AWS Savings Plans offer a pricing strategy that provides lower costs on regular on-demand instances in exchange for committing to one or three years of consumption. This plan necessitates a one-year commitment of an aggregate per dollar per hour commitment, allowing users to choose their own hourly spending limit. The plan offers discounts up to 72% compared to On-Demand pricing and is available in various instance types, regions, and AWS compute services. However, there are risks associated with using Savings Plans, including vendor lock-in, loss of flexibility, and difficulty in setting them up. Users must carefully consider their usage patterns and forecast demand to reap the full benefits of these plans. Additionally, Savings Plans alone may not optimize cloud bills, emphasizing the importance of rightsizing and automation.