Most medium to high-end digital cameras will offer you a choice of file formats in which to save your images. The most popular formats are JPEG, TIFF and RAW. Learn how to decide which file format is best for you.
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Nothing Beats Camera Raw
As far as quality and versatility goes, nothing beats a RAW file. RAW files contain the most information (like capturing 4096 shades of gray instead of only 256) and allow for the most versatility when it comes time to open your image in Photoshop. But having said that, RAW files also take the most work to get a great-looking image.
Not all digital cameras will offer TIFF as a choice, but when you have both TIFF and JPG available, then here's how I'd think about your choices:
TIFF files will always be higher quality than JPEGs, and JPEG files will always be smaller than TIFFs. The main problem with TIFF files is that they are huge, which will cause your camera to slow down when trying to write your images to the memory card loaded into your computer.
That also means that the number of images you can capture in 1 minute will be much less with TIFF than with JPG (and, ultimately, you'll take less photos because of storage limitations). Also, if you're going for the highest quality image you can capture, the RAW format is a much better choice than TIFF, because it is much more versatile and often smaller.
When I shoot with a camera that is capable of saving in JPEG, TIFF or RAW, I usually choose between JPEG and RAW. I use JPG when I either need to fit a large number of images on a storage card (I'm afraid of running out of space on the card), when I'm capturing fast action and need to be able to use a high frame rate, or when I don't want to spend time in Photoshop adjusting my images (I want to give them to a client immediately after shooting).
If, on the other hand, I'm going for the highest quality possible and don't mind having to spend some time in Photoshop adjusting my image and I don't mind that I can't shoot as rapidly as with JPEG, then I'll choose RAW. I shoot in RAW format about 90 percent of the time, but that's just because I mainly shoot landscapes and wildlife. On occasion, I'll switch to JPEG when shooting wildlife because I need to be able to shoot as fast as possible.
Article by Ben Willmore. To learn more about photography, explore the many online photography and Photoshop classes offered here at BetterPhoto.com.