Step 1:
Select File > New and select a new canvas of width 150 px and height 100 px and press ok.

Step 2:
Now create a new layer and Select the Rounded rectangle tool to create a shape like this. Then on the layer floating menu press ctrl+click to make the selection. Then create a new layer and delete the previous layer(shape layer). Now fill up the selection with red colour.

Step 3:
Now with the selection still on go to Layer > Layer Style > Bevel and Emboss and select style as Inner Bevel technique as Smooth and Depth as shown here.Now the button looks like this. As you can see some 3d effect now. Now we need to improve the effect so that it looks more 3D.

Step 4:
Let's add some shadow to the button to give it some depth. To apply shadow go to Layer > Layer Style > Drop Shadow.. . Here make the following setting as shown in the image. Now you can see that our button has got more depth.

Step 5:

Now Let's add some Inner shadow. Use the following settings as shown in the figure. Now with this step we are finished. Our button looks cool now .

Here is our button ready.