AWS Compute Savings Plans: 7 Powerful Ways to Maximize Cloud Savings in 2025

With cloud adoption on the rise, managing and optimizing costs is an important task for individuals and organizations alike. One of the most impactful ways to reduce your AWS cloud bill is through AWS Savings Plans, with Compute Savings Plans offering the largest discounts across many compute services in exchange for a commitment to a certain amount of usage (measured in $/hour) over a 1- or 3-year term.

This guide will cover what Compute Savings Plans are, how they work, how and when to purchase them, and tips on how to maximize their value. If you are a DevOps engineer, cloud architect, or finance stakeholder, this blog will help illustrate how to make better financial choices in the cloud.

What Are AWS Compute Savings Plans?

Compute Savings Plans are a flexible pricing model that allows AWS customers to save up to 66% off of on-demand instance pricing. In return, customers agree to commit to a dollar amount of compute usage per hour for a specified time frame (1- or 3-year term).

Compute Savings Plans are similar to Reserved Instances (RIs) but are not linked to a specific instance family, operating system, or region. Any applicable service usage will be applied automatically, and the associated cost savings will automatically reflect over time. Applicable service utilizations include :

• Amazon EC2 (any instance family, size, OS, or region)
• AWS Fargate
• AWS Lambda

The flexibility of Compute Savings Plans makes it one of the most flexible cost-saving options available through AWS.

Types of AWS Savings Plans

AWS offers two types of Savings Plans:

1. Compute Savings Plans
   • Flexibility: Is applied to any EC2 instance, regardless of family, region, OS, or tenancy.
   • Who it’s best for: variable workloads, containerized workloads, serverless functions, or ways of working that are constantly evolving.
     
2. EC2 Instance Savings Plans
   • Less flexibility: Is applied to a specific instance family but within a region.
   • Who it’s best for: Capacity that is steady state with a predictable instance usage.

Reasons to Choose Compute Savings Plans?

1. Flexibility

You have flexibility and won’t be locked into an instance type in a region. Your savings will continue to be applied if your architecture changes.

2. Flexibility for Modern Workloads

Compute Savings Plans also extend discounts to AWS Fargate and Lambda. These services are popular for both microservices and event-driven architecture and are gaining mindshare among developers and professionals alike.

3. Big Cost Saving

Depending on your term and payment option, you can save up to 66% versus on-demand prices.

4. Automatic Application of Discounts

Your discounts get applied automatically against your highest eligible usage, so you’re getting the discount for the maximum amount possible.

How Do Compute Savings Plans Work?

When you purchase a Compute Savings Plan, you are committing to use a specific dollar amount per hour of computer usage commitment. For example:

$0.50/hour for a 1-year term.

If you exceed this commitment amount, that excess compute will be charged using on-demand rates. If you make a commitment but use less than the committed amount, you will still pay the committed amount.

AWS applies your savings according to the following hierarchy:

1. EC2 On-Demand Instances
2. Fargate usage
3. Lambda duration usage

Step-by-Step: Buying Compute Savings Plans

Step 1: Open the AWS Savings Plans Console

Simply launch the Savings Plans Console.

Step 2: Select “Purchase Savings Plan.”

Hit Purchase Savings Plan on the left-hand side bar.

Step 3: Select Your Plan Type

Choose a Compute Savings Plan for the most flexibility (this will let you use CDG, EC2, Lambda, etc.)

Step 4: Set Your Commitment

Term: 1 year or 3 years

Payment Option:

• All Upfront (Max Savings)
• Partially Upfront
• No Upfront (recurring monthly payments)

Hourly Commitment: Use the AWS Cost Explorer tool to help identify your average hourly spend.

Step 5: Review and Purchase

• Review your commitment and terms.
• AWS calculates estimated monthly savings.
• Hit Submit and Purchase.

Tracking and Managing Your Savings Plan

1. AWS Cost Explorer

Use AWS Cost Explorer to visualize your usage and the way in which the Savings Plan is applied.

2. AWS Budgets

You can set alerts when the usage exceeds your commitment or goes over the budget limits.

3. AWS Trusted Advisor

You will receive tailored, personalized recommendations on potential savings across the AWS stack.

Best practices for using Compute Savings Plans

✅ Begin Small

If you’re inexperienced (undergoing the first time) with Savings Plans, secure a small hourly commitment, then scale up.

✅ Use Cost Explorer recommendations

AWS will analyze your previous usage to determine the ideal Savings Plan commitment for your account.

✅ Review Regularly

Ensure that your actual usage commitments match your commitments to not create unnecessary waste.

✅ Combine with Reserved Instances

You can still utilize Reserved Instances (RI) for predictable workloads and Compute Savings Plans (SP) for variable workloads.

✅ Prepare for future expansion

Do not overcommit and build a buffer for potential spikes in usage and service variances.

Pros and Cons

Pros

• All-around flexibility with service and regions.
• Applies to EC2, Fargate, and Lambda.
• Significant savings.
• Simple to manage and monitor.

Cons

• Requires upfront commitment.
• Potential for overcommitting.
• Not as deep savings compared to EC2 Instance Savings Plans for predictability.

Real-World Example

Let’s say your company operates a web application in us-east-1 with:

• EC2 t3.medium
• ECS on Fargate for background jobs.
• Lambda for scheduled tasks.

On average, the compute cost is about $1.50/hour. You can purchase a one-year Compute Savings Plan (CSP) at $1.00/hour with partial upfront payment, and you essentially would save for that committed usage.

• ~35-50% on that committed usage

You can continue to pay on demand for the other $0.50/hour or add more CSPs later.

Frequently Asked Questions on AWS Compute Savings Plans

Q1: What happens if I use more than my amount?

You will pay standard on-demand rates for the usage over your amount.

Q2: Can I cancel a Compute Savings Plan?

No, Savings Plans are a commitment for the term of the plan. After purchasing, you cannot cancel a savings plan.

Q3: Can I make a change to my commitment after I purchase?

No, but you can always buy more Savings Plans to increase the committed usage.

Q4: How are Savings Plans billed?

You will either be billed upfront or monthly based on the payment option selected. The discount is then applied as a discount on the bill.

Q5: Is the Compute Savings Plan better than Reserved Instances (RI)?

It depends.

• If you need flexibility, compute SPs.
• If you want the deepest discounts on specific instances – RIs
  

Q6: Can I transfer my savings plan to another account?

Not directly, but if you are using AWS Organizations and consolidated billing, the plan applies to the accounts.

Q7: Can Compute Savings Plans be used with Auto Scaling?

Yes! Savings Plans apply to Auto Scaling groups as long as your compute usage matches your commitment.

Conclusion

AWS Compute Savings Plans provide the ability to save on your cloud costs while offering more flexibility than Reserved Instances. Savings Plans are an ideal solution for modern and ever-evolving cloud environments, allowing for the opportunity to commit to 12 or 36 months for discounts on eligible EC2, Fargate, and Lambda services.

Once you have a firm understanding of your usage patterns, use the AWS usage tools and start with a commitment you can manage; you can make thoughtful and economical decisions that will scale with your business.

Compute Savings Plans are ideal if you are new to AWS considering your first cloud workloads, or are currently running production workloads and are committing to two or more years of cloud savings.

Want to save? Head to the AWS Savings Plans Console  or CostQ to start exploring your savings potential today.