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File Security,

I had a confidential file and would like to archieve it. What is the best way to secure the file?
I am thinking to convert it to zip or rar and add a password?

do you think it is secure?
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You can also change permissions on it or use third party software, but depending on how secure you want it the method you described should be sufficient.
Here are couple of sites to get free third party software
Winzip have AES encryption facility into it.

It think a good ZIP password with AES, should be more than enough.
Depends on how convenient (or inconvenient) you want it to be for someone to open the file ...

if you want any windows user to be able to open the file with the right password, use .zip.  This does NOT encrypt file names, so the user could open the zip and see the WhyJohnShouldBeFired.doc file, but winzip supports 128/(256?) AES encryption (which is the current standard).

i use .zip files for when i want other people to be able to open the file, or else I use a format (like .rar or axcrypt's format) that can package the file in a self-extracting .exe

.rar encrypts not only the files but the file names so, if you don't have the password, you can't see the file names.  you can use WinRAR [http://www.rarlab.com/] to make .rar files, and it will ALSO make/encrypt .zip files.  rar also uses AES-128

axcrypt is a file utility that i usually install on my PCs.  it provides an easy way to encrypt/decrypt files (right click > axcrypt > encrypt / right-click > axcrypt > decrypt).  it also uses AES-128

*If* you just want to encrypt plain only text, i strongly recommend using LockNote [http://locknote.steganos.com/].  Imagine a password protected .txt file and you end up with LockNote.  It's a small .exe that holds encrypted (AES-256) text within itself.  It's very cool and, most importantly, VERY easy to use.

If you want some hardcore encryption, check out TrueCrypt [http://www.truecrypt.org/].  I use it to encrypt USB drives and things like that.  It's easy to make a TrueCrypt file that can contain any number of other files, using ridiculous encryption (my preferred method encrypts the data 3 times using 3 algoriths that were all candidates for AES, including the winning algorithm).  The learning curve for TrueCrypt is probably a little higher for your everyday user, though.  So I recommend the above solutions first.
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