AWS Pricing Overview
📌 Note: This post has been updated to reflect current AWS pricing models, tools, and features as of 2025. The original AWS Pricing Whitepaper (2016) has been superseded by the How AWS Pricing Works whitepaper (last revised December 2024).
AWS pricing features include
- Pay as you go
- No minimum contracts/commitments or long-term contracts required
- Pay only for services you use that can be stopped when not needed
- Each service is charged independently, providing flexibility to choose services as needed
- Pay less when you reserve
- Services like EC2 and RDS provide Reserved Instances, which offer significantly discounted rates (up to 72% off On-Demand)
- Savings Plans offer flexible commitment-based pricing with up to 72% savings on compute (EC2, Lambda, Fargate) and database usage
- Pay even less by using more
- Services like storage and data transfer offer tiered pricing — the more the usage, the less you pay per gigabyte
- Consolidated billing to consolidate multiple accounts and get tiering benefits across the organization
- Pay even less as AWS grows
- AWS works continuously to reduce costs by reducing data center hardware costs, improving operational efficiencies, lowering power consumption, and generally lowering the cost of doing business
- AWS has announced over 130 price reductions since launch
- Free services
- AWS offers many services free of charge including VPC, Elastic Beanstalk, CloudFormation, IAM, Auto Scaling, OpsWorks, and Organizations (Consolidated Billing)
- Note: While these services are free, resources provisioned by them (e.g., EC2 instances launched via Elastic Beanstalk) are charged at standard rates
- AWS Free Tier
- AWS Free Tier for customers to explore AWS services at no cost
- ⚠️ Updated July 2025: For new accounts created after July 15, 2025, AWS replaced the traditional 12-month Free Tier with a credit-based model offering up to $200 in credits ($100 at sign-up + $100 earned through activities). Customers choose between a Free plan (6 months) and a Paid plan.
- Existing accounts (created before July 15, 2025) retain the original 12-month Free Tier structure
- Always Free offerings remain available (e.g., Lambda 1M requests/month, DynamoDB 25GB, CloudWatch 10 metrics)
AWS Pricing & Cost Management Tools
- AWS Pricing Calculator — the current tool to estimate costs for AWS services. Provides per-service cost breakdown and aggregate monthly/annual estimates. Supports authenticated in-console mode (GA 2025) that incorporates your discounts and commitments.
- Note: The AWS Simple Monthly Calculator was retired on March 31, 2023. The AWS TCO Calculator has also been retired. Use the AWS Pricing Calculator for all new estimates.
- AWS Cost Explorer — visualize, understand, and manage AWS costs and usage over time with custom reports, forecasting, and Savings Plans/RI recommendations.
- AWS Budgets — set custom budgets and receive alerts when costs or usage exceed thresholds.
- AWS Cost and Usage Reports (CUR) — comprehensive and customizable reporting on AWS costs with granular line-item data.
- AWS Billing and Cost Management Console — view current charges, account activity, itemized by service and usage type. Previous months’ billing statements are available.
AWS Pricing Fundamental Characteristics
- AWS basically charges for
- Compute
- Storage
- Data Transfer Out — aggregated across services (EC2, S3, RDS, DynamoDB, etc.) and charged at the outbound data transfer rate
- AWS does not charge for
- Inbound data transfer across all AWS services in all regions
- Outbound data transfer between AWS services within the same region (in most cases)
- ⚠️ Public IPv4 Address Charges (Effective Feb 1, 2024):
- All public IPv4 addresses are charged at $0.005 per IP per hour (~$3.65/month), whether attached to a service or not
- Applies to EC2, RDS, EKS, NAT Gateway, Load Balancers, VPN, and all services with public IPv4
- Free Tier includes 750 hours of public IPv4 usage per month for the first 12 months
- BYOIP (Bring Your Own IP) addresses are not charged
- AWS recommends adopting IPv6 to reduce costs
AWS Savings Plans
Savings Plans are a flexible pricing model offering savings of up to 72% on AWS compute and database usage in exchange for a commitment to a consistent amount of usage (measured in $/hour) for a 1 or 3-year term.
