Savings Plans vs Reserved Instances: Which Offers Cross-Service Discount Flexibility?
A company runs mixed workloads on AWS — some on EC2, some on Lambda, and some on Fargate — and wants to commit to a consistent hourly spend on compute to receive discounts similar to Reserved Instances, but with the flexibility to apply those discounts across different compute services and instance types. Which purchasing option provides this flexibility?
Quick Answer
The answer is Savings Plans. This is correct because Savings Plans allow you to commit to a consistent hourly spend, such as $10 per hour, and automatically apply that discount across EC2, AWS Lambda, and AWS Fargate usage, regardless of instance family, size, operating system, or region. This cross-service discount flexibility is exactly what Reserved Instances lack, as RIs are locked to a specific instance family and region. On the AWS Certified Cloud Practitioner CLF-C02 exam, this question tests your understanding of purchasing options and their scope; a common trap is assuming Reserved Instances offer the same flexibility, but they do not. Remember the memory tip: Savings Plans save you money across services, while Reserved Instances are restricted to one instance type.
⚠ Common exam trap
Candidates often confuse Reserved Instances with Savings Plans, assuming RIs also provide cross-service flexibility, but RIs are locked to a specific instance family and region, whereas Savings Plans (especially Compute Savings Plans) offer the broadest flexibility across EC2, Lambda, and Fargate.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Savings Plans
Savings Plans (C) offer the flexibility to commit to a consistent hourly spend (e.g., $10/hour) and automatically apply the discount across EC2 instances, AWS Lambda, and AWS Fargate usage, regardless of instance family, size, OS, or region. This matches the requirement for a Reserved Instance-like discount with cross-service and cross-instance flexibility, which Reserved Instances cannot provide because they are tied to a specific instance family and region.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Reserved Instances
Why it's wrong here
Reserved Instances lock discounts to a specific instance family, tenancy and Region, so they cannot cover Lambda or Fargate usage. They suit steady-state EC2 workloads with predictable capacity; the stem's cross-service, cross-instance-type flexibility requires Compute Savings Plans instead.
- ✗
Spot Instances
Why it's wrong here
Spot Instances provide spare EC2 capacity at steep discounts but can be reclaimed with two minutes' notice, and they cover no Lambda or Fargate usage. They suit interruption-tolerant batch or stateless workloads, not the stem's requirement for a consistent hourly spend commitment across compute services.
- ✓
Savings Plans
Why this is correct
Savings Plans commit to a consistent hourly compute spend, measured in dollars rather than instance attributes, so the discount automatically applies across EC2, Lambda and Fargate regardless of instance family, size, tenancy or Region. That spend-based commitment is precisely the cross-service flexibility the stem requires, unlike Reserved Instances.
- ✗
Dedicated Hosts
Why it's wrong here
Dedicated Hosts allocate physical servers for licensing and compliance control, offering no hourly spend commitment or discount mechanism spanning services. They are the right choice when you must bring your own Windows or SQL Server licences or meet host-level isolation rules, not for flexible compute savings.
Quick reference
Cloud Service Model Comparison
| Model | You Manage | Provider Manages | Examples |
|---|---|---|---|
| IaaS | OS, runtime, apps, data | Hardware, hypervisor, networking | EC2, Azure VMs, GCP Compute Engine |
| PaaS | Apps and data | OS, runtime, middleware, hardware | Elastic Beanstalk, Azure App Service |
| SaaS | Data and settings only | Everything else | Microsoft 365, Salesforce, Workday |
| FaaS / Serverless | Function code only | Infra, scaling, runtime | Lambda, Azure Functions, Cloud Run |
| CaaS | Containers and apps | Kubernetes, OS, hardware | EKS, AKS, GKE |
Go deeper
Related to this question
About these practice questions
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Same concept, more angles
2 more ways this is tested on CLF-C02
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company has predictable workloads running 24/7. Which EC2 pricing option would provide the most significant cost savings compared to On-Demand pricing?
medium- A.Spot Instances
- B.On-Demand Instances
- ✓ C.Reserved Instances
- D.Dedicated Hosts
Why C: Reserved Instances (RIs) provide a significant discount (up to 72%) over On-Demand pricing in exchange for a one- or three-year commitment. Since the company has predictable, 24/7 workloads, RIs are the ideal choice because they match the steady-state usage pattern and offer the highest cost savings for always-on instances.
Variation 2. Which AWS pricing model provides the largest discount compared to On-Demand pricing in exchange for a 1 or 3-year commitment with full upfront payment?
easy- A.Spot Instances
- B.On-Demand Instances
- ✓ C.Reserved Instances (All Upfront, 3-year)
- D.Compute Savings Plans (1-year, No Upfront)
Why C: Reserved Instances (All Upfront, 3-year) provide the largest discount compared to On-Demand pricing because the customer commits to a 1- or 3-year term and pays the entire amount upfront, which gives AWS predictable capacity planning and reduces billing overhead. This model can offer discounts of up to 72% off On-Demand rates, significantly more than partial upfront or no upfront options, and is the most cost-effective for steady-state workloads.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CLF-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CLF-C02 exam.