OP wrote:
"I am considering of buying an external SSD(256 gb), how fast is an external SSD compared to the interal HDD?"
If you set up an external USB3 SSD as your boot drive, the iMac will run much MUCH faster.
Probably 3-4x, if you care to measure the reads/writes using BlackMagic Speed Test.
You could either buy a "ready-to-use" SSD such as a Sandisk Extreme or Samsung t5, or...
... buy a "bare" SSD and a 2.5" USB3 enclosure and "build it yourself".
Be aware that if you buy something like the t5, it probably comes with some factory-installed proprietary software with a custom partition, special apps, etc.
These are likely to "get in the way" of a fresh Mac OS install.
Therefore, you'd need to REMOVE this stuff before setting up the drive for the first time.
This won't be a problem with the "bare drive" scenario.
You don't need a large SSD -- 500gb or even 250 can do the job.
Put your OS, apps and account on the SSD.
Leave "large libraries" behind on the internal drive -- things like movies (possibly large libraries of pics or music as well) -- they don't require speed to run, they can "live" just as well on the slow internal HDD.
I've been booting and running my 2012 Mac Mini this way for FIVE years now -- still runs like new.