How do I encrypt my data file and create a password?

If you are using Moneydance 2014 or earlier -

Moneydance can encrypt your data file for increased security.
To encrypt, click File → Encryption and then follow the steps as prompted.

To store passwords for your online banking Direct Connect enabled accounts, you must encrypt your data file. If you would like Moneydance to remember your passwords, select the “Store Online Passwords in File” option.

If you encrypt your data file, your backup files will also be encrypted.

Encrypt.jpg

If you are using Moneydance 2015 or later -

In Moneydance 2015 everything is encrypted all the time. There is not an option to enable encryption because it is impossible to disable encryption in MD 2015.

You can set a Master Password within File --> Passwords, and can store passwords for your online banking Direct Connect enabled accounts by selecting the “Store Online Passwords in File” option.
You may need to enter your Direct Connect passwords once more after enabling this, before they're stored.