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07. AWS Savings Plans

AWS Savings Plans offer a flexible way to save on AWS compute usage by committing to a specific spend ($/hour) for 1 or 3 years, instead of committing to specific instance types.

You receive discounts compared to On-Demand pricing while maintaining flexibility in how you use AWS compute resources.

Plan TypeMax DiscountFlexibilityApplies To
EC2 Instance Savings PlanUp to 72%LimitedCommit To EC2 instances (same family & region)
Compute Savings PlanUp to 66%HighEC2, Fargate, Lambda(Not limited by family)
SageMaker (ML) Savings Plan~28%ModerateSageMaker Notebooks, Training, Endpoints

How It Works​

  • Commit to a $ amount per hour (e.g., $10/hour) for a 1-year or 3-year term.
  • Choose payment options:
    • All Upfront → Highest discount
    • Partial Upfront → Medium discount
    • No Upfront → Lowest discount
  • AWS automatically applies the discount to your eligible compute usage.

Types of Savings Plans​

A. EC2 Instance Savings Plan​

  • Up to 72% discount.
  • Commitment applies to specific instance families (e.g., C5) in a specific region.
  • Covers:
    • Any size within the family (c5.large, c5.xlarge, etc.)
    • Any Availability Zone
    • Any OS (Linux, Windows)
    • Any tenancy (Shared, Dedicated)

B. Compute Savings Plan​

  • Up to 66% discount.
  • Most flexible option — no instance family or region restrictions.
  • Applies to:
    • EC2 (any type, region, OS, tenancy)
    • AWS Fargate
    • AWS Lambda
  • Ideal if you want to move workloads across services or regions.

C. SageMaker (Machine Learning) Savings Plan​

  • Applies to Amazon SageMaker workloads.
  • Includes Notebook instances, Training, and Endpoints.
  • Discounts vary (~28%) depending on usage and term.
  • Works similarly to Compute Plans — commit to a spend per hour.

How to Purchase a Savings Plan​

  1. Go to AWS Management Console → Cost Explorer → Savings Plans
  2. Select Plan Type:
    • Compute
    • EC2 Instance
    • SageMaker
  3. Choose:
    • Term length: 1 year or 3 years
    • Payment option: All / Partial / No Upfront
    • Hourly commitment: e.g., $500/hour
  4. Review estimated:
    • Upfront cost
    • Monthly payments
    • Total cost over term
  5. Click Add to Cart → Purchase.

5. Example Estimations​

  • a1.large instance → 31% discount over On-Demand (via Compute Savings Plan)
  • ml.t3.large Notebook (SageMaker) → 28% discount

6. Best Practices​

✅ Use Compute Savings Plan for flexibility (EC2, Fargate, Lambda).
✅ Use EC2 Instance Savings Plan for predictable, static EC2 workloads.
✅ Use SageMaker Savings Plan for consistent ML workloads.
✅ Use AWS Cost Explorer recommendations before purchasing.
✅ Combine with Cost Anomaly Detection or Budgets for tracking savings.