Disk Image Help

[Steven & Carol Soloski]

I have an M2 MacBook air with 1TB internal SSD. I have just about filled it up so I purchased a 5 TB Seagate HDD. I reformatted the drive for Mac and partitioned it into a 2 TB partition for Time machine and 3 TB to offload stuff. Prior to offloading, I wanted to set up a password protected folder to archive sensitive data, but have failed several times.

On the blank 3 TB partition, I created a new folder and named it.
Using Disk Utility I go to File/new image/image from folder
Choose the folder I created
Leave the image name suggested and select 256 bit encryption
In the popup, I entered a password 2x and hit choose
I left the image format as compressed and and then hit save
I get a message “operation failed: operation not permitted. With a sub message of operation failed with status 1.

Anybody have any suggestions how to make disk utility work or so alternate method for creating a password protected folder to archive sensitive data?

Thanks

Steve s

Sent from my iPad