With the current state of CAD software, picking between the two is as easy as picking between the two buttons. The increasing gap between designers and machinist makes it easy to pick one over the other without really thinking about it. I will try to shed some light on the issue and help you choose the best one for the situation.
In machining and design, a chamfer is a sloped or angled corner or edge, and a fillet is a rounded corner or edge. Of course you can use them on exterior and interior edges. Both exist because of the impossibility to machine a part to perfection with ease. The sharp edge left in the corners is a risk to the hand that tries to move the component.
Benefits of chamfers
- one tool can be used to machine chamfers of different sizes. If you have edges with 1×45° and edges where you need a 2×45° chamfer it is pretty safe to assume that you can use the same tool for both thus saving machine time
- it is less expensive and faster to apply chamfers. This is especially true with manually machined parts
- reduces the stress concentration of the edge (in smaller amounts than fillets)
- extremely useful for complementary parts (parts that should fit in holes/pockets)
Cons of chamfers
- not really used or recommended for interior edges
- chamfer edges are the first to lose paint
Advantages of fillets
- removes stress concentration from the corner (in higher proportion compared to chamfers)
- has the advantage of completely removing the corners which is especially beneficial for painted parts
- contributes to the aesthetics of the part
Cons of fillets
- internal edges decide the maximum diameter of the tool that can be used
- more expensive/take more time compared to chamfers
In conclusion I think that fillets should be used where chamfers are just not enough. If you have a visible part or where the ergonomic of the component is very important fillets should be preferred when a slight increase in price is not a problem. For everything else, chamfers are usually enough, and applying them to most of the corners of your part when you are finished with your design should become second nature. Your shop colleagues will thank you!