Customers using both Reserved and On-Demand instances will have Reserved Instance rates applied first to minimize costs. You pay the low hourly usage fee for every hour in your Reserved Instance term (which means you’re charged the hourly fee regardless of whether any usage has occurred during an hour). When your total quantity of running instances during a given hour exceeds the number of applicable Reserved Instances you own, you will be charged the On-Demand rate. For example, if you own three Reserved Instances with the same instance attributes and region (or Availability Zone if applicable), the billing system checks each hour to see how many total instances you have running that match those parameters. If it is three or less, you will be charged the Reserved Instance rate for each matching instance running that hour. If more than three are running, you will be charged the On-Demand rate for the additional instances.