When you store a String as
String str1 = "Hello";
directly, then JVM creates a String object with the given value in a separate block of memory known as String constant pool.
And whenever we try to create another String as
String str2 = "Hello";
JVM verifies whether any String object with the same value exists in the String constant pool, if so, instead of creating a new object JVM assigns the reference of the existing object to the new variable.
And when we store String as
String str = new String("Hello");
using the new keyword, a new object with the given value is created irrespective of the contents of the String constant pool.