Nowadays, there is a drastic increase in demand for data storage. Due to increasing demand for data storage, the concept of cloud computing is on the rise. This enormous amount of data can be backed-up on the cloud storage but, the problem is that it significantly increases the cost of the storage and its performance. Traditional storage process of data introduces redundancies and hence concept of Data deduplication is developed. Data deduplication is an effective solution for eliminating the redundancies. It uses the concepts of hash values and index tables which help in removal of duplicate data. With the use of Data deduplication process, an effective performance increase and reduction in cost of storage can be observed. In this paper, we have discussed different data deduplication methods considering their advantages and disadvantages. We have also proposed enhanced security method for generating data chunks by using standard encryption method.