NCHAR and NVARCHAR data types are both Unicode character data types with a maximum length of 4,000 characters. The main difference between these 2 data types is that an NCHAR data type is fixed-length while an NVARCHAR is variable-length. If the number of characters entered in an NCHAR data type column is less than the specified column length, spaces are appended to it to fill up the whole length.
Another difference is in the storage size wherein the storage size for NCHAR is two times n bytes while for NVARCHAR is two times the number of characters entered (in bytes).
You should use NCHAR data type when the data values in a column are expected to be consistently close to the same size. On the other hand, you should use NVARCHAR when the data values in a column are expected to vary considerably in size.