What Is a Password Vault and How Does it Work?

Updated on September 30, 2024.

A password vault, also called a password manager or password locker, is an encrypted digital vault that stores login credentials, documents, images and other sensitive information. To access a password vault, a user needs to authenticate their identity by entering a master password or using their biometrics. 

Continue reading to learn more about password vaults, how they work and the benefits of using one.

How does a password vault work?

A password vault works by using data encryption to protect the stored information inside the vault. Encryption is what turns readable data into an unreadable format known as ciphertext, preventing anyone, even computers, from being able to read the encrypted data. A password vault can only be unlocked using a master password or the user’s biometrics such as Face ID. Once you unlock your password vault, you can access everything stored in it, such as your login credentials, files and credit card numbers.

Browser-based vs dedicated password vaults: What’s the difference?

One of the biggest differences between browser-based and dedicated password vaults lies in their security. Dedicated password vaults were designed with security and convenience top of mind, whereas, browser password vaults were only designed for convenience. 

Browser-based password vaults such as those offered by Microsoft Edge or Google Chrome store your login credentials and autofill them when you’re on a website just like dedicated password vaults. However, browser-based password vaults are not as secure and only work on the browser of your choice. For example, if you use Google Password Manager, you can’t access your stored passwords on another browser like Firefox. 

Although browser-based password vaults use encryption, they are vulnerable to being compromised if your browser or device becomes infected with malware. Additionally, because users typically stay logged into their browsers, this introduces a major security risk if you were to lose or have your device stolen because this means they would be able to see all of your stored passwords in plaintext. 

The benefits of using a dedicated password vault

Here are some of the benefits of using a dedicated password vault. 

Requires a master password

Almost every dedicated password vault requires you to create a master password. Your master password acts as the key to enter your vault and is the only password you need to remember to access all of your saved credentials. Since a master password is required to gain access to your vault, it helps protect your data from unauthorized access. 

Offers extra security with MFA

Another benefit to using a dedicated password vault is that you can also secure your vault with Multi-Factor Authentication (MFA) which adds extra layers of security. MFA requires that you verify your identity with one or more methods of authentication, in addition to your username and password, helping to further protect your accounts against unauthorized access. 

Uses strong encryption standards

Because dedicated password vaults were created with security top of mind, they use strong encryption standards to protect their user’s data. For example, Keeper Password Manager secures all stored data using AES 256-bit encryption and Elliptic-Curve Cryptography (ECC), which is considered to be one of the most robust encryption in the cybersecurity industry. Additionally, Keeper is a zero-knowledge security provider and ensures that all data is encrypted and decrypted locally on the user’s device. 

Is cross-compatible

Almost all dedicated password vaults are cross-compatible, meaning you can access your vault from anywhere regardless of the device or browsers you use. This makes it convenient for you to access your login credentials and other stored data from wherever you are, no matter which Operating System (OS) you use. 

Can store 2FA codes

Some dedicated password vaults allow you to store more than just passwords. For example, the Keeper Vault enables you to generate and store Two-Factor Authentication (2FA) codes straight from your vault, making it easy to protect your online accounts with 2FA. This not only adds more security to your accounts but also simplifies your login experience since you won’t have to juggle between multiple applications to verify your identity.

Are password vaults safe?

Yes, password vaults are safe, however, it’s important to pay close attention to the security features and reputation of the password vault provider. Some password vaults, like LastPass, have a history of being breached. However, this does not mean that all password vaults are insecure. For example, Keeper is dedicated to providing its users with the best security and ensures that only the user has access to their stored data while ensuring all data is end-to-end encrypted. 

If you’re planning on looking for a password vault to store your information, be sure to research its security architecture and reputation before trusting it to store your data.

Choose Keeper as your password vault

Password vaults make managing your credentials and logging in to your accounts a seamless experience while ensuring that your data remains secure at all times. By investing in a dedicated password vault you can take a step toward enhancing your online security without having to worry about password fatigue or vulnerability. 

Curious to see how a dedicated password vault can help you stay safe online? Start a free 30-day personal trial or 14-day business trial of Keeper today.