Convertible notes, SAFEs and Preferred Stock are all different securities that a company can sell to investors to raise money. What type of security you sell will depend on the stage of your company and what securities your investors are interested in purchasing.
SAFEs, or Simple Agreements for Future Equity, are very popular among early-stage companies. A SAFE is an agreement pursuant to which an investor pays cash to the company now in exchange for a promise of preferred stock later--when the company does a preferred stock financing--on favorable economic terms. A SAFE does not accumulate interest, has a very simple set of representations and warranties that the company gives and generally requires very little legal negotiation once the terms of conversion of the SAFE are decided. Companies and investors alike appreciate that SAFEs don't require very much negotiation.
Convertible notes are debt instruments that include standard debt terms (such as an interest rate, a maturity date, and a liquidation preference senior to all of the company's stock). Unlike traditional debt, however, convertible notes automatically convert to preferred stock if the company undergoes a bona fide preferred stock financing. Convertible notes offer investors downside protection while granting them the upside of holding stock if the company is successful enough to have a preferred stock financing.
Preferred Stock is an equity instrument which is convertible into common stock, and thus shares the upside of common stock, but also includes protections for its holders including--most often--a liquidation preference, rights to elect members of the board of directors, and a right of first offer on future securities issuances for major investors. Negotiating the terms of a preferred stock financing can be costly for both the investor and the company but can be advantageous for an investor as they often receive additional rights in a preferred stock financing such as registration rights and pro rata rights for future financings and investors receive the benefit of fulsome representations and warranties from the company.