In Microsoft 365, user mailboxes are limited to 50GB or 100GB, depending on the licence you have. For users with lots of emails, you need a solution to keep mailboxes under the limit, without losing data or access to emails.
There are 3 ways to "archive" emails in Outlook/Exchange, however there's only one true archive option that should be used - Archive Mailboxes (also called Online Archive, or In-Place Archiving).
This video explains the 3 "archiving" options in Outlook (skip to 4:43 for Archive Mailboxes).
In Summary:
❌ Archive folder - just another folder in your mailbox
❌ Auto-Archive - stored on your computer, not available online (you will lose data!)
✅ Archive Mailboxes - the right solution!
Figure: Exchange admin center | Manage mailbox archive
Users will see their new Online Archive as a separate mailbox in Outlook
Figure: Outlook | Online Archive mailbox
By default, emails will be moved to the archive mailbox after 2 years. Users can select a different archiving policy per folder by going to the Outlook folder Properties | Policy.
Figure: Default Online Archive policy options
Admins can edit the default policy, or add new policy options in Microsoft Purview | Data lifecycle management | Exchange (legacy)
Figure: Microsoft Purview | MRM Retention tags
For more information see Microsoft's documentation: https://learn.microsoft.com/en-us/purview/archive-mailboxes?WT.mc_id=M365-MVP-33518