Template is a predefined form of SMS content that can be reused  Favorite is any template that can be accessed quickly for regular usage. You can add certain templates as favorites too.
Template is now mandatory for all messages being sent out, be it OTP, transactional or promotional messages    Once a template is created, you can make one of the created templates a favorite anytime
Template must be created by default while setting up SMS account    Favorite need not be set up as part of the signing up process.