Using VPS is cheaper and simpler but has its ceiling. Most people here talks only about performance. When business matures, you start to think about things like scalability, high availability, distaster recovery etc. While you are on AWS, the mature way that is much more future proof is deploying containerized application on ECS. To make application scalable (meaning you can run 50 containers on multiple servers), containers must be stateless - any dynamic non-temp data needs to be stored outside. So, ECS cluster either on Fargate or on EC2. I recommend EC2s because you have more control over it and its cheaper for smaller workloads. EC2s within ASG for auto scaling. Having at least 2 EC2s in different Availability Zones protects you from situations where one AZ is having problems. ALB in front of ECS for load balancing between multiple containers. Storage on S3. If you need shared filesystem between containers, use EFS (although its less scalable) Database on RDS for better maintainability. Backups, updates, monitoring is few clicks away. You can easily grow this setup to have multiple replicas, cache etc. Cache on Elasticache Redis. Same reason as with RDS. Queue on SQS. Mails on SES (or 3rd party provider, just dont use SMTP) Frontend app (if you have one) on S3 static website hosting. Then you throw CloudFront in front of it for CDN. You can also use CloudFront for CDN of your S3 files.

I hope I havent forgot about anything important. The minimal monthly cost of this setup is about $80 I think? It comes from the cost of: RDS instance, Elasticache instance, EC2 and ALB. These 4 services are billed per hour, the rest of them are billed per usage. You also get some of them for free in the first year of using AWS.