You can add a password to any Word, Excel or Powerpoint file. To do so, click File, Info, Protect Document, then Encrypt with Password
Depending on what Office program you are in the Protect Document option (for Word), may show Protect Workbook (for Excel) or Protect Presentation (for Powerpoint).
Enter a password and click OK. You will then be asked to re-enter the same password.
You'll now see that the document is password protected on the Info screen
Remember to click Save to save the document
Now, when you try and open the document, you'll be prompted for the password.
How to remove a password from a document
To remove a password from a document, click File, Info, Protect Document, then Encrypt with Password
You'll see dots shown in the password field to indicate there is currently a password assigned to the document. Simply delete the dots (the current password) and click OK.
After you click OK, the Protect Document item will no longer have a yellow background.
Click Save to save your changes.