FinOps
AWS Reserved Instances vs Savings Plans: The 2026 Guide
Standard vs Convertible RIs and Compute vs EC2 Instance Savings Plans: how each works, what happens when usage drops, and EC2 discounts without the lock-in.
Reserved Instances and Savings Plans are how AWS pays you for predictability. Commit to one or three years of usage, and AWS cuts your rate. Both also keep billing you for the commitment if your usage falls.
This guide covers how each one works in 2026, what happens when usage drops, and an option that doesn’t ask you to commit at all.
The short answer
- Standard Reserved Instances give the deepest EC2 discount, up to 72% off on-demand per AWS, but tie you to one instance family for the term. They are the only AWS commitment you can resell.
- Convertible Reserved Instances trade some discount (up to 66%) for the right to exchange into other instance families, operating systems and tenancies.
- Compute Savings Plans (up to 66%) follow your spend across EC2, Fargate and Lambda, in any Region.
- EC2 Instance Savings Plans (up to 72%) match the Standard RI discount for one instance family in one Region, with less admin.
- All four bill you for the full 1- or 3-year term, whether you use the capacity or not.
- Commitment-Free Discounts from RightSpend give 20–55% off on-demand EC2 with no term to sign. EC2 only.
How Reserved Instances work
A Reserved Instance isn’t a server. It’s a billing discount that AWS applies to running instances that match its attributes: instance type, Region, platform (the operating system) and tenancy. You buy it for 1 or 3 years and pay All Upfront, Partial Upfront or No Upfront.
Once bought, an RI can’t be canceled. You pay for every hour of the term, used or not. When it expires, it doesn’t renew: matching instances go back to on-demand rates.
RIs come in two scopes. A regional RI applies in any Availability Zone in its Region and, for Linux with default tenancy, across instance sizes in the same family. A zonal RI is pinned to one Availability Zone, but it also reserves capacity there. Savings Plans don’t reserve capacity.
Standard Reserved Instances
Standard RIs give the most discount: up to 72% off on-demand. During the term you can modify the Availability Zone, the scope, and the instance size within the same family and generation (Linux/UNIX only). You can’t change the instance family, generation, operating system or tenancy. An m5 reservation stays an m5 reservation after you move that workload to m7i or Graviton.
Standard RIs are the only AWS commitment you can sell. The Reserved Instance Marketplace lets you list unused Standard RIs, with conditions. The RI must have been active for at least 30 days with at least a month left. You need a bank account with a US address. AWS charges a 12% fee on the upfront price, and each account can sell no more than $50,000 of RIs in its lifetime.
Convertible Reserved Instances
Convertible RIs give less discount, up to 66% off on-demand, in exchange for flexibility. You can exchange one for another Convertible RI with a different instance family, operating system or tenancy, as often as you like, as long as the new reservation is of equal or greater value. The end date doesn’t move, and the Region is fixed.
The catch is in that value rule. You can exchange up, not down, so an exchange can’t shrink your bill. Convertible RIs also can’t be sold on the Marketplace. And they need an operator: someone has to spot the mismatch and run the exchange.
How Savings Plans work
Savings Plans arrived in 2019 as the simpler option. Instead of reserving instance attributes, you commit to a fixed amount of compute spend, in dollars per hour, for 1 or 3 years. Usage up to that amount is billed at Savings Plans rates. Usage above it is billed at on-demand rates. The payment options are the same three as for RIs.
Compute Savings Plans
Compute Savings Plans are the most flexible, at up to 66% off. They apply to EC2 regardless of instance family, size, Availability Zone, Region, operating system or tenancy, and also to Fargate and Lambda. Move from x86 to Graviton, or from us-east-1 to eu-west-1, and the discount follows.
EC2 Instance Savings Plans
EC2 Instance Savings Plans reach up to 72% off, matching Standard RIs. You commit to one instance family in one Region, for example m7i in us-east-1. Within that family, the discount covers any size, Availability Zone, operating system and tenancy. Change family or Region and it stops applying.
