AWS Savings Plans vs Reserved Instances: Choosing the Right Commitment for Your Cloud Costs

Cloud costs can get messy and faster than you can blink. If you’re running workloads on AWS, you already know that the flexibility of on-demand pricing comes at a steep price. To help customers save, AWS offers two major long-term commitment models: Reserved Instances (RIs) and Savings Plans.

At first glance, they might sound interchangeable, but in reality, they differ in commitment, flexibility, pricing models, and use cases. Choosing the wrong one can either lock you into wasteful capacity or leave money on the table.

In this blog, we’ll break down:

• What Reserved Instances are (and how they work)

• What Savings Plans are (and how they work)

• Key differences between Reserved Instances and Savings Plans

• Pros and cons of each option

• Best practices for maximizing savings

• How FinOps teams should approach RIs and Savings Plans

Let’s dive in.

What Are AWS Reserved Instances (RIs)?

Reserved Instances (RIs) were AWS’s first major attempt to help customers reduce cloud spend. With RIs, you commit to using a specific instance type, in a specific region, for a 1-year or 3-year term. In return, AWS gives you a hefty discount (up to 72%) compared to on-demand pricing.

There are two main types of RIs:

1. Standard RIs
   
   

   • Biggest discount (up to 72%)

   • Least flexible, tied to a specific instance family, OS, tenancy, and region

   • Ideal for steady, predictable workloads
     
     

2. Convertible RIs
   
   

   • Lower discount (up to ~54%)

   • More flexible, you can exchange for a different instance type or family during the term

   • Useful if your workloads change, but still not as flexible as Savings Plans

Payment Options for RIs

RIs also come with payment flexibility:

• All Upfront (AURI): Pay everything at once; maximum savings

• Partial Upfront (PURI): Pay some upfront, some monthly

• No Upfront (NURI): Pay monthly, lower savings

What Are AWS Savings Plans?

AWS introduced Savings Plans in 2019 as a simpler, more flexible alternative to RIs. Instead of committing to specific instances, you commit to spending a fixed amount per hour ($/hr) on compute usage for 1 or 3 years.

Discounts can be as high as 66% compared to on-demand pricing, slightly less than RIs, but the flexibility is much greater.

There are two main types of Savings Plans:

1. Compute Savings Plans
   
   

   • Most flexible option

   • Apply to any EC2 instance regardless of region, family, OS, or tenancy

   • Also extend to AWS Fargate and Lambda usage

   • Perfect for dynamic environments (like Kubernetes, containerized workloads, multi-region deployments)
     
     

2. EC2 Instance Savings Plans
   
   

   • Tied to a specific instance family in a region (e.g., m5.large in us-east-1)

   • Higher discount (similar to Standard RIs)

   • Good for workloads that don’t move much but still want easier management

Payment Options for Savings Plans

Just like RIs, Savings Plans have three payment types:

• All Upfront (best discount)

• Partial Upfront

• No Upfront (pay as you go, lower discount)

Key Differences: Reserved Instances vs Savings Plans

Pros and Cons of Reserved Instances (RIs) vs. Savings Plans

Reserved Instances (RIs)

Pros of Reserved Instances (RIs)

1. Maximum discount potential: Standard RIs, when purchased for a 3-year term with full upfront payment, offer the highest possible discounts, often up to 72% compared to On-Demand pricing. For organizations running predictable, steady-state workloads, this translates into huge savings.
   
   

2. Great for long-term, stable workloads: If you know that your applications will run continuously without significant changes in compute demand, RIs lock in a low price and guarantee capacity in specific availability zones. This is particularly useful for legacy applications, production environments, or databases that don’t change frequently.
   
   

3. Convertible RIs offer some flexibility:  Convertible RIs allow you to exchange one RI for another, giving some flexibility if your workload needs change, for example, moving from one instance family to another. While not as flexible as Savings Plans, this still provides a safety net if your infrastructure evolves.

Cons of Reserved Instances (RIs)

1. High risk of unused capacity: The biggest drawback of RIs is the potential for “orphaned” reservations. You’re locked into paying for capacity whether you use it or not. If you overestimate your needs or your workload scales down, the unused RI commitments translate directly into wasted spend.
   
   

2. Limited to EC2 only: Reserved Instances apply only to Amazon EC2. This makes them less attractive in modern, cloud-native environments where workloads often run on containers (ECS/EKS), serverless (Lambda), or other AWS services.
   
   

3. Complex to manage at scale: For organizations running across multiple AWS accounts or regions, managing RIs can get complicated. You need to track utilization rates, ensure reservations are applied to the right workloads, and avoid overlaps. Without proper FinOps practices, you can lose the very savings you were aiming for.
   
