How To Reserve EC2 Instances

In this blog post , We will learn to Reserve EC2 Instances using AWS console.

If the resource utilization by the On-demand EC2 instances are predictable , Amazon EC2 Reserved instances allows to make capacity reservations for the On-demand instances.

By reserving instances , We can save up to 75% when compared to On- demand prices.

What Is Reserved Instances?

Amazon Reserved Instance (RI) is a billing discount that allows us to save on the Amazon EC2 usage costs.

When you purchase a Reserved Instance , you can set attributes such as platform , Instance type , Availability zone , Region , Tenancy.

Any existing / running on-demand instances matching the selected attribute are charged at the discounted Reserved instance price.

Reserved instances acts as an automatic discount on new or existing On-demand instances.

Reserved Instance Pricing Is Calculated In 3 Key Attributes:

Instance Attribute – Includes Instance types (m5.xlarge) , Availability zone (ap-southeast-1a) , Platform (Linux) and Region (Singapore).

Term commitment – RI’s can be purchased for either 1 year or 3 year commitment.The 3 year commitment offers higher discount.

Payment Option – There are 3 payment options available such as No Upfront , Partial Upfront , Full Upfront.

The more you pay Upfront , The more you Save.

If you go with No-Upfront , We will be paying Monthly instalments.

Reserved Instances are sold by AWS and Third Party Sellers

Payment Options

The following payment options are available for reserved instances.

No Upfront : No upfront payment is required. We are billed a discounted hourly rate for every hour within the term.

Partial Upfront : A portion of cost must be paid upfront and the remaining are billed at a discounted hourly rate.

All Upfront : Full payment is made while purchasing reserved instance for the term.

Why Reserved Instances?

Save Money and Maintain Flexibility

Amazon Reserved Instances provides significant discount up to 72% compared to On-demand instance pricing.

Even we have the flexibility to modify instance families , OS types , tenancies while benefitting from RI pricing when you use Convertible RI’s.

Reserve Capacity

Reserved Instances can provide a capacity reservation , Offering additional confidence in your ability to launch the number of instances you have reserved when you need them.

Term Commitment

We can purchase a Reserved instance for a one-year or 3 year commitment.

3 year commitment offers higher discount rates.

One year : You can reserved On-demand EC2 instances for 365 days.

Three year : The On-demand instances are reserved for 1095 days.

Reserved instances are not auto-renewable.We have to manually renew it after the reservation period is over.

But this won’t interrupt existing EC2 instances , But we will be charged for On-demand hourly rates.

Types Of EC2 RI’s

The following are the Offering classes and depending on the offering class we can modify or exchange the reserved instances.

Standard RIs : The most significant discount up to 72% off On-demand and also you can modify Instance size , Availability zone , Platform.

Convertible RIs : Provides a discount upto 54% off On-demand and We have the option to change the Reserved Instance Attributes such as Instance Types.

Scheduled RIs : The instances are available to launch within the time window you reserve.

Attached the detailed billing report for the Instance with Instance type (t3.2xlarge) and the comparision between On-demand and Reserved Instance Pricing.

Hope you have got some ideas about Reserved Instances and Its pricing.

Reserved Instances Limits

There are certain limits when comes to reserving instances per month.

  • For each Region , 20 Regional reserved Instances can be purchased per month.
  • And 20 Zonal Reserved Instances for each availability zones can be purchased per month.

Reserved Instance Tenancy

If the Tenancy is Default , The Instances runs on Shared hardware , Which means If you’re running instances on Shared hardware tenancy They You should purchase reserved instance with the Default tenancy.

If the Tenancy is Dedicated , The instance runs on single-tenant hardware , Which means If you’re running On-demand instances on Dedicated hardware (dedicated instances) then You should purchase dedicated reserved instances.

Tenancy cannot be changed from Default to Dedicated after It is purchased.

Purchasing Reserved Instances

Lets say you’re running an On-demand EC2 Instance with the Instance type t2.xlarge.

And you’re sure that you won’t be making any changes to that instance in terms of Instance size for another 1 year.

So lets go ahead and reserve this Instance So that we can save costs.

To reserve the EC2 instance , Login to EC2 Console.

In the navigation pane , Under Instances , Choose Reserved Instances

Click Purchase Reserved Instances , Choose the Platform

For Tenancy , Depending on the On-demand instance tenancy , Choose it (As explained above)

For Offering Class , Choose the Standard or Convertible class (Explained above)

For Instance type , Choose the Instance type of the On-demand instance that you’re currently running.

The instance type can differ , But it should exactly match the instance family. Eg: t2.

For Term , Choose the period (term) for which you want to reserve the instances.

For Payment option , Choose the payment option as per your requirement.

Once you have chosen all the details , Click Search

You will find the reserved instances as per the specification you have provided.

You can see that the Seller of the reserved instance is AWS itself.

You can find the hourly rate for the On-demand instance after they reserved.

You can find a option called Desired Quantity , It means How many reserved instances of the same instance type you wish to purchase.

Lets Understand this in detail.

For example : If you running m5.xlarge (4 vCPU & 16 GB RAM) On-demand Instance and you wish to reserve this instance.

In this case You can directly purchase one m5.xlarge reserved instance Or you can purchase 2 m5.large (4 vCPU’s & 16 GB RAM) instances.

Hope you understand the capacity reservation.The reserved instance you are purchasing choose match the resources of the currently running instances of Same instance type.

Once done. Click Add to Cart

and then click View Cart

You can review the pricing details and You can edit If you want and then Click Order to purchase the reserved instance.

The Order which we have done is Regional based purchasing of Reserved Instances.

If you wish to purchase Reserved instance by Availability zones , Click Purchase Reserved Instances

In the Top right corner , Check Only show offerings that reserve capacity

For Availability zone , Form the drop down menu , Choose the availability zone where your current On-demand instances are running.

Other options for purchasing Reserved instances are the same.

Once the reserved instances are purchased , The Discounted pricing for the On-demand instances that match the reserved instance type will apply immediately.

You can find the details of the reserved instances from the Reserved Instances page.

It shows the instance type that is purchased , Is it Regional or Zonal and the Instance count details.

It also provides details such as Start Date , End date , Term etc.

How To Modify Reserved EC2 Instances

Sometimes the technical or Instance requirements change , and you are in the need of changing or Upgrading the instance parameters (such as Instance types).

If you have purchased convertible reserved EC2 instances You can make modifications to the reserved EC2 instances.

Lets go ahead and see How we can modify the purchased reserved EC2 instances as per the needs.

Login to EC2 Management console , In the navigation pane, Choose Reserved Instances

Choose the reserved instance for which you want to make changes.

Then Under Actions , Choose Modify Reserved Instances

You can change the Scope and switch between the Availability zones and also you can change the instance Type within the same Instance family.

Once you specify all the required changes , Click Continue and then choose Submit Modifications

After making the changes , The Older reserved EC2 instances will be retired and the new reserved instances will be activated on the AWS account.

If you wish to change the Platform of the reserved EC2 instances , Select the reserved instance , Under Actions , Choose Exchange Reserved Instance (Available only for Convertible Offering Class).

And you can modify parameters such as Instance types , Scope , Platform etc.

Once done , Click Review and then Exchange.


We have learnt about Reserving EC2 instances to save costs.

Thanks for reading.Hope you find it helpful.

Please do check out my other blogs.