Definition
AWS Reserved Instance (RI): A 1 or 3 year capacity and billing commitment for an EC2 instance family in a specified region. In exchange, AWS applies a 35 to 72 percent discount against the equivalent on demand rate. RIs are not a separate resource. They are a billing construct that applies automatically to matching usage. Unused RIs can be listed on the AWS Reserved Instance Marketplace for resale. Sits inside the broader AWS EDP commitment structure for enterprise accounts.
Two offering classes exist. Standard RIs lock the instance family and offer the deepest discount. Convertible RIs allow exchange to a different family of equal or greater value during the term, at a 7 to 11 percentage point discount penalty. Three payment options sit underneath: No Upfront (monthly billing), Partial Upfront (50 percent up, balance monthly), and All Upfront (full pay at term start). All Upfront yields the lowest effective rate.
RIs predate Savings Plans and remain the only way to get a guaranteed capacity reservation in a specific Availability Zone, which matters for disaster recovery and database failover. They also remain the dominant commitment vehicle for RDS, ElastiCache, Redshift, and OpenSearch, where Savings Plan equivalents do not yet exist. For pure EC2 compute, most mature accounts have shifted toward Compute Savings Plans for flexibility.
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We benchmark RI coverage, utilization, and discount realization across 240 enterprise AWS accounts. Send the RI inventory and we return optimization intelligence in 48 hours.
Discount benchmark by term and payment
From our 2024 and 2025 sample of enterprise AWS accounts in the 500K to 80M annual spend bracket: 1 year No Upfront Standard RIs ran 28 to 40 percent off on demand, 1 year All Upfront ran 36 to 47 percent, 3 year No Upfront ran 49 to 60 percent, and 3 year All Upfront reached 56 to 72 percent. Convertible RIs ran 7 to 11 points below Standard at each tier. Methodology: spot checks of public AWS pricing pages cross referenced against actual customer invoices under NDA.
For the surrounding vocabulary, see the AWS Savings Plan definition, the spot instance definition, the consumption based pricing definition, and the glossary hub. For full AWS benchmarks, see the cloud infrastructure benchmarks.
Frequently asked questions
What is an AWS Reserved Instance?
An AWS Reserved Instance is a 1 or 3 year EC2 capacity commitment that cuts the on demand rate by 35 to 72 percent. Buyers pre commit to a specific instance family, region, and term in exchange for the discount.
How much does an RI save?
Across 240 enterprise AWS accounts benchmarked in 2024 and 2025, 1 year No Upfront RIs ran 28 to 40 percent off on demand, while 3 year All Upfront RIs ran 56 to 72 percent. Standard RIs out save Convertible RIs by 7 to 11 percentage points.
RI versus Savings Plan, which should I buy?
Savings Plans give flexibility across instance family and region for similar discount, which suits dynamic workloads. RIs still win for steady state databases and capacity reservation needs. Most mature accounts run a hybrid portfolio.
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