Storage VPS for backups: cheapest 1TB+ plans for rclone and BorgBackup

What a backup target actually needs

A storage VPS for backups has different requirements from a general-purpose VPS. The CPU mostly idles. The network matters during backup windows and is quiet the rest of the day. What actually matters:

• Disk capacity per dollar. The whole point. You're buying terabytes, not compute.
• RAM for your backup tool. BorgBackup maintains a dedup index in memory. Restic does too. Rclone doesn't. This determines the minimum usable plan.
• Disk type and RAID. HDD is expected (and fine for sequential write workloads). RAID-6 or RAID-60 protects against drive failure. An NVMe read cache (AlphaVPS, Crunchbits) speeds up metadata operations and Borg's index lookups. Straight HDD with no cache (HostHatch) is slower on random reads but cheaper.
• Transfer allowance. Your backup job pushes data every night. A 1TB storage VPS with 500GB monthly transfer is useless for incremental nightly backups of even a moderate dataset. Look for multi-TB transfer or unmetered options.
• Location relative to your production server. Cross-datacenter backups are the point (same-DC backup doesn't survive a facility fire), but your backup target should be in a different facility, not a different continent. Latency during transfer adds up on nightly jobs.

The provider comparison

*BuyVM Block Storage Slabs have no OS or IP — they attach to a BuyVM VPS ($3.50/mo minimum), making the total $8.50/mo for a 1TB backup server. Crunchbits plans are frequently sold out.

AlphaVPS — the value pick

AlphaVPS's 1TB storage VPS at roughly €3.33/month (annual billing, about $3.60/month) gives you 2 CPU cores, 2GB RAM, and 1TB of RAID-60 HDD with a dedicated NVMe read cache. The NVMe cache is the differentiator: Borg's dedup index and rclone's metadata checks hit the cache instead of spinning disk, which meaningfully speeds up operations compared to straight-HDD providers. Located in Sofia, Bulgaria (Telepoint-East) with additional options in Germany, UK, and US. The 3TB monthly transfer is enough for nightly incremental backups of most workloads but will be tight if you're doing initial full-repo seeding of a large dataset — plan to throttle or schedule the initial sync over a few days.

HostHatch — rare locations, tight RAM

HostHatch's Storage VPS at $5/month for 1TB (1 vCPU, 1GB RAM) uses enterprise-grade spinning disks — no SSD cache, no NVMe tier. The appeal is location diversity: HostHatch offers storage nodes in Stockholm, Amsterdam, London, and other locations where most storage VPS providers don't exist. If you need an off-site backup target in Zurich or Vienna for data residency reasons, HostHatch may be your only budget option. The 1GB RAM limits Borg to smaller repos (see RAM section below). For rclone or rsync, the RAM constraint doesn't matter.

BuyVM Block Storage — performance king

BuyVM's approach is architecturally different. Instead of a standalone storage VPS, you buy a Block Storage Slab ($1.25/month per 256GB, $5/month per 1TB) and attach it to a BuyVM VPS as a block device. The connection runs over a 40 Gbps InfiniBand RDMA fabric with NVMe caching — performance approaches local disk, which is unique in budget storage. You can attach up to 8 Slabs (up to 10TB each) to a single VPS.

The catch is that you need a BuyVM VPS to mount the Slab on ($3.50/month minimum), and BuyVM is perpetually sold out. If you already have a BuyVM slice, adding a 1TB Slab at $5/month is the best storage deal in the market. If you're starting from zero and BuyVM is out of stock, this option doesn't exist for you today.

Contabo Storage VPS — most RAM, less disk

Contabo's Storage VPS 1 gives you 800GB SSD with 3GB RAM and 2 vCores for roughly $6.26/month. The RAM is the draw: 3GB is enough for BorgBackup on large repos without swapping. The disk is SSD rather than HDD, which is faster but smaller per dollar — you get 800GB instead of the 1TB that HDD-based providers offer for less money. And 32TB monthly transfer is generous. The trade-off is Contabo's known CPU overselling, but for a backup target that mostly idles, CPU steal doesn't matter.

Tool × provider pairing

The right provider depends on which backup tool you're using, because each tool has different resource demands.

rclone (any provider)

Rclone syncs files without maintaining an in-memory index. It reads the remote file list, compares it to local, and transfers the diff. RAM requirement: minimal. Even a 1GB storage VPS with straight HDD (HostHatch at $5/month) works fine for rclone. The limiting factor is transfer speed and bandwidth allowance, not compute. Best pairing: AlphaVPS ($3.60/month, NVMe cache speeds up rclone's directory listings) or BuyVM Slab (InfiniBand speed, unmetered bandwidth for large datasets).

