Amazon EC2 provides purchasing options to enable you to optimize your costs based on your needs.

On-Demand Instances

• Pay, by the second, for the instances that you launch.
• No longer-term commitments or upfront payments are needed.
• You have full control over its lifecycle, you decide when to launch, start, stop, reboot, or terminate it.
• You pay only when your On-Demand Instances are in the running state.
• Can increase or decrease your compute capacity.

Reserved Instances

• Up to 75% savings compared to On-Demand Instance pricing.
• You can purchase a Reserved Instance for a one-year or three-year commitment, with the three-year commitment offering a bigger discount.
• Commitment includes instance type and Region.
• Reserved Instances do not renew automatically; when they expire, you can continue using the EC2 instance without interruption, but you are charged On-Demand rates.
• After you purchase a Reserved Instance, you cannot cancel your purchase. However, you may be able to modify, exchange, or sell your Reserved Instance if your needs change.

Scheduled Reserved Instances

• Purchase instances that are always available on the specified recurring schedule.
• Recur on a daily, weekly, or monthly basis, with a specified start time and duration.
• You pay for the time that the instances are scheduled, even if you do not use them.
• After you purchase a Scheduled Instance, you can't cancel, modify, or resell your purchase.
• You must purchase a Scheduled Reserved Instance minimum for one year.
• The minimum required utilization is 1,200 hours per year.

Spot Instances

• The most cost-efficient instance in AWS. Up to 90% savings compared to On-Demand Instance pricing.
• Request unused EC2 instances, which can reduce your Amazon EC2 costs significantly.
• Instances that can "lose" at any point of time if your max price is less than the current spot price.
• Well-suited for batch jobs, background processing, and optional tasks. Not good for critical jobs.

Dedicated Hosts

• Pay for a physical host.
• Physical server with EC2 instance capacity fully dedicated to your use.
• Full control of the Instance placement.
• Visibility into the underlying socket, the core of the hardware.
• You must purchase a Dedicated Hosts Instance minimum for one year.

Dedicated Instances

• Pay, by the hour, for instances that run on hardware that's dedicated to a single customer.
• May share hardware with other instances from the same AWS account.

Great combo

Reserved Instance for baseline + On-Demand and Spot Instances for scaling.

Resource

• https://aws.amazon.com/ec2/pricing/
• https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/instance-purchasing-options.html

Original post - https://blog.vnoit.com/ec2-instance-purchasing-options