Having a working knowledge and understanding of these different image formats is essential to making the most of your digital photo projects.

1. A File Format for Every Occasion
As you learn and become more familiar with Adobe Photoshop you
will likely notice that Photoshop allows you to save images in many
different formats or file types.
Having a working knowledge and understanding of these different
image formats is essential to making the most of your digital photo
projects.
While they are many different image types the following is a
description of the most common file types you will use when
working in Photoshop
Digital Image File Formats
PSD
If you use Photoshop for your digital photo editing then PSD is
probably the most important file format that you need to know. A
PSD file is a Photoshop file format and is your best option when
working on digital photos for two main reasons. First of all, PSD files
allow the user to work in layers and channels and save work being
done without compressing the layers. This of course usually results
in a large file size. Secondly, PSD files do not lose image quality as
you work on images because there is no compression when the file
is saved resulting in lost data. It is always best to save your work as
a PSD file until your image is finished and then you can save into the
format most appropriate for your project.
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JPEG
JPEG, which stands for Joint Photographic Experts Group, is one of
the most common and well known file formats. JPEG files are good
for web use as well as a variety of applications due to their small file

2. size. Due to compression JPEG images loss data (image quality)
each time change the file is saved.
GIF
GIF, or Graphics Interchange Format, is a popular file format for web
use and other Internet applications. These files are typically small in
size and load quickly in Internet browsers. GIF files are limited to a
maximum of 256 colors.
TIFF
TIFF, or Tagged Image File Format, are high quality images but are
not really used that often and are not good for Internet use.
Although there are more file formats than we have listed here these
are the formats you will want to use in your Photoshop photo editing
projects.
For the most part, the only formats you will use on a regular basis
are PSD, JPEG, and GIF.
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