SMTP is a protocol for sending mail. The SMTP server may require authentication. If it supports basic, then it’s a user name and password. The account can be an interactive account, or a non interactive account, it just needs to be supported by the SMTP server.
Note: the sql mail client only supports basic authentication, many mail servers, like office 365, Gmail, etc no longer supports basic authentication due to security concerns. They have switched to oauth/ openid authenication which sql mail does not support.