How do I use reserved EC2 instances?

To convert an existing EC2 instance to a reserved instance, you have to do nothing. Reserved instances is not a technical term, it is purely an accounting term and thus, only affects your AWS bill. When you purchase a reserved instance, the AWS accounting algorithm will automatically apply the reserved instance to any single applicable EC2 instance. Criteria include:

  • Region and availability zone
  • Instance type (micro, small, large, etc.)
  • The instance is in a running state
  • The instance does not currently have a reserved instance applied to it already

There’s nothing you need to do other than purchase the reserved instance. Everything after that is automatic. In addition, reserved instances are not “locked” to a particular EC2 instance. 

Example

You launch an instance and purchase a reserved instance. This is your only EC2 instance. Assuming the instance matches the criteria of the reserved instance, you’ll automatically benefit from the reserved instance.

If you launched a second applicable instance, then you will benefit from the reserved instance once, and pay standard on-demand pricing for the other. You don’t know which one is which, but it really does not matter.

At this point, you stop the original instance. The reserved instance will continue to be applied to the second instance because it is now applicable.

Purchasing a Reserved Instance:

When you purchase a Reserved Instance, you are given the choice of the following:

  1. Upfront – Paying the entire yearly cost of the Reserved Instance upfront. If you do this, there won’t be any more costs for this Reserved Instance for the next 12 or 36 months.
  2. Partial Upfront – Paying half the yearly cost up-front. The remainder is split evenly over the following 12 or 36 months.
  3. On-Demand – Paying no upfront fee.

In all 3 choices above, you are committing to paying for the entire yearly cost. Even if you choose option #2 or #3 and never run another EC2 instance, you will be charged for your Reserved Instance purchase over the next 12 months.