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Key takeaways

• Microsoft 365 Premium costs more without clearly offering more value.
• Copilot AI limits are vague, making Premium a risky upgrade.
• Personal or Family plans are the better value for most users.

Microsoft 365 comes in several different flavors, both for individuals and organizations. 

For individuals alone, you can choose among Basic, Personal, Family, and Premium. Excluding Basic, the other three subscriptions offer desktop versions of the core Office apps, namely Word, Excel, PowerPoint, OneNote, and Outlook. 

Also: No, Microsoft Office was not renamed Microsoft 365 Copilot - here's why you're confused

With each one, Microsoft doles out a certain amount of OneDrive space. And as the much ballyhooed icing on the cake, Copilot AI is built in to generate content and answer your questions.

Which Microsodt 365 plan should you choose?

Assuming you're looking to purchase one of these subscription-based versions, which one should you choose? 

Also: Want to keep using Microsoft 365 in Windows 10 after October? You can - with caveats

I'll reveal right off the bat that I'd advise against Microsoft 365 Premium, and I'll explain why when I come to that edition. For now, let's look at each one to see what you get and how much it will cost you.

1. Microsoft 365 Basic

For $1.99 a month or $19.99 a year for one person, the Basic edition is the cheapest of the four plans. But you don't get much bang for your buck. Word, Excel, Outlook, and the other desktop Office applications are not included, so you'd have to rely on the free web-based versions if you want those programs. Copilot is also persona non grata with Basic.

Also: How to remove Copilot from your Microsoft 365 plan - before you have to pay for it

Microsoft 365 Basic works on the web as well as through mobile apps for iOS and Android. You can use the program on multiple devices at the same time, and you get 100GB of OneDrive storage. But that's it. Essentially, this is more a way to get extra OneDrive space beyond the free 5GB and not a viable option if you're seeking the desktop Office applications. 

If more OneDrive storage is all you need, great. If not, you can rule this one out.

2. Microsoft 365 Personal

Priced at $9.99 a month or $99.99 a year for one person, the Personal variant does kick in the desktop versions of all the core products--Word, Excel, PowerPoint, Outlook, and OneNote. You can also get premium versions of the otherwise free Microsoft Teams, Defender, Designer, and Clipchamp.

You're able to use the Personal flavor on PCs, Macs, and mobile devices and on as many as five devices at the same time. You'll score a hefty 1TB of OneDrive space. And then there's Copilot. With this plan comes Microsoft's AI for you to use in both Windows and the Microsoft 365 Office suite. 

In Windows, you're able to use Copilot in such apps as Notepad, Photos, and Paint. In the Microsoft 365 suite, you can use it in Word, Excel, and the rest of the bunch.

Also: Microsoft is packing more AI into Windows, ready or not - here's what's new

But you'll need to keep an eye out if you're a heavy AI user. That's because Microsoft doles out 60 AI credits each month. Each use of AI in a Windows or Microsoft 365 program chews up one credit. Use them all up before the month is over, and you'll have to wait until the next month to resume your AI adventures.

If you need the desktop Office suite, want plenty of OneDrive space, and wish to dabble with AI, this version is your best bet.

3. Microsoft 365 Family

At $12.99 a month or $129.99 a year, Microsoft 365 Family offers the same features as the Personal edition. The only difference is that this one is designed for sharing. You can share the subscription with as many as five other people. Each person gets 1TB of OneDrive space for a total of 6TB. And you do get the same access to Copilot as with Microsoft 365 Personal.

Also: 10 free Windows apps that improved my productivity (and I'd easily pay money for)

Sounds good so far. Ahh, but there is a catch. You can't share custody of the AI. Those Copilot AI benefits can be used only by the subscription holder. For the other people on the plan, Copilot is not available in Microsoft 365. It is available in Windows apps like Photos and Paint, but you get only 15 credits per month, the same as any free user.

If you want to use Microsoft 365 with other people in your household or even in a small business with just a few employees, the Family version makes the most sense. Just remember that you're the only one who'll be able to fully take advantage of Copilot.

4. Microsoft 365 Premium

And that brings us to Microsoft 365 Premium.

Introduced in October 2025, Premium is the latest flavor that's available at, shall we say, a premium price. Costing $19.99 a month or $199.99 a year, this version has all the features of Microsoft 365 Family. You get the full Office suite, access for up to six people, 1TB of OneDrive space per person, and of course, Copilot. 

Also: Is the new Microsoft 365 Premium worth it? Here's how it compares to Copilot Pro

But as with Microsoft 365 Family, Copilot is available only to the account owner.

Otherwise, Copilot is where the differences start. With both the Personal and Family plans, AI use is relatively clear. You get the 60 credits per month that carry through Windows and the Office applications. OK, fine. You'd then think that the Premium edition perhaps doubles that amount or even gives you unlimited credits. Nope. If anything, Microsoft is vague about this.

In its page on "AI credits and limits for Microsoft 365 Personal, Family, and Premium," Microsoft tries to explain the AI use for each version. Yes, Premium does kick in several features not found in the other two. These include the AI agents Researcher and Analyst, Copilot Actions, and Photos Agent. The idea here is that you'll want to send these AI agents off on their own missions to tackle tasks without your intervention.

Also: The 11 Microsoft apps I ditch on every new Windows install - and the 11 I keep

I know that Microsoft and other companies are pushing agentic AI. But so far, there's more hype than reality here. Can these AIs really carry out complicated tasks without your intervention? And what happens if they make a mistake?

Further, Microsoft is coy about how much you'll be able to use the AI features in Premium. The chart on the AI credits page lists several tools, including Copilot Chat, Copilot Pages, Audio Overview, Photos Agent, and Copilot in the Office apps. But instead of stating a specific number of credits and uses, Microsoft simply cites "extensive use" of these features. 

So you don't really know how much you can use it without bumping into limits. I'm sure there's a reason for the vagueness, but that doesn't instill me with confidence.

Also: AI PCs aren't selling, and Microsoft's PC partners are scrambling

You can try the Premium edition for free for one month. I'd certainly recommend doing that if you're considering this version. Otherwise, my advice is to opt for Microsoft 365 Personal for one person and 365 Family if you need to share the subscription with multiple people.

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