Running FileVault on an External Hard Drive

Use the following steps to encrypt (and decrypt) external disks from the Finder.

1. Open a new Finder window and select the external drive you would like to encrypt from the panel on the left, under Devices.
2. Right-click (or two-finger click, or control-click) on this disk in order to bring up a contextual menu, and then select Encrypt "External Drive Name"...
3. When prompted to create an encryption password use a strong password and enter it twice, along with a password hint, and click Encrypt Disk. The password be different front the Admin User Account.

Result: The external disk will begin to encrypt, however, there is no progress bar to show you the process of the encryption, which could take several hours for large disks. Once encrypted, when you next plug your external drive in, you will be prompted to enter the password you created earlier and click Unlock in order to unlock the disk.

There is no status bar, true, but you can see if the encryption process is still running by left-clicking - or control-clicking - again on the disk in question and, if it's still in process, it'll say "encrypting xxxx"

FileVault—View progress when encrypting a drive