Here are the EC2 rates for reserved instance (total including hourly fee plus reservation fee):
$375/month for reserving 1 year
$282/month for reserving 3 years
It's not too bad compared to Hetzner. On-demand instance is for spinning it up on very short notice and shutting it down after the work is done.
Don't agree with this, unless there is hourly billing. As if you just want to try out some thing, say a large instance instead of medium, to just see how it changes something, won't be possible here.
edit: would love to know why the down vote?
In fact we ourselves, have not been able to go for a reserved instance yet. Although have been thinking about it for an year or so. As there is always a likeliness of going to a bigger configuration in the near future (small->medium or medium->large etc.). So you are not sure if reserving is a good idea.
So you settle for the gains of the on-demand e.g. having more instances in the day
Not a big deal if you are from the US but if you are from Australia for example then you wouldn't be able to take advantage of a Sydney availability zone if it become available (as it is rumored).