To protect files and folders on your computer, you can encrypt them. Encryption scrambles the data so it cannot be read without a key. The key can be a simple password, a really long string of numbers or a physical device external to the computer, such as a smart card/reader or USB token.
Microsoft Windows has built-in encryption for files or folders tied to the User Account login access. This is only useful if you are using password-protected User Account security. If others can access the computer with the same user name, or if you do not use a password, he or she will still have access to the data. To encrypt a file or folder, just right-click the folder, select Properties/Sharing and then check “Make This Folder Private.” Make a backup copy of the encryption key Windows creates, so you can decrypt the file if your hard disk or system fails. See Windows Help for instructions.
Individual files in many applications can be protected by a password when you save them. In Microsoft Word for example, select File/Save As/General Options (or Tools/General Options in newer versions) and enter a password to open or modify the file.
There are also many file encryption programs available that enable you to password protect files and folders. Some anti-virus and anti-spyware products also include file encryption capabilities. For business users there are more secure solutions such as USB token-based file encryption. This provides very strong encryption, and it can be removed from the computer to completely prevent anyone but you from gaining access to your encrypted folders or disks.