Reserved Instance Savings Calculator
Compare an EC2 Reserved Instance against on-demand: effective hourly rate, discount, term savings and upfront break-even.
Inputs
Zero for an all-upfront RI; the recurring hourly charge for no-upfront and partial-upfront.
Zero for a no-upfront RI. Editable — quotes change with term, family and region.
Monthly Saving vs On-Demand
$255.65
Effective Reserved Rate per Hour
$0.0610
Discount vs On-Demand
36.5%
Saving Over the Whole Term
$3,067.80
Upfront Break-Even
5.6months
On-Demand Cost for the Same Term
$8,409.60
Step by step
Values used
On-demand rate per hour = 0.0960 USD/hour; Reserved hourly rate = 0.0305 USD/hour; Upfront payment per instance = 267 USD; Commitment term = 1-year term; Instances covered = 10 instances
Reserved Instance Savings
effective rate = upfront ÷ (term years × 8760) + reserved hourly rate; break-even months = upfront ÷ ((on-demand − reserved hourly) × 730).
Monthly Saving vs On-Demand
= 255.65
Effective Reserved Rate per Hour
= 0.0610
Discount vs On-Demand
= 36.5
Saving Over the Whole Term
= 3,067.80
Upfront Break-Even
= 5.6 months
On-Demand Cost for the Same Term
= 8,409.60
How it works
An RI is a billing discount, not a reservation of a machine, so the honest comparison amortises any upfront payment across the term's 8760 hours per year and adds the recurring hourly charge. Break-even is the point where accumulated hourly savings repay the upfront, which is why a partial-upfront RI on a workload you might retire in six months can lose money even though its effective rate looks better. Reserved Instances are a one-to-three-year cash commitment that keeps billing whether the instance runs or not, so the break-even month is the real risk metric, not the headline discount.
Formula
Reserved Instance Savings
effective rate = upfront ÷ (term years × 8760) + reserved hourly rate; break-even months = upfront ÷ ((on-demand − reserved hourly) × 730).
- 8760
- Hours in a year, the amortisation base for an RI term
- upfront
- One-off payment amortised across the whole term
- hourly gap
- Per-hour cash saving before the upfront is repaid
Guides that use this calculator
Frequently Asked Questions
How is Reserved Instance Savings calculated?
effective rate = upfront ÷ (term years × 8760) + reserved hourly rate; break-even months = upfront ÷ ((on-demand − reserved hourly) × 730). An RI is a billing discount, not a reservation of a machine, so the honest comparison amortises any upfront payment across the term's 8760 hours per year and adds the recurring hourly charge. Break-even is the point where accumulated hourly savings repay the upfront, which is why a partial-upfront RI on a workload you might retire in six months can lose money even though its effective rate looks better.
Why does Reserved Instance Savings matter?
Reserved Instances are a one-to-three-year cash commitment that keeps billing whether the instance runs or not, so the break-even month is the real risk metric, not the headline discount.
What values do I need to enter?
This calculator takes 5 inputs: On-demand rate per hour, Reserved hourly rate, Upfront payment per instance, Commitment term, Instances covered. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.
Which payment option should I pick?
All-upfront gives the largest discount but the worst flexibility and the longest exposure; no-upfront gives the smallest discount with no cash at risk. Partial-upfront usually sits within a couple of points of all-upfront, which is why it is the common default. Enter your own quoted numbers — the ranking depends on family, region and term.