- Compute Savings Plans
- Most flexible — automatically applies to EC2, Lambda, and Fargate usage
- Up to 66% savings regardless of instance family, size, AZ, Region, OS, or tenancy
- EC2 Instance Savings Plans
- Up to 72% savings, applies to a specific instance family in a Region
- Flexible across size, OS, and tenancy within the committed family
- SageMaker Savings Plans
- Up to 64% savings on SageMaker usage
- Database Savings Plans (launched 2024)
- Applies to RDS, Aurora, Redshift, Neptune, and other database services
- 1-year term commitment with flexible coverage across database engines and instance types
- Payment Options: All Upfront (best discount), Partial Upfront, or No Upfront
AWS Elastic Cloud Compute – EC2
EC2 provides resizable compute capacity in the cloud and the cost depends on –
- Clock Hours of Server Time
- Resources are charged for the time they are running
- EC2 uses per-second billing (minimum 60 seconds) for Linux, Windows, and Ubuntu instances. Some commercial OS instances still use hourly billing.
- Machine Configuration
- Depends on the physical capacity — pricing varies with the AWS Region, OS, number of cores, memory, and processor architecture
- AWS Graviton (Arm-based) instances offer up to 40% better price-performance compared to x86 instances
- Machine Purchase Type
- On-Demand Instances — pay for compute capacity per second/hour with no commitments
- Reserved Instances — 1 or 3-year commitment for up to 72% discount (Standard and Convertible types)
- Savings Plans — flexible commitment-based pricing (Compute or EC2 Instance plans) for up to 72% savings
- Spot Instances — use spare EC2 capacity at up to 90% discount compared to On-Demand. Instances can be interrupted with 2-minute notice when capacity is needed back.
- Dedicated Hosts — physical servers dedicated to your use, useful for licensing compliance
- Capacity Reservations — reserve capacity in a specific AZ without commitment discount
- Auto Scaling & Number of Instances
- Auto Scaling automatically adjusts the number of EC2 instances based on demand
- No additional charge for Auto Scaling — you pay only for the EC2 instances launched
- Load Balancing
- Elastic Load Balancing (ELB) distributes traffic among EC2 instances
- Charged per Load Balancer Capacity Unit (LCU) per hour for ALB/NLB/GWLB, or per hour + data processed for CLB
- CloudWatch Monitoring
- Basic monitoring (5-minute intervals) is available at no additional cost
- Detailed monitoring (1-minute intervals) is charged per metric per month
- Elastic IP Addresses
- ⚠️ Updated Feb 2024: All public IPv4 addresses (including Elastic IPs) are now charged at $0.005/hour whether in-use or idle
- Previously, only unattached Elastic IPs were charged — this is no longer the case
- Additional Elastic IPs on a running instance continue to be charged at $0.005/hour
- Operating Systems and Software Packages
- OS prices are included in the instance prices for Amazon Linux, Ubuntu, Windows, RHEL, SUSE, and other commercial OS options
- Commercial software from AWS Marketplace incurs additional licensing costs
AWS Lambda
AWS Lambda lets you run code without provisioning or managing servers and the cost depends on
- Number of Requests
- Lambda registers a request each time it starts executing in response to an event notification or invoke call
- Charges are for the total number of requests across all functions
- Free Tier: 1 million requests per month (always free)
- Duration
- Calculated from the time code begins executing until it returns or terminates, rounded up to the nearest 1 millisecond (updated from 100ms in Dec 2020)
- Price depends on the amount of memory allocated to the function (128 MB to 10,240 MB)
- Free Tier: 400,000 GB-seconds per month (always free)
- Processor Architecture
- Functions running on ARM/Graviton2 architecture get 20% lower duration charges compared to x86, delivering up to 34% better price-performance
- Tiered Pricing (introduced 2022)
- Duration charges are tiered — higher usage tiers get lower per-GB-second rates
- Applied separately for x86 and Arm architectures
- Provisioned Concurrency
- Optional feature to keep functions initialized — charged for provisioned concurrency amount plus duration and requests
- INIT Phase Billing (effective August 1, 2025)
- AWS standardized billing for the initialization (INIT) phase across all Lambda configurations
- Previously, INIT phase for ZIP-packaged functions with managed runtimes was unbilled
AWS Simple Storage Service – S3
S3 provides object storage and the cost depends on
