They do the same safety job — keeping the generator and the utility from being tied together — in different hardware. An interlock kit is a listed sliding plate on the panel cover: you turn the main breaker off, slide the plate, and turn a generator breaker on, then manage loads with the branch breakers. A transfer switch sits between the service and the loads it serves. A manual transfer switch usually covers a fixed group of essential circuits; an automatic transfer switch is what pairs with a standby generator that starts itself.
This is a standing debate in r/Generator. People who want flexibility and a lower equipment cost often prefer a listed interlock plus an inlet, and accept that they must keep the generator from being overloaded. People who want a foolproof, pre-chosen set of circuits — or who need the house to transfer without anyone at the panel — want a transfer switch.
The National Electrical Code covers optional standby systems in Article 702 and requires transfer equipment that prevents interconnection with the utility. Whether a particular interlock kit is accepted depends on it being listed for your panel and on the AHJ. This site does not publish national install prices; local quotes vary widely.
Never backfeed a panel through a dryer outlet. Size the generator with the generator calculator, and read the portable-vs-standby and manual-vs-automatic pages.
This is not a permit calculation, a utility approval, or a substitute for a licensed electrician, HVAC contractor, or the authority having jurisdiction. Panel Headroom is an independent educational site. It is not a utility, a certification body, or a contractor. Electrical and generator work that is done incorrectly can cause fire, shock, or carbon monoxide poisoning. Use the adopted electrical code and manufacturer instructions; pull permits where required.