Enter the On-Demand rate, the reservation's upfront payment and hourly rate, the term and the usage you expect. The calculator shows the cost comparison over the term, the cash break-even month and the usage at which the reservation stops costing more than On-Demand.
This tool compares the numbers you enter. It does not know your workload or your options, and it does not recommend a purchase.
For the same instance type, Region, platform and tenancy as the reservation. Take it from the AWS pricing page or your own bill.
Enter 0 if the reservation has no upfront payment. A blank field is not treated as 0.
The recurring hourly charge for the reservation. Enter 0 for All Upfront. It is billed for every hour of the term.
AWS offers one-year and three-year terms.
The share of hours the instance would actually run if you stayed On-Demand. The reservation is billed for every hour regardless of use.
h = 730 hours per month (365 days x 24 hours / 12 months)On-Demand cost per month at your usage: O = On-Demand rate x h x usage%Commitment cost per month: K = commitment rate x h; commitment cash paid by month m = upfront + K x mOver the term T (months): commitment total C = upfront + K x T; On-Demand total D = O x TCost comparison: D - C (positive = the commitment costs less over the term; negative = it costs more)Break-even usage: u* = C / (On-Demand rate x h x T) (the usage at which D = C)Cash break-even month: m* = upfront / (O - K), when O > K; otherwise cumulative On-Demand spend never catches up with the cash paidCost comparison treats an upfront payment as part of the total cost of the term. Cash break-even looks at timing: the month in which the cumulative On-Demand spend you avoid has caught up with the cash you paid on the commitment. They answer different questions, and neither is advice to buy.
Source for the product facts above: AWS documentation, checked 2026-10-27 (Amazon EC2 Reserved Instances, AWS EC2 User Guide page 'Reserved Instances for Amazon EC2 overview' as retrieved on the checked date).
A Reserved Instance is a billing commitment, not a physical instance: you pay for every hour of the term whether or not the instance runs. On-Demand is billed only for the hours you use. That is why expected usage matters as much as the rates.
AWS lists the instance type, Region, tenancy, platform, term and payment option as the variables that set the price of a reservation. A purchased Reserved Instance cannot be cancelled; depending on the offering class it may be modified or exchanged, or it may be sold on the Reserved Instance Marketplace.
For how Reserved Instances differ from Savings Plans, see the guide linked below.
Reserved Instances vs Savings Plans guide