External ID and unique field types
Key Takeaway
External ID makes a custom field a matching key for outside systems, while Unique blocks duplicate values. They are separate settings, and Salesforce recommends marking External ID fields as Unique too.
External ID is a setting on a custom field. It marks the field as holding a record's ID from another system, so integrations and imports can match records by that value instead of by Salesforce IDs. Unique is a separate setting that blocks duplicate values, and the two settings are often used together.
What an External ID field does
For example, imagine Salesforce links with Oracle Financials. You can create an External ID field on Account to capture and display each account's Oracle ID.
With a field like this, you can match records without knowing their Salesforce IDs. You can use it to update or upsert records through the API, such as an upsert in Data Loader.
You can also match on External IDs to avoid creating duplicate records when you import custom objects, solutions, or person accounts with the Data Import Wizard. The wizard finds existing Salesforce records whose External IDs match the values in the import file.
The values in an External ID field are searchable in Salesforce. The field is also indexed, so selective filters on it run quickly.