What Savings Plans can’t do
A Savings Plan can’t be canceled, exchanged or sold. AWS allows one narrow exception: you can return a plan with an hourly commitment of $100 or less if you bought it in the last 7 days and in the same calendar month. After that, you hold it for the full term.
AWS also sells Savings Plans for SageMaker AI and for databases. This guide sticks to the two that cover EC2.
Side by side
| Standard RI | Convertible RI | Compute Savings Plan | EC2 Instance Savings Plan | RightSpend | |
|---|---|---|---|---|---|
| Discount off on-demand | Up to 72% | Up to 66% | Up to 66% | Up to 72% | 20–55%, before the fee |
| Term | 1 or 3 years | 1 or 3 years | 1 or 3 years | 1 or 3 years | None |
| Upfront payment | All, Partial or No Upfront | All, Partial or No Upfront | All, Partial or No Upfront | All, Partial or No Upfront | None |
| What you commit to | Instance type, Region, OS and tenancy | The same, but exchangeable | A $/hour compute spend | A $/hour spend on one family in one Region | No 1- or 3-year commitment |
| Covers | EC2 | EC2 | EC2, Fargate, Lambda | EC2 | EC2 only |
| Flexibility | AZ, scope, and size within the family (Linux) | Exchange family, OS or tenancy for equal or greater value | Any family, size, Region, OS or tenancy | Any size, AZ, OS or tenancy within the family | Not locked to instance types or families |
| If usage drops | You pay every hour anyway | You pay every hour anyway | You pay the full commitment | You pay the full commitment | Rungs expire; the fee falls with the savings |
| Getting out early | Sell on the RI Marketplace, with limits | Exchange only; can’t sell or cancel | Can’t cancel, exchange or sell (7-day return on small plans) | Can’t cancel, exchange or sell (7-day return on small plans) | Stop the subscription |
The AWS figures are the maximums AWS publishes, and the deepest rates need a 3-year term. RightSpend’s figure is a range, not a promise: where you land depends on your usage.
What happens when your usage drops
Here the four AWS instruments look alike: each bills you for the commitment you signed, not the usage you have.
Take an illustrative case. You buy a 3-year Compute Savings Plan at $50 an hour, sized to last quarter’s usage. A year later you’ve rightsized your fleet, retired a product line and moved analytics to a managed service. Eligible usage is now $30 an hour at Savings Plans rates. You still pay $50. That’s $20 an hour for nothing: about $14,600 a month, and roughly $350,000 over the two years left on the term.
Your options from there:
- Standard RIs: sell them on the Marketplace, if a buyer wants your configuration, minus AWS’s 12% fee.
- Convertible RIs: exchange into something you do run, but only for equal or greater value. You can’t exchange your way to a smaller bill.
- Savings Plans: nothing. You wait for the term to end.
The usual defense is to under-commit on purpose: cover only the floor you’re certain of and leave the rest at on-demand rates. That limits the downside, and leaves everything above the floor at full price.
The lock-in problem
All four make the same bet: that you can forecast your compute for the next one to three years.
That bet gets harder every year. New instance generations arrive. Graviton changes the price of the same work. Teams move to containers and serverless. Projects end early.
Good cost work makes it worse. Rightsizing an oversized instance, stopping an idle one or moving to a newer family all change what you run. If a commitment was sized to the old fleet, the money you saved goes to paying for the empty commitment. Teams end up choosing between fixing waste and protecting their RIs.
That’s the lock-in problem. It isn’t one instrument’s flaw. It’s the term.
The alternative: Commitment-Free Discounts
RightSpend gives you Commitment-Free Discounts on EC2: 20–55% off on-demand, with no 1- or 3-year term to sign and no upfront payment. It changes the rate you pay for the EC2 you run. It doesn’t touch your instances.
