Pricing Fundamentals & the Free Tier
The three pricing drivers, pay-as-you-go principles, free tier types, and the data transfer rule everyone forgets.
8 min read
What you pay for
AWS pricing boils down to three fundamental drivers: compute (per second/hour of processing), storage (per GB stored), and outbound data transfer (per GB leaving AWS). Most services price along these axes with no upfront costs and no termination fees.
Exam tip
Data transfer IN to AWS is free. Data transfer OUT to the internet costs money. Traffic between AZs or Regions also incurs charges. This asymmetry is a favorite exam fact.
Pricing principles
- Pay-as-you-go — no upfront commitment; stop paying when you stop using.
- Save when you commit — Reserved Instances and Savings Plans discount steady usage (up to ~72%).
- Pay less by using more — volume-tiered pricing (e.g., S3 per-GB price drops at higher volumes).
- Prices vary by Region — the same instance costs different amounts in different Regions.
The three free tier types
| Type | Duration | Example |
|---|---|---|
| Always free | Forever | 1M Lambda requests/month, 25 GB DynamoDB storage |
| 12 months free | First year after sign-up | 750 hrs/month of t2/t3.micro EC2, 5 GB S3 Standard |
| Trials | Short term from first use | e.g., 2 months of QuickSight, 30 days of Macie |
Tip
The AWS Pricing Calculator estimates the monthly cost of an architecture *before* you build it — the go-to answer for "estimate costs for a planned deployment."
Knowledge check
Question 1 of 3Which data transfer is typically FREE on AWS?