I want the URL to my German about-me page to be über-mich (German for "about me"):

This works fine if the filename contains an umlaut:

index.php
robots.txt
über-mich.php

What keeps confusing me is how that URL should be represented in anchor and link tags in the code of the webpage. Should I use umlauts or urlencode them?

Is this correct:

<link rel="canonical" href=";>
<a href="/über-mich">Über mich</a>

or this:

<link rel="canonical" href="/%C3%BCber-mich">
<a href="/%C3%BCber-mich">Über mich</a>

Both links work! So which is correct? Or doesn't it matter?