AWS Reserved Instances and Savings Plans both give you discounts in exchange for a 1- or 3-year commitment. The discount rates are similar — 30–72% off on-demand, depending on how you commit. The mechanisms are meaningfully different.
Reserved Instances
You commit to a specific instance type, in a specific region (or Availability Zone for zonal RIs). The discount is maximally applied when your usage matches the commitment exactly. Zonal RIs also give you capacity reservations — a meaningful benefit if you're in a capacity-constrained region.
The risk: if you change instance type (for right-sizing, for a new generation, for a different workload), you're carrying a commitment that no longer maps to your usage. You can sell Standard RIs on the Marketplace, but not Convertible RIs, and the Marketplace isn't always liquid.
Savings Plans
You commit to a spend rate ($/hour) rather than a specific instance. Compute Savings Plans apply across any instance family, region, or OS — the most flexible. EC2 Instance Savings Plans are more restrictive but offer a slightly higher discount.
The risk: the commitment is financial rather than capacity. You don't get capacity reservations. In a crunch, AWS prioritises on-demand customers with reservations first.
What we recommend
For most teams: Compute Savings Plans for baseline coverage, On-Demand for burst, and zonal Reserved Instances only for workloads with specific capacity reservation needs.
Buy in tranches. Don't commit 100% of your baseline in one purchase. Buy 40% of your forecasted coverage, run for 60 days, then buy more. The 60 days of data will correct your forecast, and the incremental approach prevents over-commitment if your workload changes.
