Above: A very creative YouTube video thumbnail, YouTube supports up to 1920X1080 thumbnail sizes, though 1280X720 is the optimal. Its important to create a striking, eye catching design that best describes your video, and prompts viewers to click and watch it. Misleading or unrelated thumbnails are widely used to draw attention but frowned upon and could get your video removed if it receives enough complaints from audience members.
The thumbnail is used across YouTube and the web, in various sizes (predominantly small) so ensure any text used is fairly large and legible.
You can read YouTube’s thumbnail guide here.