AWS offers multiple ways to pay for EC2 instances, optimized for cost, flexibility, and workload type.
On-Demand Instances
- Pay per use:
- Linux/Windows → per second (after first minute)
- Other OS → per hour
- No upfront payment, no long-term commitment.
- Highest cost but maximum flexibility.
- Best for short-term, unpredictable workloads.
Reserved Instances (RI) – 1 or 3 years
- Up to 72% discount vs On-Demand.
- Reserve specific instance attributes (type, region, tenancy, OS).
- Payment options: No Upfront, Partial Upfront, All Upfront.
- Scope: Regional (billing benefit) or Zonal (billing + capacity).
- Best for steady-state workloads (e.g., databases).
- Can be bought/sold in RI Marketplace.
Convertible RI:
- Flexible changes (type, family, OS, scope, tenancy).
- Up to 66% discount.
Savings Plans – 1 or 3 years
- Commit to a dollar/hour spend (e.g., $10/hr) for compute usage.
- Up to 72% discount like RIs.
- Flexible across instance size, OS, and tenancy (within family & region).
- Excess usage billed at On-Demand rates.
Spot Instances
- Up to 90% discount vs On-Demand.
- Can be interrupted anytime if Spot price exceeds your max bid.
- Best for fault-tolerant, flexible workloads: batch jobs, data analysis, image processing, distributed systems.
- Not suitable for critical or persistent workloads.
Dedicated Hosts
- Physical server fully dedicated to you.
- Meet compliance needs or run BYOL software tied to hardware.
- Most expensive option.
- Purchase On-Demand or Reserved (1–3 years).
Dedicated Instances
- Instances on hardware dedicated to you (but may share hardware with your other instances).
- No placement control; may change after stop/start.
Capacity Reservations
- Reserve On-Demand capacity in a specific AZ for any duration.
- No time commitment, but pay On-Demand rates regardless of usage.
- Guarantees availability; can combine with RI/Savings Plans for discounts.