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The other answers provide some soft general guidelines based on personal taste, but ignore many pertinent facts that one should consider when deciding between scripts, functions, or aliases.

Aliases and Functions ¹

• The entire contents of aliases and functions are stored in the shell's memory.


• A natural consequence of this is aliases and functions can only be used by the current shell, and not by any other programs you may invoke from the shell like text editors, scripts, or even child instances of the same shell.


• Aliases and functions are executed by the current shell, i.e. they run within and affect the shell's current environment.² No separate process is necessary to run an alias or function.

Scripts

• Shells do not keep scripts in memory. Instead, scripts are read from the files where they are stored every time they are needed. If the script is found via a $PATH search, many shells store a hash of its path name in memory to save time on future $PATH look-ups, but that is the extent of a script's memory footprint when not in use.


• 
  

  Scripts can be invoked in more ways than functions and aliases can. They can be passed as an argument to an interpreter, like sh script, or invoked directly as an executable, in which case the interpreter in the shebang line (e.g. #!/bin/sh) is invoked to run it. In both cases, the script is run by a separate interpreter process with its own environment separate from that of your shell, whose environment the script cannot affect in any way. Indeed, the interpreter shell does not even have to match the invoking shell. Because scripts invoked this way appear to behave like any ordinary executable, they can be used by any program.

  
  
  

  Finally, a script can be read and run by the current shell with ., or in some shells, source. In this case, the script behaves much like a function that is read on-demand instead of being constantly kept in memory.

  
  

Application

Given the above, we can come up with some general guidelines for whether to make something a script or function / alias.

• Do other programs besides your shell need to be able to use it? If so, it has to be a script.




• Do you only want it to be available from an interactive shell? It's common to want to change the default behavior of many commands when run interactively without affecting external commands / scripts. For this case, use an alias / function set in the shell's "interactive-mode-only" rc file (for bash this is .bashrc).




• Does it need to change the shell's environment? Both a function / alias or a sourced script are possible choices.




• Is it something you use frequently? It's probably more efficient to keep it in memory, so make it a function / alias if possible.




• Conversely, is it something you use only rarely? In that case, there's no sense having it hog memory when you don't need it, so make it a script.

^{¹ While functions and aliases have some important differences, they are grouped together because functions can do everything aliases can. Aliases can not have local variables nor can they process arguments, and they are inconvenient for anything longer than one line.}

^{² Every running process in a Unix system has an environment consisting of a bunch of variable=value pairs which often contain global configuration settings, like LANG for the default locale and PATH for specifying executable search path.}

I think it's up to each person's taste. For me the logic goes like this:

• First I try to make an alias, because it's the simplest.


• If the thing is too complicated to fit in one line, I try to make it a function.


• When the function starts to grow beyond a dozen of lines I put it in a script.

There is really nothing to restrict you from doing something that works.

At least partially it's a matter of personal taste. On the other hand there are some clear functional distinctions:

• aliases: only suitable for simple text replacements, no arguments/parameters


• functions: easy to write/use, full shell scripting capability, only available inside bash


• scripts: more or less like functions, but available (callable) outside of bash as well

Looking at shell scripting I've done the last few years I have more or less stopped writing aliases (because they all tend to grow into functions over time) and do scripts only if they need to be available also from non-bash environments.

PS: As for alias command="bash bashscriptname" I don't actually see any reason to do this. Even if bashscriptname is not in $PATH, a simple alias c=/path/to/script would be enough.

When to write a script ...

• Scripts assemble software components (aka. tools, commands, processes, executables, programs) into more complex components, which may themselves be assembled into still more complex components.


• Scripts are usually made executable so they can be called by name. When called, a new subprocess is spawned for the script to run in. Copies of any exported variables and/or functions are passed by value to the script. Changes to those variables do not propagate back to the parent script.


• Scripts may also be loaded(sourced) as if they were part of the calling script. This is analogous to what some other languages call "import" or "include". When sourced, they execute within the existing process. No subprocess is spawned.

When to write a function ...

• Functions are effectively pre-loaded shell scripts. They perform a bit better than calling a separate script, but only if it must be read from mechanical disk. Today's proliferation of flashdrives, SSDs and Linux's normal caching in unused RAM make that improvement largely unmeasurable.


• Functions serve as bash's principle means of achieving modularity, encapsulation and reuse. They improve the clarity, reliability and maintainability of scripts.


• The syntax rules for calling a function are identical to that of calling an executable. A function with the same name as an executable would be invoked instead of the executable.


• Functions are local to the script they are in.


• Functions may be exported (copied by value) so they can be used inside called scripts. Thus, functions only propagate to child processes, never parents.


• Functions create reusable commands that are often assembled into libraries (a script with only function definitions) to be sourced by other scripts.

When to write an alias ...

• Bash aliases don't work inside shell script constructs like if/then and for/do loops, so should only be used as keyboard shortcuts on an interactive commandline. Thus, all alias definitions usually reside inside the appropriate login script like ~/.profile or ~/.bashrc.

Within scripts like library scripts, sometimes an alias for a function is needed, such as when a function is renamed but backward compatibility is required. This can be accomplished by creating a simple function with the old name that passes all its arguments to the
new function...

# A bash in-script 'alias'
function oldFunction () newFunction "$@"; 

One other thing that I don't believe has been brought up: a function executes in the context of the invoking process, whereas a script forks a new shell.

This could be important for performance -- a function is faster, since it doesn't fork() and exec(). In normal circumstances, the difference is trivial, but if you are debugging a system that is out of memory and is page-thrashing, it could make a big difference.

