Local Variable:
a local variable is typically used inside a method, constructor, or a block and has only local scope. Thus, this variable can be used only within the scope of a block. The best benefit of having a local variable is that other methods in the class wont be even aware of that variable.
Instance Variable:
a variable which is bounded to its object itself. These variables are declared within a class, but outside a method. Every object of that class will create its own copy of the variable while using it. Thus, any changes made to the variable wont reflect in any other instances of that class and will be bound to that particular instance only.
