It all depends on your purpose.
Yes, As character is the easiest and most predictable method but it should be reserved for logically “inline” images or more generally frames. The position is highly predictable because the frame behaves just like a character in a paragraph.
It is fit for sequential elements such as a formula in a paragraph (which is the default anchor mode for them).
However, the location is bound to the position within the paragraph.
Of course, when the frame is the only element in the paragraph, you get approximatively To paragraph without the hassle of this mode.
When your image/frame is not a logical part of the paragraph but a side illustration/note, anchor mode should be To paragraph. The frame is linked to the paragraph, moves with it but you have much more freedom in positioning: it can be put anywhere in the current paragraph page. There are nearly countless possibilities. I won’t describe here the pros and cons; experiment to find what fits best your need.
To character is basically equivalent to To paragraph except that the frame is linked to some designated character within the paragraph instead of the first one. This makes no difference when the paragraph is fully laid out in a page. But when the paragraph spans several page breaks, the frame is positioned nearest the anchoring character, not withstanding the positioning parameters. Therefore the frame is not necessarily on the same page as the beginning of the paragraph.
There are also some subtleties with Keep withing text boundaries checked. This may move the frame to next page to avoid it covers part of the margins (top and bottom generally).
As soon as you understand clearly the effects of the various parameters, I recommend you summarise your positioning intent in a frame style so that you don’t need to manually tune each frame individually. It has also the added benefit that frame positioning is controlled centrally and, as with other styles categories, a change in the style is immediately echoed on all frames formatted with this style.
Using frame styles is always the most reliable way to format images.