[How to] Encrypt and Password Protect a Folder in Windows 7

Password protecting a file or a folder is something Windows 7 lacks. Though Windows 7 Ultimate offers a whole drive encryption and password protection but you can not set a password for a single folder in a drive. That is why we need some other tools to do the job. Here you will learn how you can encrypt and set password for a folder to prevent unauthorised access.
First we need TrueCrypt a free and open source software that provides disk encryption for Windows, Mac and Linux. Download the software from its website and follow the instructions below. The software is just about 3.5 MB
Once you have installed TrueCrypt on your computer launch the program and follow the instructions below to create your own encrypted drive.

1. You have to create a separate drive within Windows drives to encrypt your files. To do this click on Create Volume button.
   
   

   Create a new Trucrypt Volume

2. Select Create an Encrypted file Container on the next Window and click Next.
   
   

   Create an Encrypted file container

3. Select Standard TrueCrypt Volume in Volume Type options.
   
   

   TrueCrypt volume type

4. Here you will set the location of your Encrypted Disk Volume. Click on select file and browse where you want to save this volume. Give any name you want in the Name field and click Save. Then click on Next on the Volume Location Window.
   
   

   Set your encrypted Volume location

5. Here you can set the Encryption type for the volume. Default is Good, you may change if you want and click Next.
   
   

   TrueCrypt volume encryption option

6. Set the size of the volume. Remember that you can’t increase or decrease this size letter. So be careful and choose wisely.
   
   

   TrueCrypt volume size

7. Set the password. Most important part is, if you forget it you will surely loose your data.
8. On the next screen you will get an option for if you want to store Large(more than 4GB) files in this volume or not. Select yes if you want.
   
   

   Set the Volume format for your drive

9. Next select the Volume format. NTFS is good because you can store any size (almost) of files with this format. Fat file system can’t store larger files on it.
10. Click Format.

Once the format is complete it will Give you a confirmation message for this. Click OK and exit the window. Now you are ready to use this password protected encrypted drive. Every files or folder you place into this drive will become encrypted and can be unlocked only via password or Key files.
To use the drive you just created launch the program again.

1. Select the drive (chose any) where you want to mount your new partition.
2. Select the file (that you created in step 4) in Select File field and then click Mount.
3. It will ask for a password, provide it and you will see your files as a new volume in Windows
4. Now check your My Computer using Windows Explorer. You will see a new Disk Volume there.

Everything in this volume will be encrypted and can be unlocked only using the Password or Key Files you set earlier.
To hide this partition or lock it again, Launch the program, select the drive and click Dismount. Restarting the computer will also dismount the drive.