When you say backing up there are several possible versions of that comment.
If you are using the Windows Imaging utility and want to make a system image, there are requirements for the device to hold that image. I use a secondary internal drive but you can use external drives or network locations. You can now even create the image on the same drive although having it there might not be a good idea if the hard drive were to fail. You could copy or move the image for safe keeping.
If you have a new system it is more than likely a UEFI install which has certain requirements for a bootable device which is where creating a Bootable USB drive, which you are not doing, would need to be FAT 32.
A recovery drive will create an image of your current Windows 10 install and then use the images in the Recovery partition to give you a modified factory reinstall, if you wanted to do that.