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Savings Plans

Priority Tier 4 Domain 4: Design Cost-Optimized Architectures

AWS Savings Plans are a flexible pricing model designed to offer significant discounts on AWS compute usage in exchange for a 1 or 3-year commitment to a consistent amount of usage (e.g., dollar amount per hour). They provide similar cost-saving benefits to Reserved Instances but with greater flexibility across various compute services.

Learning Objectives

Savings Plans: Overview and Core Concepts

AWS Savings Plans are a commitment-based pricing model that helps reduce costs on compute services.

Savings Plans are a flexible pricing model offering reduced prices on EC2 and other services in exchange for a commitment to a consistent amount of usage (e.g., dollar amount per hour) for a 1- or 3-year term. They are not tied to specific instance attributes.
Savings Plans offer significant discounts, up to 72% compared to On-Demand pricing. They provide similar cost-saving benefits as Reserved Instances but with more flexibility.
Technical Specs: Save up to 72% compared to On-Demand; Save up to 65% compared to On-Demand
Savings Plans require a 1 or 3-year commitment. Unlike Reserved Instances, they are not tied to specific instance attributes (like instance type, region, tenancy, OS), offering flexibility across instance size, OS, and tenancy.
Technical Specs: 1 or 3-year commitment
Savings Plans are a key strategy for managing operational costs, especially for compute, and are considered a great option to save costs. They are included in cost optimization strategies as part of the Well-Architected Framework.

Types of Savings Plans

AWS offers different types of Savings Plans tailored for various compute services, each with specific flexibility and discount levels.

Compute Savings Plans

This is the most flexible type of Savings Plan. It automatically applies to eligible usage across Amazon EC2, AWS Fargate, and AWS Lambda, providing savings of up to 66%. They automatically adjust to changes in instance family, size, region, operating system, and tenancy.
coverage: EC2, Fargate, Lambda
discount: Up to 66%
flexibility: Instance family, size, region, OS, tenancy
Use Cases:
  • Predictable, long-term utilization on applications running on Lambda and EC2
  • Dynamic workloads where instance type needs may evolve but long-term usage is expected

EC2 Instance Savings Plans

These Savings Plans offer deeper discounts, up to 72%, but require a commitment to a specific instance family within a region. Within that committed instance family and region, they are flexible across instance size, operating system, and tenancy.
coverage: EC2 only
discount: Up to 72%
commitment_requirement: Specific instance family within a region
flexibility: Size, OS, tenancy within the committed instance family
Use Cases:
  • Workloads with a stable instance family but potential changes in size or OS

SageMaker Savings Plans

These plans provide cost savings for eligible Amazon SageMaker ML instance usage, offering up to 64% discount. They are specific to SageMaker instances.
coverage: SageMaker-specific instances
discount: Up to 64%

Savings Plans vs. Reserved Instances Comparison

comparison-table

Savings Plans and Reserved Instances (RIs) are both commitment-based pricing models, but they offer different levels of flexibility.

Both options provide significant discounts for long-term commitment, but Savings Plans offer broader flexibility.

Option Discount Commitment Term Flexibility
Savings Plans Up to 72% (EC2 Instance SP), Up to 66% (Compute SP) 1 or 3 years Flexible across instance size, OS, tenancy, region (Compute SP); specific instance family (EC2 Instance SP)
Reserved Instances (RIs) Up to 72% 1 or 3 years Tied to specific instance attributes (type, region, tenancy, OS); Convertible RIs offer more flexibility to change attributes during commitment, but with slightly less discount (up to 66%)

Use Cases and Cost Examples

Savings Plans are suitable for predictable, long-term workloads across various services, offering significant cost reductions.

Savings Plans are ideal for steady-state workloads with a 1 to 3-year commitment or visibility into usage. They are recommended for dynamic workloads where instance type needs may evolve but long-term usage is expected. This includes applications with predictable, long-term utilization on services like EC2, Fargate, and Lambda.
For an M5a.large Linux instance in us-east-1, a 1-Year EC2 Instance Savings Plan costs $0.051/hour, and a 3-Year EC2 Instance Savings Plan costs $0.0372/hour. This demonstrates significant savings compared to On-Demand rates.
Technical Specs: M5a.large Linux in us-east-1: 1-Year EC2 Instance Savings Plan: $0.051/hour; 3-Year EC2 Instance Savings Plan: $0.0372/hour
RDS Savings Plans can provide a 40% discount with a 1-year commitment, significantly reducing database costs. For example, in an optimized architecture, this could reduce the total monthly cost to $36-39/month.
Technical Specs: 40% discount with 1-year commitment for RDS Savings Plans
EC2 Capacity Reservations can be combined with Reserved Instances and Savings Plans for additional discounts, ensuring capacity availability with cost optimization.

Savings Plans: Management and Monitoring

AWS provides tools to manage and monitor Savings Plans to ensure optimal cost efficiency and track usage against commitments.

Savings Plans are an integral part of understanding and utilizing various purchasing options for cost management, matching workload predictability and fault tolerance. AWS Cost Explorer can be used to visualize, understand, and manage AWS costs, including those associated with Savings Plans.
AWS Budgets allows users to set custom budgets and thresholds for costs, usage, Savings Plans, or reservations. Users can receive alert notifications for actual or forecasted usage, enabling proactive action before overages occur.
The Cost and Usage Report is a comprehensive report that includes metadata about services, pricing, credits, fees, taxes, discounts, cost categories, Savings Plans, and Reserved Instances. This report can be focused on hourly, daily, or monthly granularity and exported to XML or CSV files for detailed analysis with services like Athena or QuickSight. Tags and cost categories can be used to track pricing information for Savings Plans.
Savings Plans can be accessed and managed directly within the AWS Management Console by navigating to 'Savings Plans' and then 'Create purchase savings plan'.

Exam Tips

Glossary

Savings Plans
A flexible pricing model offering reduced prices on compute services (EC2, Fargate, Lambda, SageMaker) in exchange for a 1 or 3-year commitment to a consistent amount of usage (e.g., dollar amount per hour).
Compute Savings Plans
A type of Savings Plan that is most flexible, applying to eligible usage across EC2, Fargate, and Lambda, adjusting automatically to changes in instance family, size, region, OS, and tenancy.
EC2 Instance Savings Plans
A type of Savings Plan that offers deeper discounts for EC2 usage but requires commitment to a specific instance family within a region, with flexibility in size, OS, and tenancy within that family.
SageMaker Savings Plans
A type of Savings Plan that provides cost savings for eligible Amazon SageMaker ML instance usage.
Reserved Instances (RIs)
A purchasing option that offers significant discounts (up to 72%) in exchange for a 1 or 3-year commitment to specific instance attributes (instance type, region, tenancy, OS).
On-Demand Instances
A pay-as-you-go EC2 pricing model, billed per second, with no upfront cost or long-term commitment.

Key Takeaways

Content Sources

EC2 Cost Optimization Strategies AWS Backup AWS Cost Optimization Deep Dive RSARCH_EN-US_SG_M07_WAPRINCIPLES_Study_Guide AWS Well-Architected Framework: Pilla... Extracted: 2026-01-26 14:20:01.042975 Model: gemini-2.5-flash