BorgBackup (2GB+ RAM recommended)

Borg maintains a chunk-level dedup index in memory during operations. A 200GB database backed up nightly typically grows by 1-2GB per night thanks to dedup, but the index that tracks all those chunks sits in RAM. For repos under 500GB of unique data, 1GB RAM usually works. Above that, Borg swaps the index to disk, and on HDD-backed storage VPS, "disk" means spinning platter — dedup lookups go from microseconds to milliseconds, and a nightly backup that takes 10 minutes on 2GB RAM takes 90 minutes on 1GB with swap. Best pairing: AlphaVPS (2GB RAM, €3.33/month) or Contabo (3GB RAM, $6.26/month). Avoid HostHatch's 1GB storage line for Borg repos above 500GB.

Borg 2.0 added rclone as a backend, which means you can also use Borg with Hetzner Storage Box or Backblaze B2 without needing a VPS at all — but the dedup index still lives on your local machine, so the RAM constraint just moves from the storage VPS to your source server.

restic (1-2GB RAM depending on repo size)

Restic's memory model sits between rclone and Borg. It deduplicates, but its index is smaller per chunk than Borg's. A 1TB repo in restic uses roughly 300-500MB of RAM for index operations. Best pairing: AlphaVPS (2GB, NVMe cache helps with index lookups) or HostHatch (1GB is workable for medium-size repos). Restic also supports S3 backends natively, so Backblaze B2 or Hetzner Object Storage are alternatives if you don't need a VPS.

rsync (any provider, any RAM)

Rsync is the simplest option: incremental file sync over SSH, no dedup, no encryption by default. RAM and CPU requirements are negligible. The only factor is bandwidth and disk I/O. Best pairing: whatever's cheapest. AlphaVPS at $3.60/month or Hetzner Storage Box at €3.20/month (rsync is natively supported on Storage Boxes).

The RAM trap

Most storage VPS plans ship with 1GB RAM. Most backup guides recommend BorgBackup for its dedup efficiency. These two facts collide badly.

Borg's dedup index is roughly 80-120 bytes per chunk. With Borg's default chunk size (~2MB), a 1TB repo has about 500,000 chunks, and the index consumes roughly 50-60MB — fine on 1GB RAM. But if you're backing up many small files (email servers, build artifacts, photo libraries), the chunk count explodes. A 500GB repo of small files can easily generate 5 million chunks and a 500MB+ index, which leaves almost nothing for the OS and Borg itself on a 1GB machine.

The symptoms: backup jobs that ran in 10 minutes start taking hours. The storage VPS becomes unresponsive during backups. borg create gets killed by the OOM killer mid-operation, leaving a locked repo.

The fix is straightforward: if you're using Borg, buy 2GB RAM. AlphaVPS (€3.33/month) and Contabo ($6.26/month) both include 2-3GB RAM in their storage plans. If you're committed to a 1GB provider (HostHatch at $5/month for the location diversity), use rclone or rsync instead of Borg — they don't maintain in-memory indexes and run fine on 1GB.

When a VPS is the wrong answer

A storage VPS gives you root access, an IP, and the ability to run arbitrary software. For backups, you often don't need any of that. Two alternatives that are cheaper or simpler:

Hetzner Storage Box — €3.20/month for 1TB

A Storage Box is not a VPS. There's no SSH shell, no root, no OS. It's a managed storage endpoint that speaks SFTP, rsync, BorgBackup (server-side), SMB, and WebDAV. You point your backup tool at it and it stores the data. Hetzner manages the hardware, RAID, and availability.

The fact that it supports Borg natively is the key: you run borg init targeting the Storage Box over SSH, and Borg operates in append-only mode on the remote end. The dedup index stays on your local machine — so the Storage Box's RAM (which you don't control) is irrelevant. You need enough RAM on your source machine, not on the storage target. For users who just want a backup destination and don't need a compute node, this is simpler and cheaper than any storage VPS.

Caveats: Hetzner-only locations (Falkenstein, Helsinki). No custom software on the storage side. 10 concurrent connections max. And you're trusting Hetzner's RAID rather than managing it yourself.

Backblaze B2 + rclone — $6/month per TB

Object storage, not block storage. You pay $6/month per TB stored, egress is free via Cloudflare (or $0.01/GB otherwise). Rclone and restic both support B2 natively. No server to manage, no VPS to patch, no RAID to worry about. The trade-off: no SSH, no BorgBackup (B2 is S3-compatible, not SSH-compatible), and restore speed depends on Backblaze's egress network. For "store it and forget it" backups where you rarely restore, B2's simplicity wins. For active backup workflows with frequent restores, a VPS is faster.

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