Home   What Do I Choose - JPEG, GIF, or PSD?   PSD stands for PhotoShop Document.  When you save an image as a Photoshop document, you can easily go back and make changes to it.  An image saved as a psd is not compressed and should not be used on a web page!   JPEG is a file format that compressed the image and should be used if the image has more that 8 colors. For example, any photograph should be saved as a jpeg file.   GIF is another file format that compresses the image and should be used when your image has a limited number of colors (less than 8).  A simple web button or banner should be saved as a gif file.   If you are unsure what you are going to do with the image, save it as a psd file and you can always decide at a later time.