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When purchasing an EC2 saving plan, we have an option to choose price commitment per hour (minimum $0.001). If the price input is 0.001 and all upfront, the price will be $8.76. If the price input is 0.005, the upfront cost will be $43.80.

And that just a payment to secure the price. We still have to pay the hourly discounted price when we use ec2.

I am wondering what's the point of inputting the price and pay upfront if we are going to get discounted for whatever the price we inputted anyway?

manh.vu
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1 Answers1

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You still pay your hourly usage, but you get a more discounted price when you pay either partial/all upfront; so the discount is directly proportional with the amount of upfront fee; The more you pay, the bigger the discount.

Savings Plans is available in 3 different payment options. The No Upfront option does not require any upfront payment, and your commitment will be charged purely on a monthly basis. The Partial Upfront option offers lower prices on Savings Plans. With this option you be charged at least half of your commitment upfront and the remaining will be charged on a monthly basis. With the All Upfront option, you will receive the lowest prices and your entire commitment will be charged in one payment.

Official doc.

For example, t3.large in us-east-1 saving plan rate is

  • $0.06 (no upfront)
  • $0.0571 (partial upfront)
  • $0.056 (all upfront)

AWS Cost Estimator

Abraam Magued
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  • In short, I pay in advanced in exchange for the discount? Will the upfront payment got deducted when I pay the bill for the monthly use at the end of the month? – manh.vu Jun 09 '23 at 07:33
  • You get a discounted rate. Just edited my answer with detailed figures about discounts. Not sure about technicalities of payments, but it seems you pay the half upfront, and the rest is deducted on monthly basis with the discounted rate. – Abraam Magued Jun 09 '23 at 08:10