The PSD file is the photoshop document file. It’s the primary file type for anything you create in Photoshop. It allows you to keep your layers in there, editable text, and various other imaging options saved in your PSD. PSD files are often used to save high-quality graphics. “A PSD file can be as simple as a single image, or as complex as a file containing hundreds of layers, images, masks, and selections, with a file size in the hundreds of megabytes or even gigabytes.”
If you have a file that you are working on, even if you are in a rush, make sure to save your PSD file and whatever file you are exporting. This way, you won’t lose your work and need to redo it. It can be a simple mistake to forget to save as we have personally experienced the struggle! It will save you much time, effort, and headaches to remember to save your file as a PSD.
PSD files can be used directly in your InDesign files or your Illustrator files. If there is an image, portrait, or landscape being edited, often the file starts in Photoshop and is moved directly to Illustrator to add text over the top. However, Photoshop is the only application that allows for a full range of edits and maintains the PSD in the same format. While other applications such as Adobe Lightroom can open the files, the edits don’t allow layers to be used since they would be done to a flattened image.
Photoshop is not made for text. It is a raster-based application, not a vector-based application. Any text elements you want to add or edit you will want to do in Illustrator, making it really handy to bring the PSD file into Illustrator.