Password Managers vs Encryption Tools: What Actually Protects Your Files?

While we all want the same thing: to keep our digital life private, safe, and secure, and out of the wrong hands. But somewhere between data breaches, phishing scams, and scary notifications that claim your passwords have been exposed, things get extremely confusing and stressful.

The question is: which one is better, password managers or encryption tools?

The short answer is both; the long answer is that they are both good, but for different purposes.

In this short blog, we are diving into understanding the difference between the two, what actually protects your files, and what complements the protection of your files.

Most times, the solutions we get might be the best, but they might not serve the problem that you are trying to solve.

Before choosing a data security tool, it always helps to ask one simple question:

Are you trying to protect your login details and credentials and other necessary keys that would help you access your data?

Or, are you trying to protect sensitive files and folders and limit access or grant access to authorised users only?

Password managers and encryption tools operate in different ways, and when you use them correctly, you enhance your data security practices.

It's pretty simple if you look at it this way. You opt for a password manager to carry all your credentials and passwords, and maybe even notes and card details, safely and securely. And when the time comes when you want to share it with somebody, you can securely share it through an app like AxCrypt.

To begin with, a password manager is built for one main job: managing credentials safely and securely. Password managers are what you would use to generate stronger passwords and avoid using the same password everywhere.

As for the AxCrypt Password Manager, you can generate passwords that are strong and unique, and you can also store important passwords with this feature.

What's more, you can also share these passwords securely through the app, which protects your information with AES-256 encryption. Another feature of the AxCrypt Password Manager is that you can also store important notes and card details and share them too.

How to Use the Password Manager Feature?

1. Download and sign up if you don't have an account. If you do, log in with your AxCrypt ID and password.

2. Once you have signed in, navigate to the left on the homescreen and click on Password Manager.

3. Click on the small plus sign on the upper right side of the screen. You will receive three options, namely Password, Card and Notes.

4. Click on the desired option. For example, Password. You can now enter the details and hit save. You can do the same for the other options, too.

How to Share Passwords Securely Using the AxCrypt Password Manager Feature?

1. Click on the password you want to share.

2. Scroll down and enter the email ID that you want to share your password with. You can also choose the duration of time you want the password to be shared.

3. Click on add and then click on apply.

4. An email will be sent to the person you shared the password with.

5. If they are not a registered user, they will have to sign up and verify themselves before accessing the shared password. If they are an AxCrypt user, then all they have to do is log in, go to the Password Manager and navigate to the shared passwords. Once they click on the password, it will be visible to them.

Note: The person you shared your password with can delete it from their side, but it won't be removed from your account. When they delete it, they lose their access, but you still keep the password saved.

Password managers address human problems such as reusing passwords, forgetting passwords, or taking shortcuts.

These features strengthen your account security by helping remove those bad habits, which is powerful.

But here's the kicker!

Password managers protect access to accounts, but they do not encrypt your files or stop someone from breaking into your device.

In a time and age where AI can assist brute-force attacks and password-spraying attacks, having a strong password is never the only solution.

File-level encryption provides an additional layer of protection for your actual data.

To summarise, encryption tools such as AxCrypt work on a granular level. This means that, beyond protecting access credentials, file encryption protects your files using AES-256 encryption.

If someone wants to get access to your device, cloud storage, or the USB drive that carries all your sensitive information, encryption helps ensure that the files remain unreadable without the required decryption key.

With AxCrypt, someone may be able to access an encrypted file on a compromised device or storage location, but they cannot read the protected contents without the necessary key or credentials.

Want to know more about how to encrypt and decrypt your files with AxCrypt?

You can read and watch all about it in our guides.

Password managers and file encryption solve two very different security problems, but when both come together, they can form a layered security approach.

While password managers protect authentication by helping ensure that your credentials are strong and unique and reducing exposure to password reuse and credential-based attacks, file encryption protects the actual data even if your storage is compromised, your device is compromised, or your cloud permissions fail.

One secures access controls, and the other secures data confidentiality.

In plain and simple practical terms, relying only on one can leave a gap in your security approach. When you apply both, you gain the benefits of layered protection that can reduce the potential impact of a security incident and strengthen your overall security posture.