Here’s how renewals work:
When recurring billing is turned on for Microsoft 365, you’ll be billed for your subscription on your renewal date. If you turn off recurring billing, your subscription will expire on the date shown and you won’t be billed in the future.
And here are the payment options:
Monthly commitment payment: pay month by month.
Annual commitment payment: Sign up for a one-year subscription and receive a discount. By default, your billing plan will be set to monthly billing. After your purchase, you can change your billing plan to annual billing if you prefer.
Annual commitment payment: Sign up for a one-year subscription and choose to pay monthly or for the entire year at the time you sign up.