Reserved Instance

A Reserved Instance is a billing construct: you commit to a specific amount of compute (a family, size, term, and often a region) for one or three years, and receive a discount — commonly 30-60% off on-demand rates — in exchange for the commitment.

Two models exist. Traditional reservations bind you to an instance size (sometimes with size flexibility within a family), while newer "spend-based" or "compute savings plans" discount any usage up to a committed hourly dollar amount, trading a deeper discount for less specificity.

The discipline that matters is matching commitments to a baseline: reserve the capacity you will run around the clock, and leave peak or spiky demand on on-demand or spot pricing. Over-commitment is the classic reserved-instance mistake — the discount applies whether or not you use the capacity.