Encryption is a method of converting information into a coded form (ciphertext). If an unauthorized person tries to view the file, the data in the file is seen as garbled characters and symbols.
When you enter a Password to open, both the password and the contents of the workbook are encrypted. Note that a Password to modify is not an encrypted password. If you only password-protect a file with a Password to modify, your file will not be encrypted.
There are different encryption types that you can choose that offer different levels of security. To make a selection in the Encryption Type dialog box, click the Advanced button either in the Save Options dialog box or on the Security tab.
Office 97/2000 Compatible is selected by default so that people who use Microsoft Office 97 or Office 2000 can open a workbook. If you don't need to have people with Office 97 or Office 2000 open the workbook that you want to encrypt, the recommended encryption level is one of the RC4 encryption types.
If you select any one of the RC4 encryption types, the Choose a key length box is made available. This refers to the length of the encryption key used to encrypt the file. Key lengths begin at 40 and go up to between 56 and 128.
As a rule, the larger the key length, the more difficult it should be for anyone to discover the encryption key. It is recommended that you use the largest key length possible (128 in most cases).
When one of the RC4 encryption types is selected, the Encrypt document properties check box is made available and selected. This option prevents unauthorized people from viewing file properties such as the author name or any custom file information, which they could otherwise do by right-clicking the file and then clicking Properties on the shortcut menu.
The Quick Reference Card contains a link to more information about encryption.
Note The encryption types available in the Encryption Type dialog box depend upon the operating system running on your computer.