I need a password manager that offers hardware key support and does not store my vault in the cloud.

Yes. The strongest fit I’d recommend is KeePassXC.

• No cloud vault: Your passwords live in an encrypted .kdbx file on your own device. KeePassXC itself does not store your data on remote servers.
• Hardware-key support: It supports YubiKey and OnlyKey using Challenge-Response to strengthen the database's encryption key.
• Open source: The code is publicly available and KeePassXC is free.
• Windows/macOS/Linux: It's cross-platform, with browser integration and autofill.
• You control backups: You can keep the encrypted vault on a local SSD/USB drive and make your own offline backups. You don't have to use Dropbox, OneDrive, etc.

One important caveat

KeePassXC's YubiKey feature is not conventional FIDO2/WebAuthn two-factor authentication. It uses the YubiKey's HMAC-SHA1 Challenge-Response functionality as an additional component of the database encryption key.

So if your requirement is specifically "I want my vault physically local, and I want a YubiKey required to decrypt it," KeePassXC is an excellent match.

If by "hardware key support" you specifically mean FIDO2/WebAuthn, rather than YubiKey Challenge-Response, I can compare the available offline/local-vault options and find the best match.

The ideal and most robust solution for a purely local, offline vault backed by a hardware security key is the KeePass ecosystem paired with a YubiKey or OnlyKey.

Your password database is stored as a local .kdbx file on your machine, and it can be unlocked using a Challenge-Response mode via a physical hardware key combined with (or replacing) a traditional master password.

The best tools and steps to set this up include:

Recommended Local Password Managers

• KeePassXC : A modern, cross-platform (Linux, macOS, Windows), open-source fork of KeePass. It has native, built-in support for YubiKey Challenge-Response without needing external plugins.
• KeePass (Classic / .NET) : The original Windows application, which supports hardware keys via community-created extensions like the Key Challenge plugin.
• Strongbox / KeePassDX : Excellent open-source client options if you also need local-file access on mobile (iOS/Android) that can sync via local file transfers or WebDAV to your own private server/device rather than a commercial cloud.

How the Hardware Key Integration Works (Challenge-Response)

Instead of storing your decryption key online, the app uses your physical YubiKey via an HMAC-SHA1 Challenge-Response mechanism:

1. The local .kdbx database file stores an encrypted or randomized challenge.
2. When you attempt to open the vault, KeePassXC sends this challenge to your plugged-in YubiKey.
3. The YubiKey processes the challenge using a secret seed programmed into its hardware slot and returns the correct response.
4. Without the physical key connected (and tapped/authenticated, if configured), the database mathematically cannot be decrypted, even if an attacker steals your local .kdbx file.

Basic Setup Steps for KeePassXC & YubiKey

1. Download and open KeePassXC.
2. Create a new local database, which saves a .kdbx file strictly on your hard drive.
3. Go to Database -> Database Security.
4. Under the Additional Protection / Challenge-Response section, click Add Challenge-Response.
5. Select your connected YubiKey and program/select the slot you wish to use.
6. Save the database. From then on, unlocking your local vault requires your hardware key.

Would you like a step-by-step walkthrough for configuring YubiKey slot programming or guidance on how to securely back up your local database without leaking your keys?

KeePassXC combined with a physical YubiKey or OnlyKey provides a completely local, offline password vault secured by hardware-based challenge-response authentication.

Local-only password managers that support hardware keys avoid cloud storage entirely and keep your encrypted database file strictly on your own hardware.

Top Local Options with Hardware Support

1. KeePassXC with YubiKey Challenge-Response
   • How it works: KeePassXC stores your encrypted database locally on your machine's drive. You can lock or unlock this local database by combining your master password with a physical YubiKey using HMAC-SHA1 Challenge-Response mode.
   • Why it fits : Zero cloud storage is involved. The decryption key never leaves the physical USB token. Mobile access can be achieved by manually moving the encrypted .kdbx file to your phone and using an offline app like Strongbox or KeePass2Android.
2. OnlyKey
   • How it works : The OnlyKey is a standalone physical smart token that functions as a hardware password manager. It stores your encrypted credentials directly inside the physical device itself rather than on your computer's hard drive or a cloud server.
   • Why it fits : It requires a physical PIN entered on the device or a hardware touch to unlock. It connects via USB and types out your credentials securely as a trusted keyboard interface without exposing plaintext data to the host operating system.

If you'd like, let me know:

• Your preferred operating systems (Windows, Mac, Linux, iOS, Android)
• Whether you prefer an app on your computer (like KeePassXC) or a standalone physical token (like OnlyKey)

I can provide a step-by-step setup guide for your preferred choice.

