Create password-protected file vaults

[Hack5190]

Expanding on recent threads about Hard Drive Encryption and Secure File Deletion it seems like a good time to present password-protected file vaults.

Apple first provided this functionality in OS X 10.3 - the good news is that file vaults are compatible in versions of OS X up to (and including) 10.11

Let's create a file vault (image attached for reference)!

1. Open Disk Utility.
2. Click the New Image button, or choose File > New > Blank Disk Image.
   
3. Type a name in the Save As field. This name will be used for the disk image (.sparseimage) file.
4. Change the save destination if you wish.
5. Select a size for the disk image file from the Size pop-up menu.
6. Choose a different volume format if you don't want to use the default Mac OS X Extended (Journaled).
7. Choose 128-bit AES encryption (and/or 256-bit AES in Mac OS X v10.5 or later) from the Encryption pop-up menu to encrypt the image's contents with a password. If you don't choose an encryption, your new image won't be encrypted.
8. Change the image format to Sparse Disk Image. A sparse disk image will only consume the amount of storage used by its contents, however it can expand to the maximum size selected in step 5.
9. Click the Create button.
10. Enter and verify a good password in the dialog window that appears. This password will be saved in your keychain unless you deselect "Remember password (add to keychain)".
11. Click OK.

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You will be prompted for the password each time you open a file vault.