For organizations with multiple online accounts, tightening company security should be a top priority to prevent data breaches or theft. The first step to avoiding a data breach is creating unique passwords for your accounts. But suppose you’re like many people who resort to reusing their old passwords to create new accounts. In that case, it’s safe to say that it’s only a matter of time before your data and online accounts are compromised. And by extension, once your overused passwords are discovered, all the accounts associated with them are at risk. One way to solve this problem is through password managers — tools that help you generate unique, secure, complex passwords and store them in a vault for easy access. Password managers secure account credentials, making them difficult to hack. Here is a guide to how password managers work and how you can choose the best one to tighten your company’s online security. NordPass Employees per Company Size Micro (0-49), Small (50-249), Medium (250-999), Large (1,000-4,999), Enterprise (5,000+) Micro (0-49 Employees), Small (50-249 Employees), Medium (250-999 Employees), Large (1,000-4,999 Employees), Enterprise (5,000+ Employees) Micro, Small, Medium, Large, Enterprise Features Activity Log, Business Admin Panel for user management, Company-wide settings, and more Dashlane Employees per Company Size Micro (0-49), Small (50-249), Medium (250-999), Large (1,000-4,999), Enterprise (5,000+) Micro (0-49 Employees), Small (50-249 Employees), Medium (250-999 Employees), Large (1,000-4,999 Employees), Enterprise (5,000+ Employees) Micro, Small, Medium, Large, Enterprise Features Automated Provisioning ManageEngine ADSelfService Plus Employees per Company Size Micro (0-49), Small (50-249), Medium (250-999), Large (1,000-4,999), Enterprise (5,000+) Any Company Size Any Company Size Features Access Management, Compliance Management, Credential Management, and more What is a password manager? Keeper password manager desktop interface. Image: Keeper A password manager is a tool that helps you generate, store, and manage passwords or credentials online. It uses encryption to protect the stored credentials and allows you to retrieve them using a master password. The idea behind this technology is to enhance security by promoting the use of unique, strong passwords for different services. This helps reduce the risk associated with password reuse and simplifies the process of managing multiple login credentials. How do password managers work? While many browsers feature a basic password manager, only a top-tier third-party password management application can offer you robust security and convenience through features like password generation, VPN, dark web monitoring, encryption, and two-factor authentication. While you can simply add password managers to your browsers as an extension, the first step to using many password managers is installing the client on your computer or mobile device. To install a password manager on your mobile or desktop, follow these simple steps: Download the password manager program. Open the app and create a master password for your vault. Add the password manager extension to your browser. Log into your accounts. Change your existing passwords. When your password manager is active, instead of manually entering the password on websites, the password manager, through the extension, prompts you to input your master password to access your unique passwords. This master password serves as the key to unlocking the encrypted vault containing all stored passwords. If you have already logged into the password manager, it seamlessly auto-fills the required login information on the website, sparing you the need to recall individual details. If you want an in-depth video explanation on password managers, we’ve got you covered. Check out our Password Managers 101 video feature on the official TechRepublic YouTube channel that’s available to view right now. In this video, we look into the features and benefits of password managers, how safe password managers are to use and who should invest in password manager solutions in the first place. More about Cloud Security Types of password managers While different password management solutions serve similar functions, their key features and modes of operation distinguish them. Below are three popular categories that can be valuable for your organization. Locally installed or offline password managers These are desktop-based password management solutions that store your passwords directly on your device, such as a laptop. These passwords are typically secured within an encrypted vault, enhancing the security of your sensitive information. Unlike cloud-based alternatives, locally installed password managers do not rely on external servers to store or manage your passwords. The advantage here is that your passwords are not accessible from any other device unless they have been synchronized with the device. This local storage approach provides you with a high level of control and privacy if you prefer to keep your data away from public networks. Popular examples of offline password managers are KeePass and Enpass. Both password managers allow users to store their credentials directly on their machine, without having them synced or stored on the cloud. Saved logins in KeePass. Image: KeePass However, it comes with a trade-off: If you were to lose the device where the password manager is installed, you would also lose access to all the stored passwords. Some password managers, like 1Password, Keeper, and Dashlane attempt to strike a balance between privacy and convenience by offering features that allow you to create multiple password vaults across your devices. These vaults can be synchronized when you connect to the internet. This enables a certain degree of flexibility while still maintaining a primarily offline storage approach. This way, you can benefit from the convenience of syncing your passwords across devices without entirely relying on external servers for data storage. Web-based or online password manager services These password managers operate on a cloud-based model, where encrypted passwords are stored on the service provider’s network. In this context, the service provider assumes direct responsibility for the security of your passwords. Programs like 1Password and NordPass exemplify cloud-based password managers. The key advantage of these services lies in their accessibility — you can reach your password vaults from any device with an internet connection. NordPass vault synced to the cloud. Image: NordPass Web-based password managers typically come in various forms, commonly as browser extensions, desktop applications,