = greater savings; RIs do not auto-renew — at expiry instances revert to on-demand with no service interruption 7:46:41
  • Class offering — less flexible = greater savings:
    • Standard: up to 75% off on-demand; can modify some RI attributes 7:47:07
    • Convertible: up to 54% off; can exchange for RIs of equal or greater value 7:47:25
    • Scheduled: retired — no longer offered 7:47:25
  • Payment options — greater upfront = greater savings: All Upfront, Partial Upfront, No Upfront (discounted hourly rate billed every hour of the term whether used or not) 7:47:48
  • RIs can be shared between accounts in an organization; unused RIs can be sold on the RI Marketplace 7:48:14

RI Attributes

Four attributes (limited by class offering) affecting final price 7:49:01:

  1. Instance type (family + size, e.g., m4.large)
  2. Region where purchased 7:49:25
  3. Tenancy — shared (default/multi-tenant) or dedicated (single-tenant)
  4. Platform — Windows or Linux

Regional vs Zonal RIs

Scope choice does not affect price, only flexibility 7:49:57:

Regional RIZonal RI
Reserves capacityNo — no guarantee servers are availableYes — guaranteed 7:50:23
AZ flexibilityAny AZ in the regionOnly that AZ 7:50:23
Instance size flexibilityDiscount applies to any size in the familyNone — exactly what you defined 7:50:52
Queue purchasesYesNo 7:50:52

RI Limits

  • Per month you can buy 20 regional RIs per region and 20 zonal RIs per AZ (a region with 3 AZs → 60 zonal RIs) 7:51:12
  • Regional RIs cannot exceed your running on-demand instance limit (default 20) — raise the on-demand limit first if needed 7:51:42
  • Zonal RIs can exceed the on-demand limit: 20 on-demand + 20 zonal RIs lets you launch 20 more matching instances 7:51:42

Capacity Reservation

  • AZs have finite hardware per instance type/family; if demand exhausts it, you can't launch 7:52:12
  • Capacity Reservations reserve an instance type in a specific region/AZ; charged at the on-demand rate whether an instance runs in it or not; combine with regional RIs for billing discounts 7:53:13

Standard vs Convertible RI

  • Standard: modify attributes — change AZ within region, scope (zonal↔regional), instance size (Linux, default tenancy only), network (EC2-Classic↔VPC); cannot exchange; can be bought/sold on the RI Marketplace 7:53:36
  • Convertible: no modification — you exchange during the term for another convertible RI with new attributes (family, type, platform, scope, tenancy); cannot be sold/bought on the marketplace 7:54:00

Reserved Instance Marketplace

  • Sell unused standard RIs to recoup spend; RIs must have been active ≥ 30 days and AWS must have received the upfront payment; a US bank account is required; ≥ 1 month must remain on the term 7:54:43
  • You keep pricing/capacity benefits until sold; company name/address shared with buyer for tax purposes; seller sets only the upfront price (usage price and config stay fixed); term rounds down to the nearest month (9 months 15 days → listed as 9 months) 7:55:06
  • Sale limit: $20,000 USD per year; GovCloud RIs cannot be sold 7:55:31

Spot Instances

  • AWS sells unused capacity to maximize idle-server utility (like hotels/airlines discounting vacant rooms/seats); up to 90% off on-demand 7:55:59
  • Instances can be terminated when capacity is needed by on-demand customers (though reportedly rare); for flexible start/end times or workloads only feasible at very low compute cost 7:55:59, 7:56:27
  • AWS Batch is a simpler service for batch processing commonly used with spot 7:56:27
  • Billing on termination: if AWS terminates your instance you are not charged for the partial hour; if you terminate it, you're charged for the hour it ran 7:56:27

Dedicated Instances / Hosts

  • Dedicated instances help meet regulatory requirements; dedicated hosts serve strict server-bound licensing that won't support multi-tenancy 7:57:18
  • Multi-tenancy = everyone in the same apartment (customers separated by virtual isolation on shared hardware); single-tenancy = everyone owns their house (physical separation) 7:57:18, 7:57:49
  • Dedicated can be combined with on-demand, reserved, and even spot pricing; chosen via the tenancy dropdown at launch (shared / dedicated instance / dedicated host) 7:58:13, 7:58:42

AWS Savings Plans

  • Like RIs but with a simplified purchase: pick a plan type, a 1- or 3-year term, a payment option (all/partial/no upfront), and an hourly commitment — no standard-vs-convertible or regional-vs-zonal decisions 7:59:09, 7:59:30
  • Three types 7:59:55:
    • Compute Savings Plan — most flexible, up to 66% off; applies to EC2, Fargate, and Lambda regardless of family, size, AZ, region, OS, tenancy
    • EC2 Instance Savings Plan — lowest prices, up to 72% off; commit to an instance family in a region (flexible across sizes/OS/tenancy within it)
    • SageMaker Savings Plan — up to 64% off SageMaker (AWS's ML service) usage 8:00:28