I am using Photoshop CS6 to create a banner of size "500X420" and used resolution 300 PPI. But when i save the image. It looks pixelated around text and object on the image. Please see attached image below.
Kindly help me for this.
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500x420 is the only thing that matters. PPI has no effect on the image in this case because its completely dominated by pixel count. Pixelation (AKA aliasing) is just because you've zoomed in too much. Either you do not want a image at 500x420 or you want the image to be smaller. Your call.
Ok, its been brought up that you might mean the compression artifacts. This is a feature of jpeg compression. The more you compress the more they show up. Ideally you would use something like save for web to preview them. But many distribution networks may compress images if they are larger than some size so you might not have any choice. Ideally you would compress pictures with big uniform areas with a different algorithm like the one used by a PNG image