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# User Center:What is a savings plan?

Last Updated:Oct 30, 2023

A savings plan is a discount plan that can be applied to offset the bills of pay-as-you-go instances, excluding preemptible instances. This topic describes the definition and mechanism of savings plans.

## Definition

A savings plan is a discount plan that Alibaba Cloud provides. When you purchase a savings plan, you make a commitment to use a consistent amount of resources on an hourly basis for a specific period of time, such as one year or three years, to receive discounted billing. A savings plan is more cost-effective than the pay-as-you-go billing method. Compared with the subscription billing method, the combination of savings plans and the pay-as-you-go billing method is more flexible.

## Mechanism

When you purchase a savings plan, you must commit to an hourly resource consumption amount. You are charged for resource consumption within your commitment based on the savings plan unit price. For resource consumption beyond your commitment, you are charged at the regular pay-as-you-go unit price. You are charged the full committed consumption amount per hour even if your resource consumption amount in an hour does not reach the committed amount.

Example:

The regular pay-as-you-go unit price of Instance Type A is USD 12/instance/hour. The discounted unit price of Instance Type A after a savings plan is used is USD 4.75/instance/hour.

You purchase a savings plan and commit to an hourly consumption amount of USD 95. Therefore, the maximum number of instances that can be discounted is 95/4.75 = 20.

In the actual usage, you run 25 instances of Instance Type A in the first hour and 15 instances of Instance Type A in the second hour.

 Billing method Fee for the first hour Fee for the second hour Total fee Pay-as-you-go 25 × 12 × 1 = USD 300 12 × 15 × 1 = USD 180 USD 480 Pay-as-you-go + Savings plan Committed amountUSD 95Fee exceeding the committed amount(25 - 95/4.75) × 12 × 1 = USD 60 Committed amountUSD 95Fee exceeding the committed amountUSD 0 USD 250

## Supported Alibaba Cloud services

You can use saving plans for the following Alibaba Cloud services:

• Elastic Compute Service (ECS)

• Elastic Container Instance (ECI)