No, attempt to open a chest and it will prompt for you to use that password. Once you unlock the chest it will stay unlocked for you until you log out. Entering the password before that is pointless.
As for creating the passwords, by default all chests you create are private to you, a password is pointless unless you intend to share the contents.
The commands:
/cremove to remove protections, type in command then punch the chest.
/cpassword (password) to add a password to a chest which has no protections.