FreeOTFE is a free disk encryption software that can encrypt files and folders on disk drive. You can use multiple encryption algorithms for encrypting files. Also, you can choose a password, as well as keyfile to provide additional security for encrypted files.
We have reviewed many file encryption software earlier, but FreeOTFE follows a completely different approach. It creates virtual drives on your disk. When you add any file to that virtual drive, the file is automatically encrypted. Any program can read and write any of those files easily as long as you authorize that. Once you are done with your work, you can just unmount the virtual drive, and then no program will even be able to see any of the file, and all the files will be securely stored inside an area of the disk that itself will look like a big file.
FreeOTFE is quite easy to use. You download and run the FreeOTFE client. There is no need to install it. Then you create one or more virtual drives. While creating a drive, you can specify password and keyfile to be used with that. To start using one of those virtual drives, just run FreeOTFE, and mount that virtual drive. This will expose all the files in that drive to all the programs, and you will be able to see that drive as just another partition in Windows Explorer. Once you are done with your work, just unmount the drive, and all the files inside it will be secured, and no one will be able to see the files inside that virtual drive.
You can even install FreeOTFE program itself on a USB drive, so that you do not run the risk of leaving the program on the same computer which has the virtual drive (of course, the program itself is not enough to unecrypt the files, as password is also required).
When you unmount a virtual drive, FreeOTFE also clears the memory, so that any sensitive information stored in the memory is wiped out. Here is a nice getting started guide for FreeOTFE.
FreeOTFE is completely free, and a really secure way to encrypt files and folders. The best part is that you do not have to worry about encrypting each file individually; just move files to the virtual drive, and they will be automatically encrypted.