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BMP (Bitmap Image File) is an image file format developed by Microsoft, commonly used for storing two-dimensional digital images in a wide range of color depths. While BMP files are capable of storing detailed images without any compression—preserving the original quality—they often result in large file sizes, making them less ideal for web usage or sharing.

PSD stands for Photoshop Document, and it is the default file format used by Adobe Photoshop, a popular image editing software. PSD files support multiple layers, allowing for rich image composition and editing. They can store an image's individual layers, text, masks, transparency, clipping paths, and other settings, which are all editable within Photoshop. This format is widely used by graphic designers, photographers, and artists for creating and editing complex images and digital art.