Home » Cloud-based vs Local Password Storage: The Pros and Cons
Cloud-based vs Local Password Storage

Cloud-based vs Local Password Storage: The Pros and Cons

A comparison between cloud-based and local password storage, how to pick the best solution, and best practices for using a password manager.

Password storage is vital for maintaining password security because it can secure and protect your sensitive personal or business information from unauthorized access. 

There are two primary types of password storage: cloud-based and local password storage. In this article, we will go through the advantages and disadvantages of each type and cover the most important password storage best practices so you can make a better-informed decision.

Cloud-based Password Storage

Cloud-based password storage allows you to save and manage all of your passwords using a web-based interface or mobile application. Because the passwords are encrypted and stored in a remote server (or the cloud), you can access them from any device or location. 


Cloud password storage offers several advantages, including:

  1. Accessibility: Password storage in the cloud allows you to access your passwords from anywhere, provided you have an internet connection. All your passwords are therefore stored centrally and can be managed conveniently across multiple devices and platforms.
  2. Automatic synchronization: Cloud-based storage can also synchronize passwords across multiple devices, keeping them all up-to-date. In other words, the provider does all the heavy lifting, ensuring the software is always updated and the databases remain accessible. 
  3. Frequent backups: Cloud password managers typically run automatic backups of encrypted user data. In the event of a system failure, for example, these backups will be able to offer some redundancy and ensure your users can recover their data. In other words, cloud-based password management backups reduce the risk of data loss.


As with any technology, cloud password storage also has some downsides you should keep in mind should you choose this route:

  1. Reliance on the internet: An internet connection is mandatory for accessing cloud-based password storage. If you do not have one, you simply won’t be able to use the solution. 
  2. Potential security risks: There is a potential risk of data breaches when storing passwords on cloud servers. For example, if the cloud password manager has security vulnerabilities. This is why it’s important to only work with reliable providers with excellent security track records. 
  3. Privacy concerns: Lastly, there are some concerns regarding third-party access to sensitive information, as your passwords are stored ‘somewhere else’ than your devices. This highlights the importance of selecting a trustworthy provider.

Local Password Storage

Local password storage, or an offline password manager, stores the information directly on your device (for example, your computer or smartphone). Typically, the data is encrypted and saved in a database that can be accessed using a master password or another authentication method. This storage option is self-contained.


Local password storage offers several advantages, too, including:

  1. Enhanced privacy: A password manager without cloud storage minimizes the risk of unauthorized third-party access because all sensitive information is kept solely on your device/s of choice.
  2. No reliance on the internet: Unlike cloud solutions, a password vault local storage can be accessed without an internet connection. 
  3. Full control over data: Local password storage gives you complete control over your password data and backups. For example, you can choose what information to keep and how often to make security copies of your data. 


A password manager with local storage also has some downsides. For instance:

  1. Limited accessibility: Because all your passwords are stored locally, you will have to go through the inconvenience of accessing them only on the device where they are kept.
  2. Risk of data loss: Local password storage also involves a risk of device failures, theft, or damage, all of which can lead to potential password data loss.
  3. Lack of synchronization: Keeping passwords updated across multiple devices when using local storage can be challenging, as most data transfers will need to be done manually or using a separate tool. 

Making an Informed Decision

We have covered the advantages and disadvantages of both cloud-based and local password storage solutions. Now, it’s time to decide: Which is best for you? 

Well, the answer will actually vary depending on what the specific needs of your business are. So, here are some things to keep in mind when choosing a local or a cloud password storage solution. 

  1. Personal preferences: One of the most important factors when choosing cloud vs local password storage is your individual preferences and priorities. For example, if you want to have complete control of your sensitive information, a local solution could be great. However, if you want to have your passwords synced on all your devices, a cloud-based one would be a better choice, as the platform will take care of all things for you.
  2. Security requirements: It’s also essential to always weigh the security risks associated with each type of storage. For example, should you store passwords in the cloud, make sure you choose a solution that has a proven track record of security and privacy, and provides effective support. And, if you go local, never lose your master password! 
  3. Accessibility and convenience: Lastly, the desired level of accessibility and convenience can also influence your choice between cloud-based and local password storage. For instance, the former would be better if you don’t want to maintain your own software, as the provider will take care of it alongside backups and database syncing. So, a cloud-based solution tends to be a good choice for those less tech-savvy and looking for a reliable and easy-to-use program.

A Note on Password Storage Practices

Password storage is a vital component of security, so make sure you always follow the best practices to protect your sensitive and business information from unauthorized access. 

You might be asking yourself: Is storing passwords in the cloud safe? What about locally? Security is, ultimately, how you want to shield against threats. Both types of applications offer good security (such as end-to-end encryption), so in most cases, the weakest link will be the user and not the solution itself. 

The best practices for password hashing and storage will involve using a strong master password, enabling two-factor authentication, and more importantly, choosing a reputable password manager that supports both strong encryption and regular backups. 

Final Thoughts: Picking The Best Password Storage Option

When comparing cloud vs local password storage, we’ve seen that, as it happens with ant technology, each has benefits and downsides. 

For example, while cloud-based solutions are more accessible and offer automatic synchronization, they also rely on an internet connection and must be trusted to keep sensitive data protected and private. On the other hand, local password storage can enhance privacy and give you full control over your data, but you will have limited access to your passwords and might need to do frequent manual synchronizations to keep your devices aligned. 

In summary, both cloud password storage and local password storage both have their pros and cons. However, what’s more important is that using a password manager is always more secure than not having one! 

If you are looking for the perfect solution, you should always carefully consider your specific needs, priorities, and preferences to determine the most suitable password storage solution for you. 

Uniqkey is a convenient business password manager designed for teams and businesses. Our solution eliminates password-related risk, empowers your IT admins with full centralized control and visibility, and can help you save time and boost productivity. Contact us today to book a demo


Uniqkey is the perfect password management solution for teams and businesses. Built with high usability in mind, Uniqkey makes it easy for employees to adopt secure password habits, raising company-wide security in a simple and effective way.