Short answer for a small team: buy a one-year, no-upfront Compute Savings Plan that covers most of your steady compute baseline, and look at Database Savings Plans or RDS Reserved Instances for databases that run all year. Reserved Instances and EC2 Instance Savings Plans squeeze out a few more points of discount, but they’re only worth the inflexibility when your EC2 fleet is large and stable.
Here’s how the options compare, and how to decide how much to commit.
In This Post
The Options
| Covers | Max discount | Flexibility | Terms | |
|---|---|---|---|---|
| Compute Savings Plan | EC2, Fargate, Lambda | Up to 66% | Any instance family, size, region, OS; moves with you to containers | 1 or 3 years; no, partial or all upfront |
| EC2 Instance Savings Plan | EC2 in one instance family and region | Up to 72% | Any size within the family, any OS | 1 or 3 years |
| EC2 Reserved Instances | EC2, specific type and region | Up to 72% | Convertible RIs can be exchanged; Standard RIs can be resold | 1 or 3 years |
| RDS Reserved Instances | RDS, specific engine and family | Up to 69% | Size flexibility within a family for most engines | 1 or 3 years |
| Database Savings Plan | RDS, Aurora and other managed databases | Up to 35% | Any engine, instance type, deployment and region | 1 year, no upfront only |
The headline discounts assume a 3-year, all-upfront commitment. A one-year, no-upfront plan saves noticeably less, but it’s the right first step for most small teams because it doesn’t bet on what you’ll be running in 2029. Discounts also vary by service: Fargate and Lambda get smaller discounts than EC2 under a Compute Savings Plan. Check current rates on the Savings Plans pricing pages.
How Savings Plans Actually Work
A Savings Plan is a commitment to spend a fixed amount per hour on eligible usage, say $1.50/hour, for the term. Every hour, AWS applies the discount to your eligible usage up to that commitment. Usage above it is billed at on-demand rates. Usage below it still costs you the full commitment.
That last part is why you commit to your floor, not your average. An hour where you only use $1.00 of compute still costs you $1.50.
Why Compute Savings Plans Win for Small Teams
Small teams change things. You move from EC2 to containers, upgrade to Graviton, shift regions, or replace a service with Lambda. A Compute Savings Plan follows all of that automatically.
An EC2 Instance Savings Plan or a Reserved Instance pins you to an instance family in a region. If you move to Fargate next year, that commitment keeps billing for capacity you no longer use. The extra few points of discount rarely make up for that risk unless you run a large, stable fleet of the same instances.
Databases: RDS Reserved Instances vs Database Savings Plans
Compute Savings Plans don’t touch RDS. You have two choices:
- RDS Reserved Instances: bigger discounts, 1 or 3 years, tied to an engine and instance family in a region. Good for a database you’re confident won’t change.
- Database Savings Plans (launched December 2025): up to 35% off, 1-year, no upfront, and they apply across engines, instance families, deployment types and regions. Good if you might upgrade instance generations, move to Aurora, or change regions within the year.
For a typical small team with one or two production databases that will run all year, either works. Pick reservations if the database won’t change and you want the deeper discount; pick the Savings Plan if it might.
How Much to Commit
- In Cost Explorer, look at hourly or daily compute spend for the last 3 months.
- Find the baseline: the level you’re always above, nights and weekends included.
- Cover 60–80% of that baseline (measured at on-demand rates) with a one-year, no-upfront plan. Remember the commitment itself is in discounted dollars, so it’s a smaller number.
- Use the Savings Plans recommendations in the console as a cross-check, not the answer. They’re based on past usage and don’t know about the migration you’re planning.
- Review quarterly. You can always buy another plan on top; you can never shrink one.
Two sanity checks before you buy:
- Rightsize first. Committing to oversized servers locks in the waste. Cut the obvious waste (see Why Is My AWS Bill So High?), then commit to what’s left.
- Check upcoming changes. A planned move to containers or ARM is fine under a Compute Savings Plan, and a problem under EC2 Reserved Instances.
A Worked Example
A team runs $2,000/month of steady compute (EC2 and Fargate, about $2.74/hour), with peaks during business hours. Their overnight floor, at on-demand rates, is about $2.20/hour.
- The commitment is measured in discounted dollars. At a one-year, no-upfront discount of around 20–25%, $1.30/hour of commitment covers roughly $1.65–1.75/hour of on-demand usage: about 75–80% of the floor, so it’s fully used every hour with room to spare.
- They commit $1.30/hour: about $950 a month that replaces roughly $1,230 of on-demand charges. Everything above the floor stays on-demand and flexible.
- After rightsizing next quarter, if the floor holds, they add a second plan.
The exact saving depends on the services and instance types involved, which is why the commitment math belongs on your own usage data.
Want the commitment worked out for you? Our AWS cost audit includes a commitment plan: what to buy, how much, and for how long, after the rightsizing that should come first.
FAQ
Frequently Asked Questions
Are Savings Plans better than Reserved Instances?
For most small teams, yes. Compute Savings Plans discount EC2, Fargate and Lambda and follow your usage when you change instance types, regions or move to containers. EC2 Reserved Instances and EC2 Instance Savings Plans can discount EC2 a little more, but lock you into an instance family and region.
How much should I commit to a Savings Plan?
Commit to your steady baseline, not your peak: the lowest hourly compute spend you've seen consistently over the last few months. Many teams start by covering 60–80% of that baseline with a one-year, no-upfront plan and add more later. You can't reduce a commitment once it's bought.
Do Savings Plans cover RDS?
Compute Savings Plans don't. Databases are covered by RDS Reserved Instances, or by Database Savings Plans, which AWS launched in December 2025 with discounts of up to 35% on a one-year term that apply across engines, instance types and regions.
Can I cancel a Savings Plan or Reserved Instance?
No. Both are commitments for the full term. Standard EC2 Reserved Instances can be sold on the Reserved Instance Marketplace, which is one reason some teams still use them, but Savings Plans can't be resold.