Savings Plans can be purchased in any account within an AWS Organization/Consolidated Billing family. By default, the benefit provided by Savings Plans is applicable to usage across all accounts within an AWS Organization/consolidated billing family. However you can also choose to restrict the benefit of Savings Plans to only the account that purchased them.


If an account has a traditional reserved instance (RI), then the AWS organization/consolidated billing family will apply the RI benefits first then the Savings Plan benefits.


Refer to this link with FAQs:


https://aws.amazon.com/savingsplans/faq/



AWS Purchase Recommendations


The Savings Plan options are:

  • Plan Types:  Compute, EC2
  • Saving Plan Terms: 1-year and 3-year
  • Payment options: All upfront, Partial upfront, No upfront



Types of AWS Savings Plans and how they work

Here’s how Savings Plans work:

  • Every instance type has an On-Demand rate and a Savings Plan rate (these are the same as, or very similar to, Reservation rates).
  • Customers can commit to a certain spend per hour, and they will get a discount on all compute usage up to that limit; afterwards they get billed On-Demand rates.
  • The Savings Plan commitment is assessed on an hourly basis and AWS will apply the discount to the area with the deepest discount.


Here’s a quick example to illustrate the points above: You purchase a $10/hr All Upfront Savings Plan for 1 year, ($10/hr * 24 * 365 = $87,600). If we assume the Savings Plan has a 66% discount, the $10/hr commitment would actually cover you for up to $30 of On-Demand usage per hour. Any usage above that will be charged at the On-Demand price. For EC2 Instance Type Savings Plan, all spend within that instance family (M5, T3, etc) within the specified region will be discounted up to the hourly commitment. This allows customers to easily change instance sizes within the family and have the discounted rate apply.


AWS has two different types of Savings Plans with different discount levels and options. Here’s a quick comparison:



Compute Savings PlansEC2 Instance Savings Plans
Discount (compared to on-demand)Up to 66^Up to 72%
Flexible Across...Region, Family, OS, TenancySize, OS, Tenancy
Applies to....EC2 or FargateEC2