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Some verses of Quran use the word یهود (Jews), while other use بنی اسرائیل (Children of Israeel). Apparently they seem to be pointing to the same group of people. But God does not do say anything without a purpose and indeed they should be some difference.
So what are the differences between these two group of people?
There are many verses that use both the terms. And they can be found here:
Verses containing "Jews" (8 verses)
Verses containing "Bani Israeel" (40 verses)
یهود as it is used in the Qur'an refers specifically to the Jews during the time of the Prophet, whereas بنی اسرائیل refers to all descendants of Israel. All یهود are بنی اسرائیل, but not all بنی اسرائیل are یهود.
After the reign of Solomon, the ancient Kingdom of Israel broke into two separate kingdoms; the southern kingdom comprised mainly the tribe of Judah (one of the sons of Israel) and as such was referred to as the Kingdom of Judah. The term "یهود" is derived from the name of this kingdom, even though they're not necessarily all descendants of Judah himself.
The northern Kingdom of Israel, with the bulk of the remaining tribes, was eventually conquered and destroyed.
If you go through the referenced ayat, you'll notice that the term یهود is used specifically to refer to the contemporary followers of the religion (as per the tradition of the Kingdom of Judah); a particular group of people that were already known — by themselves as well as the prophet — by that name (you'll similarly notice the term نصارىٰ (Christian) is also such a contemporary reference).
However, God's use of the construction "بنی اسرائیل" in the Qur'an is predominantly in the context of the original covenant (i.e. the Mosaic Covenant), either by calling modern Israelites to remember it, or by accounts of historical Israelites while they were under it (i.e. between the times of the prophets Moses and Jesus). The very use of بنی اسرائیل implies this covenant, even when it is not explicitly mentioned.
When you consider that the covenant was contracted with all the descendants of Israel at the time, this could include any number of groups which are not (technically) یهود (e.g. the ten lost tribes of the northern kingdom). It only makes sense that God continues to use بنی اسرائیل when calling them toward it.
Bani Israel= race, Jews= religion
That's the direct fact, but this doesn't answer why does Allah use both namings differently.
First of all, Judaism is the religion of Sons of Israel(Jacob), but some of them are not Jewish, it's like Arabs and Islam, Arabs are Muslim but they not all of them. Christianity is the religion of one of the Sons of Israel.
When Quran refer to Sons of Israel the context is about the social and mental life, a historical information, while when we're talking about Jews, it's all about the religion, and how they do bad, and to help us to not do the same faults, the context sounds very frightening.
In the verses where you read Bani Israel you'll see how it's all about stories of what happened in that epoch. But in the verses containing Al-Yahood it's all about "the fail of their religion" and Nasaara, in one verse you read a comparison of who's the best to Muslims.
So, What's the difference between Jews and Sons of Israel, it is that Sons of Israel are all of them (even those who're Christians) but in Quran are only the people of that epoch, while Jews are those who're extremist in their religion and fail to keep strait.
There is clear difference between bani-Israelan and Yahud
Bani Israel means the children of Jacob. You can be bani-Israel at the same time not Yahud while Yahud means the followers of Judaism period.
