Secure Folder is a free software that can password protect, hide, lock, and encrypt folders with AES Encryption. This is a small application to secure your folders that is easy to use, and very secure. This application uses AES encryption to password protect folders, that is difficult to break.
Update: (July 06, 2013) Secure Folder is no more available in free version. To purchase or try it, click here. Other similar freeware you can refer: IOBit Password Folder.
Secure Folder has a simple to use interface where you can select the folders that you want to lock and/or hide. You can choose whether you want to just Lock a folder, or Hide as well. Good thing about Secure Folder is that it lets you lock and hide multiple folders together, instead of working on one folder at a time.
Other applications to secure folders that we reviewed earlier include: My Lockbox, Hide Folders, and we also covered how to password protect applications.