A couple of years ago I lost a USB stick with 4 GB of data.
Included on that drive were financial files that included my Social Security number (#AAA-55-1234), birthdate, full name – easily enough to steal an identity. The USB stick re-appeared.
I did some research on encryption. I settled on a 100MB file container, encrypted by Truecrypt, within which any sensitive information lives. Truecrypt is effective, free, runs on Windows, Linux and Apple. I can put that file container on dropbox for backup purposes, leave it on laptops and on the USB stick and backup USB drives. Non of that makes that data insecure – except when it is mounted as a drive in use, it is not accessible. Tax info, any bank information, all of that can stay in that encrypted container. If I lose the USB stick it is just a USB stick, easily replaceable.
KeePass was the solution to another problem – many passwords, many usernames, and the passwords to be secure needed to be different and random and long.
KeePass encrypts a database with a single memorable passphrase. Within that database you can keep all of your passwords. KeePass also allows you to set and generate really really good passwords – set number of characters, rules, special characters, capitalization, etc. For online banking passwords this is outstanding – no memorization, just cut and paste a really long random string.
I keep the KeePass database and backups encrypted in the Truecrypt container…
—doug