WordPress releases an update to correct bugs, improvements to functions and display formats. It is, however, advised that you do not update your version once WordPress makes an announcement. The plugins that are installed need also to catch up with the changes. Once you update and plugins have not made any updates yet, this can cause errors and malfunctions.
You can update WordPress by clicking on the links shown on the announcement or through the WordPress update page.
When you are on the WordPress Updates page, you can click on the UPDATE AUTOMATICALLY button or DOWNLOAD (version). The best method would be to update automatically. When you opt for the download of the version, you need to install manually on the server folders.
Once Update Automatically is clicked, WordPress will download the zipped files, unzip the file then do the updates on the server folder. This process may take a while.
When the update has been made, you will see a new format on screen. You can navigate and find out more about the new version.