Data Protection Centre/Microsoft 365/Retention Policy vs. Litigation Hold vs. Archiving in Exchange Online


In this article

  • Retention policies and labels
  • Litigation holds
  • Archiving
  • Retention policy vs. litigation hold vs. archiving
  • Best practices for Exchange Online retention
  • Frequently asked questions

Retention Policy vs. Litigation Hold vs. Archiving in Exchange Online

26 Oct 2021
8 min read

‘Archiving’, ‘retention policies’, and ‘litigation holds’ are different terms related to Exchange Online data retention, and administrators should be aware of when to use what.
In this article, we discuss in detail how retention policies, litigation holds, and archive mailboxes are different from each other, and explain how they should be used.

Retention policies and labels

Retention policies in Microsoft 365 are rules that can be created to govern business information, comply with industry-related data retention requirements, and prevent data loss instances. They are part of an organization’s overall information governance strategy as they cover different types of data including mailboxes, Teams conversations, as well as SharePoint and OneDrive data.
Retention policies are applied at an organizational level and can be applied to specific data locations after deciding whether to retain content, delete content, or retain the content for a period and then delete it. 

Note: Microsoft uses the term ‘retention policies’ in various contexts. In this article, retention policies and labels refer to the new Microsoft 365 retention policy features available in the Compliance Center.

Click here to know more about Microsoft 365 retention policies and labels.

Litigation holds

Litigation hold helps you place user mailboxes on hold, i.e., retain all the contents of a mailbox, including deleted items and the original versions of modified items. It is not a general retention feature, rather, it is an eDiscovery feature in Exchange Online. When a mailbox is placed on litigation hold, items in the user's primary and the archive mailboxes (if enabled) are retained. Litigation holds must be manually applied to user mailboxes.

Click here to know more about litigation holds in Microsoft 365.


In Microsoft 365, archive mailboxes refer to the additional mailbox storage space provided to users.
The primary intent for using archive mailboxes is for users to move data that they no longer use currently to a secondary mailbox. This helps save storage costs associated with the primary mailboxes.

After the archive mailbox is enabled, up to 100 GB of additional storage is available per user. Once the limit is reached, users can make use of a feature called auto-expanding archiving (also called unlimited archiving) that provides additional storage in the archive without contacting Microsoft. However, there is a limit of 1.5 TB to the auto-expanded archive.

For step-by-step instructions on how to turn on auto-expanding archiving, click here.

To understand unlimited archiving in detail, click here.

Retention policy vs. litigation hold vs. archiving

Here is a comprehensive table explaining the differences between retention policy, litigation hold, and archiving.
Retention policy vs. litigation hold vs. archiving
Retention policyLitigation holdArchiving

Use case

Retention policies are used to protect valuable data from data loss events such as accidental deletion and unwanted information is deleted. 
Litigation hold is an eDiscovery feature that is helpful in preserving data for legal compliance. eDiscovery is the process of identifying and collecting Electronically Stored Information to be presented as evidence in any legal proceeding. 
Archive mailboxes act as a secondary mailbox that can be used to save up on storage costs on mailbox items that are no longer actively used.

License requirement

Retention policies and labels are only available in the advanced E3 and E5 editions of Microsoft 365.
Litigation hold is available in the advanced E3 and E5 editions of Microsoft 365.
Archive mailboxes are available to all organizations that have an Exchange Online license.

Feature access

Retention label settings are available under 'Information Governance' within the Compliance Center. 
Litigation hold is available under the eDiscovery section within the Microsoft 365 Compliance Center. 

Archive mailbox settings are available under 'MRM', in the Classic Exchange Admin Center.

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Best practices for Exchange Online retention

  • To implement effective data retention methods, first classify all organization data into three retention scenarios:

    a. Retain only: Items that have to preserved for legal compliance and should never be deleted.

    b. Retain and then delete: Items that must be retained for a specific period of time before deletion as they bring business value.

    c. Delete only: Items that need not be retained and must be destroyed.

  • For an effective retention strategy, use a combination of Messaging Records Management (MRM) and Microsoft 365 retention policies. Microsoft recommends using MRM for your archiving needs and retention policies for your retention requirements. To learn more on how to create retention policies or move messages to the archive, click here.

  • The default retention for mailbox items in the Recoverable Items folder is 14 days. However, you can choose to extend it up to 30 days. This feature is available only through PowerShell. Click here to know more.

  • Use a third-party solution to backup your data: While the native settings offered by Microsoft are helpful in retaining your data, they do not serve as a backup solution. Microsoft is not responsible for backing up your data and they recommend using third-party apps for backup. To protect your Exchange Online data, use a combination of native Microsoft features and an efficient third-party backup solution such as SysCloud.

Reasons to backup Exchange Online with SysCloud:

  • Limitations of native retention settings: The native retention settings offered by Microsoft do not serve as an effective data backup and recovery option. Having an independent backup of your data stored off-site is an effective bulwark against data loss incidents.

  • Easy restoration: Third party tools such as SysCloud, help you easily restore specific or all emails in just a few clicks.

  • Save license costs: Third-party solutions allow you to retain safe copies of organizational data even after employee exits and account deletions, thus saving license costs.

  • With simple GUIs, no technical or coding expertise is required to backup and restore data.

  • Fast backups: Take faster backup even for large teams.

  • Protection against ransomware and phishing: Cloud security concerns have sky-rocketed in the pandemic. Tools like SysCloud secures data being backed up from ransomware and phishing.

Frequently asked questions

  • What is the default retention of Office 365 Exchange Online and archive mailbox?

    If a mailbox item is deleted in Microsoft 365, it is retained in the deleted items folder for 30 days, after which it moves to the Recoverable Items folder. For a detailed illustration on what happens when data is deleted in Exchange Online, click here.

    Items in the archive mailbox if deleted, are lost forever.

  • When you archive an email does it reduce the size of the mailbox?

    Archiving mails help reduce storage space of the primary mailbox. However, there are limits to the archive mailbox as well. Click here to know more.

  • What happens to emails after retention policy?

    Once the retention period has expired, the mailbox items either get deleted, or moved to the archive, or triggers a disposition review for the administrator to review. The action taken depends on the option chosen at the time of retention policy creation.

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In this article

  • Retention policies and labels
  • Litigation holds
  • Archiving
  • Retention policy vs. litigation hold vs. archiving
  • Best practices for Exchange Online retention
  • Frequently asked questions

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