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Both let you use a second domain on one hosting account, but they serve very different purposes.
Add-on Domain
An add-on domain hosts a genuinely separate, independent website with its own content, in its own folder on your account.
Parked Domain
A parked domain simply points an additional domain name to your existing website's content — visiting either domain shows the exact same site, useful for owning brand variations or common misspellings.
Choosing Between Them
Use an add-on domain when you genuinely need a second, distinct site. Use a parked domain when you just want an alternate name pointing at content you already have.
