Why store email locally on my computer?
By moving less-frequently accessed information from the Office 365 email service to local storage, you can preserve your quota on the server for current and more pertinent messages, tasks, and attachments.
To store data on your computer, Outlook uses Personal Storage Table (.pst) files. You can use a personal storage table file to move email, contacts, tasks, and more from the Office 365 email server to local storage.
You can create and use multiple personal storage table files. For example, you may want to create another set of folders in a personal storage table file to keep personal information separate from work-related information.
You can also use personal storage table files as a permanent archive (not to be confused with the Outlook Auto Archive feature) for your email, contacts, and tasks as they can be stored not only on your computer's hard disk drive, but can also be moved to a CD, DVD, or other off-line media. PST files created with Outlook have a 50 GB limit.
Creating personal storage table files using Outlook 2016
Using personal storage table files
In most cases, a personal storage table file is created from within Outlook and is available while Outlook is running. From within Outlook, you can create sub-folders in your personal storage table file to aid in organizing archived items. To move mail and other items between an Office 365 mailbox and a personal storage table file, you can use either drag-and-drop functionality or menu commands.
Personal storage table files on your workstation are not available while accessing your email using Outlook Web Access. Additionally, local personal storage table files do not automatically follow you from one computer to the next. Outlook must be configured on a workstation to look at a particular personal storage table file that's located on a local drive.
Outlook Data Files (.pst) are saved on your computer in the Documents\Outlook Files folder.