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Amazon Elastic Compute Cloud
User Guide for Linux Instances

Billing Benefits and Payment Options

You can purchase Reserved Instances with a billing and capacity benefit by specifying an Availability Zone, or with a regional billing benefit by purchasing a Reserved Instance for a region.

The billing benefit is automatically applied to matching running instances in that Availability Zone or region. You can also purchase Reserved Instances and then launch On-Demand instances with matching specifications—the billing benefit is automatically applied to those instances.

When you purchase a Reserved Instance for a specific Availability Zone, by default EC2 will create a capacity reservation in that Availability Zone matching the configuration of your Reserved Instance. Your capacity reservation will be used by the first instance launched from the account that owns the Reserved Instance with a matching configuration.

Choosing a Reserved Instance Payment Option

There are three payment options for Reserved Instances:

  • No Upfront—You are billed a discounted hourly rate for every hour within the term, regardless of usage, and no upfront payment is required. This option is only available as a 1-year reservation for Standard Reserved Instances and a 3-year reservation for Convertible Reserved Instances.

    Note

    No Upfront Reserved Instances are based on a contractual obligation to pay monthly for the entire term of the reservation. For this reason, a successful billing history is required before an account is eligible to purchase No Upfront Reserved Instances.

  • Partial Upfront—A portion of the cost must be paid upfront and the remaining hours in the term are billed at a discounted hourly rate, regardless of usage.

  • All Upfront—Full payment is made at the start of the term, with no other costs incurred for the remainder of the term regardless of the number of hours used.

Understanding hourly billing

Reserved Instances are billed for every clock-hour during the term that you select, regardless of whether an instance is running or not. It's important to understand the difference between instance states and how these impact billing hours. For more information, see Instance Lifecycle.

Reserved Instance billing benefits only apply to one instance-hour per clock-hour. An instance-hour begins when an instance is started and continues for 60 minutes or until the instance is stopped or terminated—whichever happens first. A clock-hour is defined as the standard 24-hour clock that runs from midnight to midnight, and is divided into 24 hours (for example, 1:00:00 to 1:59:59 is one clock-hour).

A new instance-hour begins after an instance has run for 60 continuous minutes, or if an instance is stopped and then started. Rebooting an instance does not reset the running instance-hour.

For example, if an instance is stopped and then started again during a clock-hour and continues running for two more clock-hours, the first instance-hour (before the restart) is charged at the discounted Reserved Instance rate. The next instance-hour (after restart) is charged at the On-Demand rate and the next two instance-hours are charged at the discounted Reserved Instance rate.

The Reserved Instance Utilization Reports section includes sample reports which illustrate the savings against running On-Demand instances. The Reserved Instances FAQ includes a sample list value calculation.

How to apply a Reserved Instance

Reserved Instances apply to usage in the same manner, irrespective of the type of Reserved Instance you use (Standard or Convertible).

To apply a Reserved Instance to a running instance, you can either modify an existing Reserved Instance or purchase a Reserved Instance by selecting the Availability Zone (such as us-east-1b) or region, instance type (such as m3.large), platform (such as Amazon Linux VPC), and tenancy (such as default) to match the configuration of the running instance.

Below is an example scenario where a customer is running the following On-Demand instances in account A:

  • 4 x m3.large Linux, default tenancy instances in Availability Zone us-east-1a

  • 2 x c4.xlarge Linux, default tenancy instances in Availability Zone us-east-1b

  • 2 x c4.xlarge Linux, default tenancy instances in Availability Zone us-east-1c

The customer then purchases the following Reserved Instances in account A:

  • 4 x m3.large Linux, default tenancy Reserved Instances in Availability Zone us-east-1a (capacity is reserved)

  • 4 x c4.xlarge Linux, default tenancy Reserved Instances in us-east-1

  • 1 x d2.xlarge Linux, default tenancy Reserved Instances in us-east-1c

The Reserved Instance benefits are applied in the following way:

  • The discount and capacity reservation of the four m3.large Reserved Instances will be used by the four m3.large instances because the attributes (instance size, region, platform, tenancy) between them match.

  • The discount of the four c4.xlarge Reserved Instances will be utilized by the 4 c4.xlarge instances because the attributes (instance size, region, platform, tenancy) between them match even though two different Availability Zones (us-east-1b and us-east-1c) are being used.

  • As there are no d2.xlarge instances matching the configuration of the d2.xlarge Reserved Instance, the capacity reservation will be held for future use and the discount will not apply to usage.

Understanding Reserved Instance Discount Pricing Tiers

When your account qualifies for a discount pricing tier, it automatically receives discounts on upfront and hourly usage fees for all Reserved Instance purchases that you make within that tier level from that point on. To qualify for a discount, the list value of your Reserved Instances in the region must be $500,000 USD or more.

Note

Discount pricing tiers are not currently applicable to Convertible Reserved Instance purchases.

