7-Zip's encryption facility protects sensitive documents from unauthorized viewing. The contents of the files that you want to protect are encrypted based on a password that you specify.

To setup a password for ZIP file, please follow the steps below (screen capture based on 7-Zip):

1. Select the file(s) you need to compress. Then right click the selection and choose "7-Zip" -> "Add to archive..." from the menu.
   
2. Make sure to choose "zip" for the archive format. Then enter your password (We highly recommend to set password with more than 8 characters which consists of alphabets and numbers), and choose the "Encryption method" you prefer. Then click "OK".
   
3. Now the file is encrypted with password. To open the file, you will need to provide the password.
   

Note:

• 7-Zip uses password-based encryption, and even a strong encryption algorithm like AES is of little or no benefit if the passwords you use are weak, or you do not keep track of them in a secure manner.
• In particular, encrypted files can be deleted from a Zip file, or renamed within a Zip file while new, unencrypted files can be added to a Zip file without a password.
• For details on AES encryption method, please refer to http://en.wikipedia.org/wiki/Advanced_Encryption_Standard from Wikipedia.