AAC
AAC (Advanced Audio Coding) is the successor to MP3. At the same bitrate it sounds noticeably better, which is why YouTube, Apple Music, iTunes, and the entire Apple ecosystem use AAC by default. It is supported by every iPhone, Android, browser, and modern car stereo — a strict upgrade over MP3 for new files.
MP3
MP3 is the most compatible audio format ever made. It plays on every device built in the last 25 years, from a $5 Bluetooth speaker to a Tesla, and 320 kbps MP3 is sonically indistinguishable from CD for most listeners. Pick MP3 when you want a file that will simply play, everywhere, without anyone asking what a codec is.