Also, if you want to modify your current shell environment, you should use a function. For example, a function could change the command lookup $PATH for the current shell, but a script cannot, because it operates on a fork/exec copy of $PATH.

Here are some additional points about aliases and functions:

• 
  Same-named alias and function can co-exist


• alias namespace is looked up first (see first example)


• aliases cannot be (un)set in subshells or non-interactive environment (see second example)

For example:

alias f='echo Alias'; f # prints "Alias"
function f echo 'Function'; ; f # prints "Alias"
unalias f; f # prints "Function"

As we can see, there are separate namespaces for aliases and functions; more details can be found using declare -A -p BASH_ALIASES and declare -f f, which prints their definitions (both are stored in memory).

Example showing limitations of aliases:

alias a='echo Alias'
a # OK: prints "Alias"
eval a; # OK: prints "Alias"
( alias a="Nested"; a ); # prints "Alias" (not "Nested")
( unalias a; a ); # prints "Alias"
bash -c "alias aa='Another Alias'; aa" # ERROR: bash: aa: command not found

As we can see aliases are not nestable, unlike functions. Also, their usage is limited to the interactive sessions.

Finally, note that you can have arbitrary computation in an alias by declaring a function a immediately calling it, like so:

alias a_complex_thing='f() do_stuff_in_function; f'

which is already in widespread use in case of Git aliases. The benefit of doing so over declaring a function is that your alias cannot be simply overwritten by source-ing (or using .) a script which happens to declare a same-named function.

Script and alias and script and function aren't mutually exclusive. You can and do store aliases and functions in scripts.

Scripts are just code which is made persistent. Useful functions and aliases which you like to use in the future are stored in scripts. However, a script is often a collection of more than one function.

Since aliases aren't parameterized, they are very limited; usually to define some default parameters.

A function is a separate unit of code, a well-defined concept of a few lines of code which can't separated into smaller, useful parts; one which can be reused directly or other by other functions.

If it should be very fast, make it an alias or a function.

If it should be usable outside your preferred shell, make it a script.¹

If it takes arguments, make it a function or a script.

If it needs to contain special characters, make it an alias or a script.²

If it needs to work with sudo, make it an alias or a script.³

If you want to change it easily without logging out and in, a script is easier.⁴

Footnotes

¹ Or make it an alias, put it in ~/.env and set export ENV="$HOME/.env", but it's complicated to make it work portably.

² Function names must be identifiers, so they must start with a letter, and may only contain letters, digits, and underscores. For example, I have an alias alias +='pushd +1'. It can't be a function.

³ And add the alias alias sudo='sudo '. Ditto any other command such as strace, gdb, etc. that takes a command as its first argument.

⁴ See also: fpath. Of course you can also do source ~/.bashrc or similar, but this often has other side effects.

Just to add a few notes:

• Only separate script can be used with sudo (like if you need to edit a system file), for example:

sudo v /etc/rc.conf #where v runs vim in a new terminal window;

• Only aliases or functions could replace system commands under same name (assuming that you add your scripts dir to the end of PATH, which I think is advisable for safety in case of accidental or malevolent creating of script with name identical to a system command), for example:

alias ls='ls --color=auto' #enable colored output;

• Aliases and functions take less memory and time for execution, but take time to load (since shell has to interpret them all before showing you prompt). Take this into account if you run new shell processes regularily, for example:

# pressing key to open new terminal
# waiting for a few seconds before shell prompt finally appears.

Other than that, you could use the simplest form possible, i.e. first consider alias, then function, then script.

My rule of thumb is:

• aliases - one command, no parameters


• functions - one command some parameters


• script - several commands, no parameters

In a multi user ( or multi sysamin ) environment, I use scripts for everything, even if it just ends up being a short 'exec something....' wrapper.

Sure, it's technically slower/less efficient than an alias or function, but that almost never matters - and provided it's in the path, a script always works.

Your feature might be called from cron, from something with a reduced or modified environment like sudo or env, or the user may just be using a different shell to you - all or which is likely to break an alias or function.

If you have something performance sensitive, handle that as a special case, or better yet, consider that a trigger to rewrite in a more functional scripting language.

If we're talking about features that will only be used in other scripts, then you can also consider defining a standard shell, and writing a function library script that can just be . sourced I to all other scripts.

T

An Example for a Situation Where you Most Likely Would Like to use an Alias.

I know this is an old post but I would like to point out a situation where I almost had to use a combination of alias with a script and I chose not to use a function.

I have a script in ~/.bin/ called setup that does the following:¹

1. brings me to a certain directory.


2. defines a few variables.


3. prints messages about the state of the directory.²

The point is that if I would just run setup <project-name> I wouldn't have those variables defined and I wouldn't have gotten to the directory at all. The solution I found to be the best was to add this script to PATH and add alias setup=". ~/.bin/setup" to ~/.bashrc or whatever.

Notes:

1. I used a script for this task and not a function not because it's particularly long but because I can edit it and I don't have to source the file after an edit if I want to refresh it's usage.


2. A similar case accoured to me when I created a script to reload all my dotfiles.³

1. 
   The script is available in my dotfiles repository under .bin/.


2. 
   About the script: I give this script an argument which is a name for the project I defined in advanced. Afterwards the script knows to bring to me to the right directory according to a certain csv file. The variables it defines are taken from the makefile in that directory. The script runs afterwards ls -l and git status to show me what's going on there.


3. That script is also available in my dotfiles repository under .bin/ as well.