Reserved Instances vs Savings Plans: Complete Comparison Guide
AWS offers two primary ways to save money on compute costs: Reserved Instances (RIs) and Savings Plans. Both can deliver significant savings, but which is right for your organization? This comprehensive guide breaks down the differences, benefits, and best use cases for each option.
The Fundamentals
Reserved Instances (RIs)
Reserved Instances provide capacity reservations and billing discounts for specific instance types in specific Availability Zones. You commit to using a particular instance type for 1 or 3 years in exchange for significant discounts.
- Savings: Up to 75% compared to On-Demand pricing
- Commitment: Specific instance type, size, and AZ
- Flexibility: Limited - tied to specific configurations
- Capacity: Provides capacity reservation
Savings Plans
Savings Plans offer flexible pricing models that provide savings on compute usage. You commit to a consistent amount of usage (measured in $/hour) for 1 or 3 years.
- Savings: Up to 72% compared to On-Demand pricing
- Commitment: Dollar amount per hour, not specific instances
- Flexibility: High - covers different instance types and regions
- Capacity: No capacity reservation
📊 Quick Comparison
| Feature | Reserved Instances | Savings Plans |
|---|---|---|
| Max Savings | Up to 75% | Up to 72% |
| Flexibility | Low | High |
| Capacity Reservation | Yes | No |
| Best For | Stable workloads | Dynamic workloads |
Types of Savings Plans
Compute Savings Plans
The most flexible option, providing savings across:
- EC2 instances (any family, size, AZ, region, OS, or tenancy)
- AWS Fargate
- AWS Lambda
- Up to 66% savings on EC2
EC2 Instance Savings Plans
More restrictive but higher savings:
- Applies to specific instance family in a specific region
- Flexible across AZ, size, OS, and tenancy within that family
- Up to 72% savings on EC2
When to Choose Reserved Instances
RIs are ideal when you have:
- Stable, predictable workloads - Database servers, web servers with consistent traffic
- Specific capacity requirements - Need guaranteed capacity in specific AZs
- Homogeneous infrastructure - Standard instance types across your fleet
- Maximum savings priority - Willing to sacrifice flexibility for highest discounts
💡 RI Best Practice
Start with Standard RIs for your most stable workloads, then use Convertible RIs for workloads that might change. You can always convert Standard to Convertible later.
When to Choose Savings Plans
Savings Plans work best for:
- Dynamic workloads - Seasonal applications, development environments
- Multi-service architectures - Using EC2, Fargate, and Lambda together
- Uncertain future requirements - Expect to change instance types or regions
- Simplified management - Want set-and-forget cost optimization
Real-World Examples
Example 1: E-commerce Website
Scenario: Consistent baseline traffic with seasonal spikes
Current: 20 m5.large instances running 24/7, 50 additional instances during peak seasons
Recommendation: RIs for baseline + Savings Plans for peak capacity
Savings: $18,000/year (43% reduction)
Example 2: Microservices Architecture
Scenario: Mix of EC2, Fargate, and Lambda with changing requirements
Current: $50,000/month across multiple services and regions
Recommendation: Compute Savings Plans for maximum flexibility
Savings: $180,000/year (30% reduction)
The Bottom Line
For most organizations, a hybrid approach works best: use Reserved Instances for your most stable, predictable workloads where you need capacity guarantees, and Savings Plans for everything else. This combination typically delivers 35-50% overall savings while maintaining operational flexibility.
Calculate Your Potential Savings
Use our Reserved Instances ROI Calculator to model different commitment scenarios and find the optimal strategy for your workloads:
