Hi chaitanya

If you have to deal with sensitive data in general, first try to
think about your approach. Is encryption the only way? Or is
it one of many "lines of defense"? The decision is based on a
lot of input factors, such as the value of the asset, cost of
the security measures implementation, cost of their maintenance
etc.

What is the environment we are talking here about?
Single-person-single-PC, small company - LAN, ... ?
Are there company wide regulations, policies? Is there a centrally-
managed "secure" server? Do you need to transfer sensitive files?
etc.


Just a few thoughts to the most likely scenario: You are working
on a PC, which can be accessed by other persons.

First, do you have to store the file locally? What about a (portable)
medium only you have access to, like, if the asset's value is not high,
a memory stick? Just make sure, nobody steals it

First, I would try to restrict the access to your files, if supported
by the OS you are running.

First, if you have to encrypt a file, use a standard encryption
algorithm, like AES or 3DES. One free tool supporting all this
and much more is gnuPG[1]. It is not the simplest one to use,
but an allrounder.

I have seen sometimes files which show small black squares and/or special symbols when you open it. I guess they are encrypted. I would like to do something like that.
Maybe these indeed are encrypted files, but you see the same effect
when you open an executable in notepad or word. A file, no matter what
file-type it represents, in the end is a bunch of bytes (numbers between 0
and 255). Some of these numbers correspond to letters, digits or punctuation,
others don't. Notepad is a very simple text-file reader, but you can open
any type of file. So, if it does not know how to handle a certain "byte", notepad
replaces that "number" with a little square.


Cheers.

[1] http://www.gnupg.org/(en)/features.html