Savings Plans

Savings Plans are a subsection of Billing and Cost Management Home

Savings Plans are a flexible pricing model that offer significant cost savings on AWS compute services in exchange for a commitment to a consistent amount of usage (measured in $/hour) over a 1- or 3-year term.

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Key Benefits

  1. Provide automatic savings without needing to modify or exchange reservations.
  2. Enable cost optimization for predictable workloads.
  3. You are billed at the discounted rate for usage up to your committed amount.

Compute Savings Plans (Most Flexible)

  1. Apply to EC2, Fargate and Lambda
  2. Flexibility across instance family, size, region, AZ, OS, and tenancy
  3. up to 66% Savings over On-Demand.
  4. Ideal for workloads that change over time or run across multiple services.

Change over time - What does it mean?

It means we’re not locked into a specific EC2 instance type or region. We can switch between different EC2 types, or even move to Lambda and Fargate, and still benefit from the same Compute Savings Plan—as long as we are committed $/hour usage remains consistent.

Example:

  1. Today we use t3.medium in us-east-1
  2. Next month we switch to c5.large in eu-west-1
  3. We’re still covered under the same Compute Savings Plan

EC2 Instance Savings Plans (Highest Discount)

  1. Applies to EC2 only, and provides savings for a specific instance family (e.g., m5) in a single region.
  2. Flexibility across size, OS, AZ, and tenancy — but only within that instance family and region.
  3. Up to 72% savings.
  4. Best for steady-state EC2 workloads.

Steady-state EC2 workloads- What does it mean?

It refers to workloads that Run continuously over time (e.g., 24/7 or predictable usage patterns). Use a consistent instance family and region. Don't require frequent changes in instance type, region, or compute service.

In other words, we know in advance what instance family (e.g.,m5) we’ll use and in which region, and you plan to use it regularly. This makes EC2 Instance Savings Plans a great fit.

SageMaker Savings Plans

  1. Apply to Amazon SageMaker usage.
  2. Flexibility across instance family, size, components (e.g., training, inference), and region.
  3. Up to 64% savings.
  4. Targeted for ML workloads using SageMaker.

Others

  1. Savings Plans are more flexible than Reserved Instances, especially Compute Savings Plans.
  2. Use Compute Savings Plans when workloads span across multiple services or vary over time.
  3. Use EC2 Instance Savings Plans for predictable EC2 instance family usage in a region.
  4. Savings Plans are automatically applied to eligible usage—no manual allocation needed.