I noticed that we have both peach schnapps and peach liqueur in our home bar, and they taste pretty different. What's the difference between schnapps and liqueur? I was still a little confused by the Wikipedia definitions below so found this answer on a couple of websites.
Schnapps are fermented and distilled; liqueurs are simply fruits steeped in an alcohol which has already been fermented and distilled.
In general, it refers to any kind of strong alcoholic beverage.
American schnapps are alcoholic beverages that are produced by mixing neutral grain spirit with fruit flavors or with other flavors. This mixture is then bottled with added sugar and (usually) glycerine, producing a smooth, syrup-like drink. Their alcohol content can be between 15% and 50% ABV (30–100 proof). These drinks technically fall into the category of liqueurs because of their added sugar content.
It's an alcoholic beverage made from distilled alcohol that has been flavored with fruit, cream, herbs, spices, flowers or nuts and bottled with added sugar. Liqueurs are typically quite sweet; they are usually not aged for long but may have resting periods during their production to allow flavors to marry.
In the United States and Canada, where spirits are often called "liquor", there is often confusion over liqueurs and liquors, especially as many spirits today are available in flavored form (e.g. flavored vodka). The most reliable rule of thumb is that liqueurs are quite sweet and often syrupy in consistency, while liquors are not. In parts of the United States, liqueurs may also be called cordials or schnapps.