AWS follows a pay-as-you-go pricing model — meaning you pay only for what you use, with no upfront costs or long-term contracts.
You can scale up or down anytime, and you’re billed only for the resources consumed.
| Pricing Model | Description | Use Case |
|---|---|---|
| On-Demand | Pay per hour or per second (depending on service). | Ideal for short-term, unpredictable workloads. |
| Reserved Instances | Commit for 1 or 3 years to get up to 70% discount. | Best for steady-state usage (e.g., production servers). |
| Spot Instances | Bid for unused EC2 capacity at lower prices. | Great for flexible, fault-tolerant workloads. |
| Savings Plans | Commit to spend a specific amount ($/hour) for 1 or 3 years. | Flexible alternative to reserved instances. |
| Dedicated Hosts | Physical servers dedicated for your use. | Used for compliance or licensing requirements. |
AWS provides a Free Tier for beginners to explore services at no cost (with limits).
It’s divided into three categories:
| Type | Duration | Examples |
|---|---|---|
| Always Free | Available forever | AWS Lambda (1M requests/month), DynamoDB (25GB), SNS (1M notifications) |
| 12-Month Free | Valid for 12 months after account creation | EC2 (750 hrs/month), S3 (5GB), RDS (750 hrs/month) |
| Trial (Short-Term) | Free for a limited time | Amazon Inspector (15 days), GuardDuty (30 days) |
| Service | Free Usage Limit (Per Month) | Notes |
|---|---|---|
| EC2 (t2.micro / t3.micro) | 750 hours | You can run one instance all month long. |
| S3 | 5 GB standard storage | For storing files or hosting a static website. |
| RDS (db.t2.micro) | 750 hours | Managed relational database instance. |
| Lambda | 1M requests + 400,000 GB-seconds compute | Serverless functions. |
| CloudWatch | 10 custom metrics + 5 GB logs | Basic monitoring. |