I have a Seagate external hard drive that I use for backups – can I password protect this drive? How?
used and tested folder Lock Software
encryption is probably your best bet.
T r u e C r y p t
AxCrypt File Encryption for Windows
You can install Folder Password Expert USB right on the external drive and set a password on your backup folder. You can download free trial from http://www.folder-password-expert.com/usb.html
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miTracker File Secure Free
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What is the BitLocker To Go Reader?
You can use Folder Lock Lite software to protect the backup folder or LocK-A-FoLdeR.
Also,have a look at some of the suggestions provided by Microsoft Community which suggests using Truecrypt,BitLocker etc.
Try this, it has plenty of options including external drive lockup:
Depending on the backup software you are using, you can probably assign a password to encrypt the backups you are making. If you don't want to go that route, one of the easier ways to do this would be to use TrueCrypt to encrypt the entire drive.