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Png is okay for overlays, but Jpeg is probably best for cover images, as it will convert easily later if you change formats.
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Don't convert anything from JPG. It's already compressed and if you compress it even further it will start to look terrible. Here's what I mean (
link). All those artefacts will stand out when you convert from a lossy format to another lossy format.
Go with PNG if the image is pretty much flat with a low colour count and no gradients. And always keep the original .psd file (Photoshop) or .xcf (Gimp) as they contain the layers, text effects, etc. Who knows, maybe you'll wanna change something in the second edition or use the same effects for a second novel.