If you wish to restrict access to an Excel workbook, or if you wish to deny editing privileges to other users, consider adding a password to the workbook as a security measure. Excel allows users to encrypt and password-protect workbooks. To do so in Excel 2010, click File, Info, Protect Workbook and select Encrypt with Password, as shown in Figure 1. For those using Excel 2007, click the Office Button, select Prepare, and then click Encrypt Document.
Figure 1 - Encrypting a Workbook from the Office Button
In the Encrypt Document dialog box, type a "long and strong" password and click OK. Confirm the password and click OK again to complete the process. In default, Excel 2007 and Excel 2010 workbooks are encrypted using 128-bit AES encryption. Assuming the password meets the "long and strong" requirement, it is highly secure and not likely to be broken. Entering a password in this fashion requires any and all users to know the password before they will be able to open the workbook.
Additionally, you may enter a password on a workbook in order to restrict other users' ability to edit the workbook. This "read-only" password is independent of the password described above and does not encrypt the Excel workbook. As such, do not view this password as a means of securing sensitive data, but rather as a means of restricting others' ability to edit a workbook.
To establish a "read-only" password, from the Save or Save As dialog boxes, select General Options from the Tools drop-down menu to open the General Options dialog box pictured in Figure 2. There, in the Password to modify box, enter the password you wish to use to restrict editing rights. Upon establishing this password, users will need to enter it in addition to the Password to open if they desire to open and to edit an Excel workbook.
Figure 2 - Excel's General Options Dialog Box
Password security in Excel allows you to establish up to two separate passwords for each document. One encrypts the workbook and must be known by any users desiring to open the document. The second allows you to restrict editing rights to only those who know and successfully enter this password. Using these two techniques in tandem provides you with a great start on securing your sensitive Excel data.
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