What should I consider before purchasing an Amazon EC2 Reserved Instance?

Last updated: 2022-06-07

I plan to use a particular Amazon Elastic Compute Cloud (Amazon EC2) instance configuration for steady-state workflows over a long period of time. What factors should I consider before purchasing a matching Reserved Instance?

Resolution

Consider the following when deciding if Reserved Instances (RI) are right for you.

Long term contracts

Reserved Instances have long contract terms (usually, one or three years). This means that you should purchase reservations only for an instance specification that you use over the long term.

Billed as lump sum

Most Reserved Instances are billed as a lump sum each month for each hour in that month. You're billed for this amount whether or not you ran an instance that matched your reservation. Reserved Instances provide the maximum discount for instance types that you use often and for long periods of time.

If your account is in an organization's consolidated billing family, then additional considerations might apply. For more information, see How is the pricing benefit of a Reserved Instance applied across an organization's consolidated bill?

Canceling and modifying a RI

You can't cancel a Reserved Instance. However, you can modify your Reserved Instance, subject to certain restrictions. For information about the available types of modifications, see Modify Reserved Instances.

If you decide that you don't need an EC2 Reserved Instance after you purchase it and you have access to a US bank account, you can sell the Reserved Instance on the EC2 Reserved Instance Marketplace. For more details, see How do I sell an Amazon EC2 Reserved Instance on the Reserved Instance Marketplace?

Capacity reservations and short-term discounts

  • Capacity reservations apply only to zonal Reserved Instances, not Regional Reserved Instances. If you're interested in the capacity reservation but not the billing discount, then you might want to use On-Demand Capacity Reservations.
  • For short-term discounts on EC2 instances, consider launching a Spot Instance instead.

Pricing and purchasing an RI

For pricing information for EC2 Reserved Instances, see Amazon EC2 Reserved Instances Pricing.

To purchase an EC2 Reserved Instance, see How do I purchase an Amazon EC2 Reserved Instance?

After the reservation expires, the instance is charged as an On-Demand Instance. You can repurchase the RI to continue the discounted rate on your instance. You can schedule an EC2 Reserved Instance to renew automatically, see Can I schedule my EC2 Reserved Instance to renew automatically?


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