Confused over LocalSystem and LocalService Accounts

Question

I am new to windows services programming. I have confusion about what to set the Account type while writing a windows services.

How to choose or how to determine to which account type we need to set while writing a service?

Answer 1

We generally create special windows (local for local only access or domain account for things that need to authenticate accross the network) accounts to run custom services. This way we can restrict and lock down the permissions to make sure it only has access to what we need. You can also see which specific users are culprits or resource hogging with monitoring on a shared server.

As for the built in accounts...

Local System:

The built-in LocalSystem user account has a high level of access privileges; it is part of the Administrators group.

Network Service:

The built-in Network Service user account has fewer access privileges on the system than the LocalSystem user account, but the Network Service user account is still able to interact throughout the network with the credentials of the computer account.

Local Service:

The built-in Local Service user account has fewer access privileges on the computer than the Network Service user account, and those user privileges are limited to the local computer. Use the Local Service user account if the worker process does not require access outside the server on which it is running.

Source(s): Microsoft Technet