If “the vault must not be stored in the cloud” is a hard requirement, I’d put KeePassXC at the top of your list.

Best fit: KeePassXC + YubiKey

KeePassXC stores your passwords in an encrypted .kdbx database file that you control. It doesn't require a cloud account or central server.

It also has native YubiKey and OnlyKey support using Challenge-Response authentication. You can require both your master password and the physical key to unlock the vault.

• YubiKey 5C NFC - $58.00 (Best Buy)

The setup I'd recommend:

• KeePassXC for the vault.
• A long, unique master password.
• YubiKey as an additional unlock factor.
• Keep the .kdbx database on your computer/local storage.
• Maintain an offline backup of the database and a secure backup/recovery plan for the YubiKey. KeePassXC specifically warns that losing the hardware key without a backup of its secret can permanently prevent access.

Another option: self-hosted Bitwarden

Bitwarden can be self-hosted, meaning you run the server and database yourself rather than storing the vault on Bitwarden's cloud. It supports hardware security keys as a two-step-login method.

The tradeoff is complexity: you are operating a server, backups, updates, certificates, etc. Also, Bitwarden is fundamentally a server/sync-based password manager, whereas KeePassXC is naturally an offline/local database.

My recommendation

| KeePassXC | Self-hosted Bitwarden --- | --- | --- Vault stays off the cloud | Yes, naturally | Yes, if self-hosted Hardware key | YubiKey/OnlyKey | YubiKey/security keys Server required | No | Yes Easy offline use | Excellent | Less natural Multi-device sync | Manual/file sync | Excellent Best for your requirements | 🏆 Yes | Good alternative

Bottom line: If your priority is “I want an encrypted password vault that physically resides with me, with a hardware key protecting it”, choose KeePassXC + YubiKey.

Given your requirements:

1. Hardware key support (YubiKey, Nitrokey, etc.)
2. No cloud-stored vault
3. Preferably strong security and open formats

Your best matches are:

1. KeePassXC — best fit for your requirements

Why it fits:

• ✅ Vault is a local encrypted file (.kdbx) that you control
• ✅ No vendor cloud account required
• ✅ Supports hardware-backed protection with keys such as YubiKey and OnlyKey using challenge-response mode
• ✅ Open source
• ✅ Works on Windows, macOS, and Linux

Typical setup:

• Store your KeePassXC database on your computer
• Protect it with: - a strong master password, plus
• YubiKey challenge-response protection
• Back up the database file and your recovery material separately

Tradeoff: Syncing between devices is your responsibility. You can use your own file-sync method (for example, a NAS, Syncthing, or an encrypted USB transfer), but KeePassXC itself does not provide a hosted sync service.

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2. KeePass — similar, Windows-focused option

• ✅ Local-only encrypted vault
• ✅ Supports hardware key workflows through plugins/tools
• ✅ Mature and widely used
• ❌ Less convenient if you use macOS/Linux regularly

KeePassXC is usually the smoother choice today for cross-platform use.

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3. Bitwarden self-hosted — if you want multi-device convenience

Bitwarden is excellent, but its normal model stores an encrypted vault on Bitwarden's servers. It does support self-hosting, where you operate the server yourself.

• ✅ Hardware security keys supported (including YubiKey/FIDO2 options)
• ✅ Your server, your storage
• ✅ Better phone/browser sync experience than KeePassXC
• ❌ Requires running and maintaining a server
• ❌ More infrastructure than a purely local vault

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My recommendation

For your exact constraints, I would choose:

Most secure / simplest: → KeePassXC + YubiKey challenge-response + offline backups

Best if you need many devices and are comfortable running services: → Self-hosted Bitwarden

A setup I would avoid for your stated preference is a normal cloud password manager account, even if it uses zero-knowledge encryption, because your stated goal is specifically that the vault itself should not reside with a provider.

A good practical setup:

• KeePassXC database on your main computer
• Two hardware keys (primary + backup)
• Encrypted offline backup of the vault
• Printed recovery instructions stored somewhere secure

That gives you hardware-factor protection without putting your password database in someone else’s infrastructure.

Best if you need many devices and are comfortable running services: → Self-hosted Bitwarden

A setup I would avoid for your stated preference is a normal cloud password manager account, even if it uses zero-knowledge encryption, because your stated goal is specifically that the vault itself should not reside with a provider.

