How the NEW AWS Free Tier ACTUALLY works

AWS New Free Tier Program (as of July 15th, 2025)

Key Concepts:

• AWS Free Tier
• AWS Credits
• EC2 Instance
• Cost Budget
• Amazon Bedrock Playground
• AWS Lambda (with Function URLs)
• RDS (Relational Database Service)
• Paid Plan
• Always Free Tier
• 12-Month Free Tier
• Short-Term Trials

1. Introduction and Overview

The video explains the overhauled AWS Free Tier program as of July 15th, 2025. The speaker aims to clarify the program's details, including its nuances and how to avoid unexpected charges, due to confusing documentation. When signing up for a new AWS account, users now have two options: the Free Tier program (free usage for up to 6 months) or a Paid Plan (access to all AWS services without Free Tier constraints).

2. AWS Credits and Required Tasks

• The Free Tier provides up to $200 in AWS credits.
• Initially, only $100 is granted; the remaining $100 requires completing five tasks.
• Each task completion earns $20 in credits.
• Tasks:
  1. Set up an EC2 instance: A virtual server. The speaker has tutorials on their channel.
  2. Set up a cost budget: A mechanism to set spending limits and receive notifications upon exceeding them.
  3. Interact with Amazon Bedrock Playground: Use the chatbot system. Requires enabling models first.
  4. Create a web app using AWS Lambda with Function URLs: Specific requirement for credit eligibility.
  5. Set up an RDS database: Relational Database Service.
• The speaker estimates the tasks take about an hour, potentially less. A follow-up video is planned to streamline the process.

3. Service Constraints and Access

• The Free Tier provides free usage to select services, not all.
• Services requiring large infrastructure purchases are typically restricted (e.g., Amazon Kendra).
• Most popular services are included: Lambda, DynamoDB, API Gateway, RDS, EC2, etc.
• To see which services are not included, users can visit aws.com/free, navigate to "Explore our offers," filter by "Plan type," and select "Paid plan exclusive."
• The speaker notes that the excluded services are generally niche and uncommon. Examples given: AWS Clean Rooms, Kendra, Apache Flink.

4. Free Tier Duration and Termination

• The Free Tier lasts up to 6 months from account creation.
• After 6 months, the account enters a "paused" state. Resources are not immediately deleted.
• If the account is not upgraded to a Paid Plan within 90 days of the pause, all data and resources are deleted.
• The Free Tier can also end prematurely if all AWS credits are exhausted.
• Example: Setting up an RDS database with a large compute node could deplete the $200 credit quickly.
• In summary: 6 months or credit exhaustion triggers the end of the Free Tier, followed by a 90-day grace period before data deletion if no upgrade occurs.

5. Credit Card Requirement and Eligibility

• A credit card is required to qualify for the Free Tier, even though it's free. This is likely to reduce friction when upgrading to the paid plan.
• To qualify for Free Tier credits, two conditions must be met:
  1. Use a brand new email address not associated with any other AWS account. Using tricks like "[email protected]" will allow account creation but not credit eligibility.
  2. Use a credit card not associated with any other AWS account.
• The speaker speculates that these restrictions aim to ensure the Free Tier is used by new AWS users, not experienced users seeking free credits.

6. Upgrade Process

• Upgrading from the Free Tier to the Paid Plan requires explicit action.
• There is no automatic transition; users must click a button in the AWS console to upgrade.
• This prevents accidental charges.

7. Legacy Free Tier Programs

• Older programs like "Always Free," "12 Months Free," and short-term trials still exist.
• "Always Free" (e.g., certain Lambda invocations) remains in effect.
• Services available for 12 months after the first use are still available.
• Short-term trials (e.g., AWS Lightsail instances) continue to function.
• The new Free Tier and Paid Plan options are added on top of these existing programs.

8. Conclusion

The video provides a detailed explanation of the new AWS Free Tier program, highlighting its benefits, limitations, and requirements. The speaker emphasizes the importance of understanding the program's nuances to avoid unexpected charges and data loss. The continued existence of legacy free tier programs is also noted.