How to Reduce AWS VPC Peering Data Transfer Costs Across Accounts

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If you’re using Amazon Web Services (AWS) and need to connect Virtual Private Clouds (VPCs) across different accounts within the same Region and Availability Zone (AZ), you’ll be happy to know that this setup comes with free data transfer. AWS specifically offers free data transfer over a VPC Peering connection when both VPCs are in the same AZ, regardless of whether they belong to the same or different accounts.

Here’s what you need to know:

First, setting up VPC Peering between different AWS accounts within the same Region and AZ is completely free. The ownership of the accounts doesn’t matter—if the data stays within the same AZ, there are no costs for data transfer. This can be a cost-saving option if you only need communication within the same zone.

However, if your network traffic crosses from one AZ to another or between different Regions, standard data transfer charges will apply. Specifically, when your traffic crosses AZ boundaries, you’ll be billed at the usual in-region data transfer rates. Similarly, crossing from one Region to another incurs inter-Region data transfer fees.

Charges are usually billed to both accounts involved in the data transfer. The account sending the data pays for outbound transfer, while the receiving account is billed for inbound transfer. So, depending on the flow of your traffic, both VPC owners could share the costs if traffic crosses AZ or Region boundaries.

It’s also worth noting that AWS has made inter-AZ data transfer free for other services like AWS Transit Gateway, AWS PrivateLink, and AWS Client VPN. But for VPC Peering, the free same-AZ data transfer is a longstanding benefit that helps keep communication between VPCs both secure and cost-effective within the same zone.

In summary, if you want to keep your data transfer costs to a minimum when connecting VPCs across different accounts, ensure they are in the same AZ. Doing so will allow you to transfer data freely within that zone, saving money and simplifying your network setup.