String

1. Single copy of each String literal is maintained in String pool.
2. Since literals are immutable, they can be safely referenced by multiple variables. (interning)
3. Use variable.intern() to return the literal referenced by the String variable. E.g.

String str2 = str1.intern(); 

1. Initializing using "new" (not recommended as it will not reuse string pool literals) - E.g.

String str1 = new String("Hello"); // or 
String str2 = new String(charArray); // charArray is character array

String Builder

1. Mutable.
2. Extra methods - append, insert, delete, reverse etc.
3. Instantiated using "new". E.g.

StringBuilder sb = new StringBuilder(); //empty value
StringBuilder sb = new StringBuilder("Hello"); //value is hello
StringBuilder sb = new StringBuilder(10); //value is empty, default capacity(memory reserved) is 10

Capacity is elastic and will increase if more characters are added in the object.
Reading a character beyond current length(no. of characters stored) throws StringIndexOutOfBoundsException.