EC2 Pricing Models

EC2 offers multiple pricing models, each suited to different usage patterns and commitment levels. Choosing the right model — or combining models — can reduce your compute costs by 60-90% compared to On-Demand pricing. This lesson covers all the major options.

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Overview of Pricing Models

Model	Commitment	Discount vs On-Demand	Best For
On-Demand	None	0% (baseline)	Unpredictable workloads, short-term, development
Reserved Instances	1 or 3 years	Up to 72%	Steady-state, predictable workloads
Savings Plans	1 or 3 years	Up to 72%	Flexible commitment across instance types
Spot Instances	None	Up to 90%	Fault-tolerant, flexible workloads
Dedicated Hosts	On-Demand or Reserved	Varies	Licensing, compliance, regulatory requirements
Dedicated Instances	On-Demand pricing + fee	Small premium	Hardware isolation without host management
Capacity Reservations	None	0% (On-Demand rates)	Guaranteed capacity in a specific AZ

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On-Demand Instances

How It Works