- Storage Class
- S3 Standard — frequently accessed data; 99.999999999% durability and 99.99% availability
- S3 Intelligent-Tiering — automatically moves data between access tiers based on usage patterns; no retrieval charges; small monthly monitoring fee per object
- S3 Express One Zone (launched Nov 2023) — single-digit millisecond latency, up to 10x faster than S3 Standard, 80% lower request costs; single AZ
- S3 Standard-IA (Infrequent Access) — lower storage cost, retrieval fee applies; 99.9% availability
- S3 One Zone-IA — lower cost than Standard-IA, stored in a single AZ; 99.5% availability
- S3 Glacier Instant Retrieval — archive storage with millisecond retrieval
- S3 Glacier Flexible Retrieval (formerly S3 Glacier) — minutes to hours retrieval
- S3 Glacier Deep Archive — lowest cost storage with 12-48 hour retrieval
- Storage
- Number and size of objects stored and the storage class selected
- Requests & Data Retrievals
- Number and type of requests (GET, PUT, COPY, LIST, etc.) — rates vary by request type and storage class
- Retrieval fees apply for IA and Glacier classes
- Data Transfer Out
- Amount of data transferred out of S3 to the internet (tiered pricing)
- Data transfer from S3 to CloudFront within the same Region is free (since 2024)
- Management & Analytics
- S3 Inventory, S3 Analytics, S3 Storage Lens, and Object Tagging have separate charges
AWS Elastic Block Store – EBS
EBS provides block level storage volumes and the cost depends on
- Volumes
- EBS provides multiple volume types:
- General Purpose SSD (gp3, gp2) — gp3 is the latest generation, 20% lower cost per GB than gp2, with independently configurable IOPS and throughput
- Provisioned IOPS SSD (io2 Block Express, io2, io1) — for I/O-intensive workloads; io2 Block Express supports up to 256,000 IOPS
- Throughput Optimized HDD (st1) — for frequently accessed, throughput-intensive workloads
- Cold HDD (sc1) — lowest cost for infrequently accessed data
- Charged by the amount provisioned in GB per month until released
- EBS provides multiple volume types:
- IOPS
- gp3: 3,000 IOPS and 125 MiB/s included free; additional IOPS/throughput provisioned separately
- gp2: IOPS scales with volume size (3 IOPS per GB)
- io1/io2: Charged per provisioned IOPS per month
- st1/sc1: No IOPS charges
- Snapshots
- Snapshots are stored incrementally in S3, charged per GB-month of data stored
- EBS Snapshots Archive offers up to 75% lower snapshot storage cost for long-term retention
- Data Transfer Out
- Outbound data transfer charges are tiered
AWS Relational Database Service – RDS
RDS provides an easy-to-set-up, operate, and scale relational database in the cloud and the cost depends on
- Clock Hours of Server Time
- Resources are charged for the time they are running, from DB instance launch until termination
- Stopped DB instances still incur storage costs (and are automatically restarted after 7 days)
- Database Characteristics
- Pricing varies with the database engine (MySQL, PostgreSQL, MariaDB, Oracle, SQL Server, or Aurora), instance size, memory class, and processor (x86 vs. Graviton)
- Graviton-based instances (r6g, r7g, r8g families) offer better price-performance than x86 equivalents
- Database Purchase Type
- On-Demand — pay per hour/second with no commitment
- Reserved Instances — 1 or 3-year term for significant discounts
- Database Savings Plans (launched 2024) — flexible commitment-based pricing across RDS, Aurora, Redshift, and Neptune
- Aurora Serverless — pay per Aurora Capacity Unit (ACU) per second; scales to zero when idle
- Provisioned Storage
- Backup storage of up to 100% of provisioned database storage for an active DB Instance is not charged
- After termination, backup storage is billed per GB per month
- Additional Storage
- Backup storage exceeding the free allocation is billed per GB per month
- Requests (I/O)
- Number of input and output requests to the database
- Aurora I/O-Optimized configuration eliminates I/O charges in exchange for ~30% higher compute/storage cost
- Deployment Type
- Multi-AZ deployments cost approximately 2x Single-AZ for high availability
- Multi-AZ with readable standbys (2 replicas) available for Aurora and RDS
- Data Transfer Out
- Outbound data transfer costs are tiered
- Inbound data transfer is free
- Data transfer between RDS and EC2 in the same AZ is free
AWS CloudFront
CloudFront is a web service for content delivery, distributing content to end users with low latency and high data transfer speeds with no minimum commitments.