How it avoids the lock-in
Instead of one long commitment, RightSpend covers your usage with a ladder of short-dated discount rungs. When your usage falls, rungs expire and aren’t replaced, so coverage follows your usage down. RightSpend also doesn’t lock you into instance types or families.
If you leave, RightSpend stops adding rungs and the remaining ones expire. Your EC2 returns to on-demand rates, with no stranded commitment for you to carry. When a global consulting firm left RightSpend, its ladder unwound in 14 days.
How the fee works
RightSpend’s fee is 25% of the net-new savings it generates. You keep 75%. If RightSpend saves you $10,000 in a month on top of what you already save, the fee is $2,500 and you keep $7,500.
Savings from your own Reserved Instances and Savings Plans don’t count as net-new, so there’s no fee on them. RightSpend runs alongside them and covers the on-demand EC2 they miss. The fee is ongoing and scales with your EC2 use: when usage falls, the savings and the fee fall together. No net-new savings, no fee. It’s billed monthly through AWS Marketplace, so it shows up on your AWS bill.
Where it doesn’t fit
RightSpend covers EC2 only. It won’t discount Fargate, Lambda, RDS or other services, so a Compute Savings Plan or service-specific reservations still have a job there. It’s built for teams spending $25K a month or more on EC2. Below that, the savings may not justify the setup.
How it compares with commitment managers
Most tools in this space still run on AWS commitments. nOps and ProsperOps buy and rebalance Savings Plans and RIs for you. Archera and Usage.ai put a guarantee, rebate or buyback on top of the commitments they place. All four cover more clouds and services than RightSpend does. RightSpend is narrower on purpose: EC2 only, no term, and a published fee.
Fix usage first, then discount what’s left
Your AWS bill is usage multiplied by rate. Commitments, and RightSpend, only change the rate. Lock a discount onto an instance you were about to resize or remove, and you’ve paid to protect waste.
CloudFix works on the usage side. It finds waste such as idle resources, oversized instances and gp2 volumes, and fixes what you approve. CloudFix customers typically save 15–60% on each AWS service optimized, which adds up to 20–35% off the total bill.
When CloudFix resizes or removes an instance, RightSpend drops that coverage to make room. With RightSpend, cutting usage never strands a commitment, which is exactly the conflict RIs and Savings Plans create.
To see the usage side first, run a free CloudFix assessment. It takes about 5 minutes to connect, and results typically arrive within 24 hours.
Which should you choose?
- Stable EC2 you’re certain of for three years, and you need reserved capacity: zonal Standard RIs.
- Stable EC2 in one family and Region, with less admin: an EC2 Instance Savings Plan.
- A steady floor of compute across EC2, Fargate and Lambda: a Compute Savings Plan.
- EC2 that may change family but won’t shrink: Convertible RIs, with someone to run the exchanges.
- EC2 usage that could fall, or that you’re about to rightsize: Commitment-Free Discounts from RightSpend.
You can also combine them: a Compute Savings Plan on the floor you’re sure of, and RightSpend on the EC2 above it, with no fee on the savings the plan already delivers. For a visual walk-through of the trade-off between discount, flexibility and complexity, watch our webinar on Savings Plans vs Convertible Reserved Instances.
Frequently asked questions
Are Savings Plans better than Reserved Instances?
For most teams, yes. AWS’s own EC2 documentation recommends Savings Plans over RIs, calling them the easiest and most flexible way to save on compute. Standard RIs still make sense when you need zonal capacity reservations or want the option to resell. Neither removes the 1- or 3-year commitment.
Can I cancel a Reserved Instance or a Savings Plan?
No. RIs can’t be canceled after purchase, and Savings Plans can’t be canceled apart from the 7-day return on plans of $100 an hour or less. Standard RIs can be sold on the Reserved Instance Marketplace, within AWS’s conditions.
See the numbers for your own EC2 bill. Enter your monthly on-demand EC2 spend in the RightSpend calculator to see the discount range, the 25% fee and what you keep.
