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AWS EC2 Reserved Instances for Beginners

Updated: Apr 29, 2022


When you create an EC2 instance, you probably use an on-demand instance that is charged on a pay-as-you-go basis, but when researching the pricing structure of AWS instances, you might be bumped into this sentence.

72% OFF is a big eye-catcher, isn't it? The pricing system called "Reserved Instance" provided by AWS is quite affordable as shown above if the conditions are met. However, it might be a bit confusing and tiring to read the documents to understand the pricing and what it actually is. In that case, this article is for you to grasp the AWS EC2 Reserved Instances.

*Although you can use reserved instances with other services such as RDS, this article will focus on EC2 reserved instances as an introductory guide.


What is a Reserved Instance?

A reserved instance can be described as a subscription for an instance. It is a purchasing system that you can get a discount if you pay for a year's worth at once.

Please note that it is a good deal if you keep the instance up all the time, but it isn't worth it if you frequently stop the instance. You wouldn't buy a monthly pass when you only take the train once in a while, would you? So it is important to make sure how you wanna operate and maintain your instances before you apply for it.

Furthermore, there are many features that you should know about when using this service, so check the below contents that are some of the most notable ones below.


Different Class Types

There are two class types of Reserved Instance. You choose the one that is more suitable for your situation.


  • Low price (This is the one that can be up to 72% off compared to the on-demand option)

  • Cannot be changed the instance type after applying it

  • You can sell it in the marketplace


  • More expensive than standard (up to 54% off compared to the on-demand option)

  • You can change the instance type if its price is higher than the type you purchased

  • Can't sell in the marketplace


How To Purchase And Apply

When purchasing a reserved instance, you will need to decide the following items before purchasing.

  • Platform (Linux/Unix, Windows, Red Hat Enterprise Linux, etc.)

  • Region or availability zone

  • Tenancy (how the server is rented; shared with others as default, or occupied for dedicated)

  • Instance type (t2.micro, m4.large, etc.)

  • Contract period (1 year or 3 years)

  • Payment method (choose from full prepayment, partial prepayment, or no prepayment. If you don't pay in advance, you pay the remaining amount every month.)

Also, you should note that there is a quirk in the way the instance is applied which you need to be careful of. Reserved instances are not purchased by tying them to a specific instance. Rather, it is automatically applied when a matching instance exists after the purchase.

However, once you made a purchase, you will be charged even if there is no instance that matches your requirements, or even if the instance is not running. Also please note that the instances do not apply to different regions.


In this article, I have only explained some of the basics, but I hope you were able to grasp the outline of the reserved instance.

An AWS EC2 Reserved Instance is very economical when you keep the same instance running for a long time, so don't hesitate to make good use of it to reduce costs!

This blog post is translated from a blog post written by Wataru Takeda on our Japanese website Beyond Co..

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