Cloud cost glossary

Savings Plan

A Savings Plan is an AWS commitment to a steady hourly dollar amount of compute usage for 1 or 3 years, giving reserved-level discounts with more flexibility than classic reserved instances.

Instead of committing to a specific instance type, you commit to spend (for example $10/hour of compute) and automatically receive the discounted rate across matching usage. Compute Savings Plans apply broadly across instance families, sizes, regions, and even Fargate and Lambda; EC2 Instance Savings Plans are narrower but discount more.

The discount scales with term length and upfront payment, reaching roughly 66–72% at 3-year, all-upfront.

Related terms

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Part of the SpendArk cloud cost & FinOps glossary.