   

4. Rigid commitments: Even with Convertible RIs, you’re still tied into specific instance types or families. If AWS releases new instance generations or your architecture shifts drastically, you may find your RIs don’t align with your new needs.

Savings Plans

Pros of Savings Plans

1. Broad flexibility across services: Unlike RIs, Savings Plans apply not only to EC2 but also to AWS Fargate and AWS Lambda. This makes them much more suitable for cloud-native, modern workloads where teams mix virtual machines, containers, and serverless functions.
   
   

2. Simpler management: With Savings Plans, you don’t have to worry about instance families, regions, or availability zones. You simply commit to a dollar-per-hour spend (e.g., $20/hour), and AWS automatically applies the discount to your eligible usage. This simplicity makes it easier to adopt and reduces the risk of mismanagement.
   
   

3. Strong discounts:  While not as high as Standard RIs, Savings Plans can still provide up to 66% discounts compared to On-Demand rates. For many organizations, the trade-off between slightly lower savings and much higher flexibility is worth it.
   
   

4. Ideal for evolving workloads: If your environment is constantly changing, scaling up or down, moving from EC2 to containers, or adopting serverless, Savings Plans ensure your discounts still apply without having to constantly reshuffle commitments.

Cons of Savings Plans

1. Lower maximum savings than RIs: The ceiling on Savings Plan discounts is lower than Standard RIs, meaning that if you have completely static, predictable workloads, you may miss out on potential savings.
   
   

2. Commitment risk still exists: Even though they’re more flexible, Savings Plans still require a 1- or 3-year commitment. If your actual cloud spend drops below your committed level, you’ll continue paying for unused commitments.
   
   

3. Less control over specific instance reservations: Savings Plans apply broadly and automatically, which is generally a pro. However, if you’re running workloads that require guaranteed capacity in a specific AZ or have very fine-tuned optimization needs, RIs may give you more control than Savings Plans.

Also read: FinOps for Serverless: Smart Cost Management in Lambda & FaaS

When Should You Choose Reserved Instances (RIs)?

Reserved Instances are a solid choice if your cloud usage is steady, predictable, and long-term. They work best in scenarios where workloads don’t fluctuate much over time.

For example, if you’re running databases, virtual machines, or critical applications that need to stay online 24/7, RIs can help you lock in the lowest possible price for that infrastructure. Standard RIs, in particular, provide the maximum discount (up to 75%), but the tradeoff is less flexibility.

Organizations with well-understood demand patterns (like traditional enterprises or SaaS companies running consistent backend services) often prefer RIs because they can commit with confidence. Convertible RIs provide some wiggle room if your needs change, but the overall idea remains the same. You’re betting on predictability and stability in exchange for deep cost savings.

Choose RIs if:

• You run steady-state workloads such as databases, caching layers, or internal business apps.

• You want maximum discount potential and are comfortable with long-term commitments.

• Your infrastructure is unlikely to change instance families or regions in the next 1-3 years.

When Should You Choose Savings Plans?

Savings Plans shine in environments where flexibility is just as important as cost savings. Unlike RIs, they aren’t limited to a specific instance type or region. Instead, they apply discounts to a broad set of compute services, including EC2, Fargate, and Lambda.

This makes them a great fit for modern, cloud-native workloads where resource usage can shift frequently. For example, if your teams are running containerized workloads on ECS or EKS, or scaling serverless functions with Lambda, Savings Plans give you discounted pricing without the hassle of constantly managing and adjusting RIs.

They’re also easier to administer at scale, since you don’t need to track hundreds of reservations across accounts and regions. While the discounts aren’t as steep as Standard RIs (up to ~66%), they strike a practical balance between savings and operational simplicity.

Choose Savings Plans if:

• Your workloads fluctuate across instance families, regions, or even different AWS services.

• You rely heavily on containers or serverless (EKS, ECS, Fargate, Lambda).

• You want a simpler way to manage commitments without micromanaging RIs.

• You need flexibility but still want meaningful discounts.

Best Practices for Using RIs and Savings Plans

1. Analyze Usage Before Committing
   
   

   • Use AWS Cost Explorer or third-party FinOps tools like Amnic to identify steady-state vs variable workloads.
     
     

2. Mix and Match
   
   

   • Many organizations use a combination: RIs for predictable workloads, Savings Plans for variable ones.
     
     

3. Start Small
   
   

   • Don’t overcommit and begin with a conservative plan and adjust as usage stabilizes.
     
     

4. Leverage Convertible RIs if Unsure
   
   

   • They offer flexibility to exchange, reducing lock-in risk.
     
