There are 3 different recovery models inside SQL Server...

Simple Recovery model – with minimum administrative overhead for the transaction log, the simple recovery model risks significant work-loss exposure if the database is damaged. Data is recoverable only to the most recent backup.

Bulk-Logged recovery model – Used for bulk operations, for large-scale such as bulk import or index creation, switching temporarily to the bulk-logged recovery model increases performance and reduces log space consumption. Log backups are still required.

Full Recovery Model - The full recovery model guarantees the least risk of losing work if a data file is damaged. In this model, SQL Server fully logs all operations. In this recovery model, you can recover to a Point-in-time and is the most recommended model for financially systems.