This is one of the big questions in hosting and one I’ve never really worked out. Do you pay monthly for you hosting which means paying more but also if things go bad you can just take your website and go to another hosting service. Or do you pay yearly and get a big saving on the monthly contract but with the proviso that you’re locked into a year’s service even if your host has lots of problems.
“To be locked in or not, that is the question”
As you can see there are advantages and disadvantages to both situations and I suppose the whole thing hinges on one fact, do you trust your web host or not? It’s a tough question because the answer will determine exactly how much you are willing to invest in the company.

Another issue to look as is if you are required to take out a minimum contract or a certain type of plan. For example most plans for dedicated severs require you to pay for 3 months upfront (I have seen some that require 6 months). When you consider that even a cheap dedicated server is going to run you around £300+ a month that’s quite and investment for the 3 months.
You also have to look at things from the host’s point of view if you want to work out why they offer the discounts for longer term contracts that they do. The key for them is knowing that they have a customer for that period of time which is guaranteed revenue, this allows them to invest that cash in more servers/space/bandwidth etc. With the pay monthly guys it’s really up in the air how long they are going to be around.
So as I said it all comes back to “trust” and just how confidant you are that the host is going to deliver what they say. For me I’m never going to invest in a yearly contract with a company that I’m not familiar with or who doesn’t have a good history behind them. But if I’ve been with a service for a while and everything has been going “well” then yes Id usually be more than happy to go for a 6 month or even 12 month contract because of the money saved.
I hope this article helps if you’re looking for a hosting provider in the near future. Remember you really need to check out any company’s history before you commit to any kind of deal (even a 1 month contract). Don’t forget that if your website is your primary source of income then it’s not something you can’t leave to chance, so research and invest in a quality host. It really is worth it in the long run to know your site is up and running, there are too many horror stories of businesses down for days to risk it.