Calculating Reserved Instance Pricing Discounts

You can determine the pricing tier for your account by calculating the list value for all of your Reserved Instances in a region. Multiply the hourly recurring price for each reservation by the hours left in each term and add the undiscounted upfront price (known as the fixed price) listed on the AWS marketing website at the time of purchase. Because the list value is based on undiscounted (public) pricing, it is not affected if you qualify for a volume discount or if the price drops after you buy your Reserved Instances.

List value = fixed price + (undiscounted recurring hourly price * hours in term)

To view the fixed price values for Reserved Instances using the AWS Management Console

  1. Open the Amazon EC2 console at https://console.aws.amazon.com/ec2/.

  2. Turn on the display of the Fixed Price column by choosing Show/Hide in the top right corner.

To view the fixed price values for Reserved Instances using the command line

Consolidated Billing for Pricing Tiers

A consolidated billing account aggregates the list value of member accounts within a region. When the list value of all active Reserved Instances for the consolidated billing account reaches a discount pricing tier, any Reserved Instances purchased after this point by any member of the consolidated billing account are charged at the discounted rate (as long as the list value for that consolidated account stays above the discount pricing tier threshold). For more information, see Reserved Instances and Consolidated Billing.

Buying with a Discount Tier

When you buy Reserved Instances, Amazon EC2 automatically applies any discounts to the part of your purchase that falls within a discount pricing tier. You don't need to do anything differently, and you can buy using any of the Amazon EC2 tools. For more information, see Buying in the Reserved Instance Marketplace.

Note

Reserved Instance purchases are the only purchases that determine your discount pricing tiers, and the discounts apply only to Amazon EC2 Reserved Instance purchases.

After the list value of your active Reserved Instances in a region crosses into a discount pricing tier, any future purchase of Reserved Instances in that region are charged at a discounted rate. If a single purchase of Reserved Instances in a region takes you over the threshold of a discount tier, then the portion of the purchase that is above the price threshold is charged at the discounted rate. For more information about temporary Reserved Instance IDs created during the purchase process, see Crossing Pricing Tiers.

If your list value falls below the price point for that discount pricing tier—for example, if some of your Reserved Instances expire—future purchases of Reserved Instances in the region are not discounted. However, you continue to get the discount applied against any Reserved Instances that were originally purchased within the discount pricing tier.

When you buy Reserved Instances, one of four possible scenarios occurs:

  • No discount—Your purchase within a region is still below the discount threshold.

  • Partial discount—Your purchase within a region crosses the threshold of the first discount tier. No discount is applied to one or more reservations and the discounted rate is applied to the remaining reservations.

  • Full discount—Your entire purchase within a region falls within one discount tier and is discounted appropriately.

  • Two discount rates—Your purchase within a region crosses from a lower discount tier to a higher discount tier. You are charged two different rates: one or more reservation at the lower discounted rate, and the remaining reservations at the higher discounted rate.

Current Pricing Tier Limits

The following limitations currently apply to Reserved Instance pricing tiers:

  • Reserved Instance pricing tiers and related discounts apply only to purchases of Amazon EC2 Reserved Instances.

  • Reserved Instance pricing tiers do not apply to Reserved Instances for Windows with SQL Server Standard or Windows with SQL Server Web.

  • Reserved Instances purchased as part of a tiered discount cannot be sold in the Reserved Instance Marketplace. For more information, see the Reserved Instance Marketplace page.

Crossing Pricing Tiers

If your purchase crosses into a discounted pricing tier, you see multiple entries for that purchase: one for that part of the purchase charged at the regular price, and another for that part of the purchase charged at the applicable discounted rate.

The Reserved Instance service generates several Reserved Instance IDs because your purchase crossed from an undiscounted tier, or from one discounted tier to another. There is an ID for each set of reservations in a tier. Consequently, the ID returned by your purchase CLI command or API action will be different from the actual ID of the new Reserved Instances.

Reserved Instances and Consolidated Billing

The pricing benefits of Reserved Instances are shared when the purchasing account is part of a set of accounts billed under one consolidated billing payer account. The hourly usage across all sub-accounts is aggregated in the payer account every month. This is typically useful for companies in which there are different functional teams or groups; then, the normal Reserved Instance logic is applied to calculate the bill. For more information, see Consolidated Billing in AWS Billing and Cost Management User Guide.

For more information about how the discounts of the Reserved Instance pricing tiers apply to consolidated billing accounts, see Amazon EC2 Reserved Instances.

Reading Your Statement (Invoice)

You can find out about the charges and fees to your account by viewing the Billing & Cost Management page in the AWS Management Console. Choose the arrow beside your account name to access it.

  • The Dashboard page displays charges against your account—such as upfront and one-time fees, and recurring charges. You can get both a summary and detailed list of your charges.

  • The upfront charges from your purchase of third-party Reserved Instances in the Reserved Instance Marketplace are listed in the AWS Marketplace Charges section, with the name of the seller displayed beside it. All recurring or usage charges for these Reserved Instances are listed in the AWS Service Charges section.

  • The Detail section contains information about the Reserved Instance—such as the Availability Zone, instance type, cost, and number of instances.

You can view the charges online, and you can also download a PDF rendering of the charge information.