Custom object versus custom field
Key Takeaway
A custom field adds one more piece of data to the records of an object that already exists. A custom object is a new object with its own records, fields, security, and relationships.
Salesforce gives you two main ways to store business data that standard objects don't already cover: a custom field and a custom object. Choosing between the two is a core data modeling decision.
Choosing between a custom field and a custom object
If you need one more piece of data on the records of an object that already exists...
You should create a custom field on that object.
If you need to store information that's unique to your organization and needs its own records...
You should create a custom object, and then add the custom fields it needs.
For example, imagine an org that wants to track product defects associated with customer cases. The org creates a custom object called Bugs and links it to Case. Each defect gets its own Bugs record, and the data about that defect goes in custom fields on Bugs. A custom field on Case would add one more piece of data to a case, but it wouldn't give a defect its own record.