TL;DR: Redshift Reserved Nodes are one of the deepest discounts AWS offers — 40–75% off on a data warehouse that's often a giant slice of the monthly bill. You commit your cluster's node type for 1 or 3 years; the discount applies automatically to matching nodes. The constraints are strict: reservations are locked to node type and region, non-refundable, and compute-only. Capacity planning is the hard part, not the math — reserve the baseline, never the peak.
The numbers
- Payment tiers: All Upfront up to ~75% off (3-yr), Partial Upfront ~60–65%, No Upfront ~40–50%.
- Worked example — 4-node ra3.4xlarge in us-east-1, 24/7: on-demand $3.26/hr × 4 × 730 =
$9,500/mo ($114K/yr); 1-yr All Upfront saves ~$39K in year one (~34%); 3-yr All Upfront saves ~$64K over three years (~56%). A 20-node cluster crosses six figures/yr. - Coverage is count-based: reserve 4, run 6 → first 4 reserved, other 2 on-demand; run 2 → still pay for 4 (no refunds).
- Field example: a stable 12-node ra3.4xlarge production warehouse locked 3-yr All Upfront for ~56% off — $250K+ over three years; a brand-new evolving 6-node cluster correctly stayed on-demand.
Do this
- Confirm 90+ days of steady node-hours in Cost Explorer before committing — reserve against reality, not intentions.
- Reserve the baseline, not the peak — steady at 10 nodes, bursting to 15 → reserve 10, let 5 run on-demand at peak.
- Match node type and region exactly — an ra3.xlplus reservation does nothing for dc2.large or another region.
- Start 1-year if you're nervous — the deep 75% lives in 3-year terms, but a 1-year costs only ~10–15% of the savings and keeps options open as AWS ships new node families.
- Set a renewal reminder 60–90 days before expiry — reservations don't auto-renew and the bill can silently jump 2–3× overnight when they lapse.
Gotchas
- Node type is set in stone — migrate ra3.xlplus → ra3.4xlarge (or to Serverless) mid-term and you pay the old reservation and full on-demand on the new nodes; only AZ-within-region is modifiable.
- Compute only — backup storage, manual snapshots in S3, data-transfer-out, and Redshift Spectrum queries all still bill on-demand; even a 75% RI won't zero the bill.
- Watch the node-family roadmap — AWS keeps releasing better price-performance families; time multi-year commitments around the stability of the one you're on.
- No clean exit — the Marketplace is clunky and usually a loss.
Skip this if
- The workload is experimental/POC, seasonal, or the architecture is evolving (evaluating Snowflake/BigQuery, frequent resizing) — stay on-demand until it settles, then reserve only the baseline.
- Usage is variable rather than steady 24/7 — Redshift Serverless bills per query and can overlay the unpredictable part; if the cluster is merely idle on a predictable schedule, Pause/Resume may fit better. Confirm baseline node-hours with AWS Cost Explorer before committing.