     

5. Monitor Utilization Continuously
   
   

   • Track how much of your commitment is being used as idle commitments = wasted spend.
     
     

6. Align with FinOps Practice
   
   

   • Finance, engineering, and product teams should collaborate to balance cost savings with flexibility. This really is a non-negotiable.

How FinOps Teams Should Think About RIs vs Savings Plans

In a FinOps culture, the question isn’t just “Which saves more money?” but “Which aligns best with business agility and growth?”

• Finance teams love RIs for predictable budgeting.

• Engineering teams prefer Savings Plans for flexibility.

• Leadership cares about both savings and adaptability.

The winning approach is often a hybrid strategy:

• Lock in deep savings for steady workloads with RIs

• Use Savings Plans to cover dynamic, unpredictable usage

• Continuously monitor commitments with cost observability tools

Final Thoughts

Both AWS Reserved Instances and Savings Plans are powerful tools to cut cloud costs, but they’re not one-size-fits-all.

• RIs = higher discounts, less flexibility

• Savings Plans = lower discounts, higher flexibility

The right choice depends on your workload stability, business priorities, and FinOps maturity.

If you want maximum ROI, don’t just pick one. Blend them strategically, monitor utilization, and align with your company’s growth path.

With clear visibility into usage patterns, cost commitments, and potential waste, Amnic ensures you don’t just save on paper; you actually realize those savings. Whether you’re leaning on RIs, Savings Plans, or a hybrid of both, Amnic helps you align cloud commitments with real business outcomes.

• [Request a demo and speak to our experts]

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• [Download our free FinOps resources]

Recommended Articles

• What is CloudWatch: Your Essential AWS Monitoring Guide

• ECS vs. EKS: Choosing the Right Container Orchestration for Your Workloads

• Everything you need to know about AWS EC2 Pricing in 2025

• Top 25 FinOps Tools to Look Out for in 2025: A Guide

FAQs: AWS Reserved Instances vs. Savings Plans

1. Are Reserved Instances and Savings Plans the same thing?

No. While both are AWS pricing models designed to lower costs through long-term commitments, they differ in flexibility. RIs lock you into a specific instance type and region, while Savings Plans apply more broadly across services like EC2, Fargate, and Lambda.

2. Which offers the bigger discount: RIs or Savings Plans?

Reserved Instances (especially Standard RIs with 3-year, all-upfront payments) can provide the deepest discounts, up to 72%. Savings Plans max out at around 66%, but offer far more flexibility across services and regions.

3. Do Reserved Instances guarantee capacity?

Yes, unlike Savings Plans, RIs can reserve capacity in a specific Availability Zone, which is useful for workloads that require guaranteed compute resources. Savings Plans, on the other hand, only provide discounted pricing, not capacity reservations.

4. Can I change or cancel Reserved Instances or Savings Plans?

• Standard RIs: Very rigid, you cannot change instance families or regions.

• Convertible RIs: You can exchange them for different instance families or types.

• Savings Plans: Cannot be canceled or reduced, but they automatically apply discounts to eligible usage across services.

5. Which is easier to manage: RIs or Savings Plans?

Savings Plans are easier to manage. They apply automatically to eligible compute usage without needing to track specific instance families or regions. RIs require careful tracking and allocation to ensure full utilization, especially in multi-account or multi-region setups.

6. Should I use only Reserved Instances or only Savings Plans?

Not necessarily. Many organizations adopt a hybrid approach:

• Use RIs for highly predictable, steady workloads (like databases or always-on VMs).

• Use Savings Plans for variable or modern workloads (like containers or serverless).

7. What happens if I don’t use all my Reserved Instances or Savings Plans?

You’ll still pay for them. Both models require a 1- or 3-year commitment. If your actual usage drops below your committed level, the unused portion becomes wasted spend. That’s why ongoing monitoring and forecasting are critical.

8. How do FinOps teams approach RIs vs. Savings Plans?

FinOps teams look beyond just discounts. They balance cost savings with business agility:

• Finance teams may lean toward RIs for budget predictability.

• Engineering teams often prefer Savings Plans for flexibility.

• The best approach usually blends both, supported by tools like Amnic to track utilization and optimize commitments in real-time.

9. How do I know if my organization is ready for RIs or Savings Plans?

If your workloads are steady, predictable, and you have strong governance in place, you’re ready for RIs. If your workloads are evolving, scaling dynamically, or you’re early in your cloud journey, Savings Plans may be a better fit.

10. How can Amnic help with RIs and Savings Plans?

Amnic provides visibility into your cloud usage, highlights underutilized commitments, and ensures your savings strategies actually match your real-world consumption. Instead of leaving savings on paper, Amnic helps you realize them in practice.