- Traffic Distribution
- Data transfer and request pricing vary across geographic regions, based on the edge location through which content is served
- Requests
- Number and type of requests (HTTP or HTTPS) and the geographic region
- Data Transfer Out
- Amount of data transferred out of CloudFront edge locations to the internet
- Data transfer from S3 origin to CloudFront is free (within the same Region)
- Flat-Rate Pricing Plans (launched Nov 2025)
- Fixed monthly fee bundling data transfer, requests, AWS WAF, Shield, DNS (Route 53), logging, and serverless edge compute
- Includes monthly S3 storage credits
- No overage charges — predictable pricing for website delivery and security
- CloudFront Security Savings Bundle
- Up to 30% savings on CloudFront charges in exchange for a monthly commit (1-year term)
- Includes AWS WAF charges covered within the commitment
AWS Certification Exam Practice Questions
- Questions are collected from Internet and the answers are marked as per my knowledge and understanding (which might differ with yours).
- AWS services are updated everyday and both the answers and questions might be outdated soon, so research accordingly.
- AWS exam questions are not updated to keep up the pace with AWS updates, so even if the underlying feature has changed the question might not be updated
- Open to further feedback, discussion and correction.
- How does AWS charge for AWS Lambda?
- Users bid on the maximum price they are willing to pay per hour.
- Users choose a 1-, 3- or 5-year upfront payment term.
- Users pay for the required permanent storage on a file system or in a database.
- Users pay based on the number of requests and consumed compute resources.
- Which AWS pricing model provides the MOST flexibility without long-term commitment?
- Reserved Instances
- Savings Plans
- On-Demand
- Spot Instances
- Which tool should be used to estimate costs for a new AWS architecture?
- AWS Simple Monthly Calculator
- AWS Pricing Calculator
- AWS Cost Explorer
- AWS Budgets
Note: The Simple Monthly Calculator was retired in March 2023. AWS Pricing Calculator is the current tool.
- Starting February 2024, which statement about AWS public IPv4 addresses is correct?
- Only idle Elastic IP addresses are charged
- All public IPv4 addresses are charged at $0.005/hour whether in-use or idle
- Public IPv4 addresses are free for the first 12 months only
- Only addresses not associated with EC2 instances are charged
- Which AWS Savings Plan type offers the MOST flexibility?
- EC2 Instance Savings Plans
- Compute Savings Plans
- SageMaker Savings Plans
- Database Savings Plans
Explanation: Compute Savings Plans automatically apply across EC2, Lambda, and Fargate regardless of instance family, size, Region, or OS.
- A company wants to reduce EC2 costs by up to 90% but can tolerate interruptions. Which purchase option should they use?
- Reserved Instances
- On-Demand Instances
- Spot Instances
- Savings Plans
- Which S3 storage class automatically moves objects between access tiers to optimize costs?
- S3 Standard
- S3 Standard-IA
- S3 Intelligent-Tiering
- S3 Glacier Flexible Retrieval