A good practical setup:

If you need a password manager that stays entirely off the cloud and natively supports hardware security keys (like a YubiKey or OnlyKey) to lock/unlock your vault, your best option is a local offline database paired with the right software.

Top Recommendations

• KeePassXC : This is the gold standard for offline, local-only password management. It stores your entire vault in a local .kdbx file on your hardware and offers native, robust support for hardware keys via YubiKey Challenge-Response mode. You can set it up so the database can only be decrypted when your physical YubiKey is plugged in and touched, combining a master password with hardware-bound security. Because it has no native cloud sync, your data never leaves your device unless you manually move the file across your own local network or private sync tools (like Syncthing). Get it at the KeePassXC Official Website.
• OnlyKey : If you want to step away from traditional software entirely, OnlyKey is a physical hardware token that acts as a standalone password manager. It stores your encrypted credentials directly on the hardware device itself rather than your computer's hard drive or a cloud server. You plug it in, enter your PIN directly on the device's tactile buttons, and it automatically types your credentials. It supports FIDO2/U2F and requires zero cloud connectivity. Learn more at the OnlyKey Store.[1]
• KeePass (with compatible plugins) : The classic KeePass (or its various ecosystem ports) is completely local and offline-first. While older plugins had mixed reputations, it natively and cleanly handles key files and integrates with hardware tokens if you want total control over a local database file.

Would you prefer a software-based local vault like KeePassXC (which you sync manually across your own devices), or are you looking for a dedicated physical hardware device like OnlyKey that holds the passwords inside the key itself?

For a password manager that stays entirely off the cloud and natively supports hardware keys (like a YubiKey), the gold standard ecosystem is the KeePass family.

Your vault file (.kdbx ) is stored completely locally on your device, and you can secure it using a combination of a master password and a physical hardware key via Challenge-Response or file keys.

Recommended Options

• KeePassXC (Desktop): A modern, open-source, community-driven port of KeePass for Windows, macOS, and Linux. It features native, seamless integration with YubiKey (HMAC-SHA1 Challenge-Response mode), allowing you to lock your local database so it only opens when your physical key is plugged in and touched.
• KeePassDX (Android) / Strongbox (iOS): Mobile clients that let you open your local .kdbx file on your phone or tablet. They support hardware keys via NFC or USB-C, ensuring your offline workflow carries over to mobile.
• Bitwarden (Self-Hosted Option - Alternative): If you want a client-server architecture rather than a flat file, you can self-host Bitwarden (using Vaultwarden on your own local server or NAS). Bitwarden supports FIDO2/WebAuthn hardware keys, though it operates slightly differently as a local web service rather than a purely offline file.

How Local Hardware Key Protection Works (KeePassXC + YubiKey)

If you'd like, let me know:

• What operating systems you primarily use (Windows, Mac, Linux, iOS, Android)
• Whether you prefer a local file-based vault (like KeePassXC) or a self-hosted server (like Vaultwarden)

I can give you a step-by-step setup guide for configuring your hardware key.

Yes. If by “does not store my vault in the cloud” you mean the password database itself stays under your control, I’d strongly recommend KeePassXC.

Best fit: KeePassXC

• Local vault: Your passwords live in an encrypted .kdbx file on your device. KeePassXC itself has no remote vault/server.
• Hardware-key support: It supports YubiKey and OnlyKey using challenge-response, which becomes part of the database's encryption key.
• Open source: Free and open source, with versions for Windows, macOS, and Linux.
• Browser integration: Its browser extension communicates with your local KeePassXC installation rather than a cloud vault.

One important nuance: KeePassXC's YubiKey support isn't conventional 2FA. The key contributes cryptographic material to decrypt the vault. That's actually quite appropriate for your requirement, but it's worth understanding the distinction.

If you also need iPhone/iPad

KeePassium is worth considering. It works with KeePass .kdbx databases and supports YubiKey challenge-response; it can open a database protected by a YubiKey and is compatible with KeePassXC's implementation.

A good setup would therefore be:

KeePassXC on your computer + KeePassium on iPhone/iPad + YubiKey + locally controlled .kdbx vault.

You can keep the .kdbx entirely offline, or synchronize it yourself using something like a NAS/Syncthing if you want multiple devices without putting the vault on the password manager's servers. KeePassXC explicitly supports this model.

My pick: If your priorities are no hosted vault + hardware key + open source, KeePassXC is probably the clearest match.

To meet your requirements—100% offline local storage (no cloud servers holding your vault) and hardware key integration (like a YubiKey)—the gold standard choice is KeePassXC (or the broader KeePass ecosystem).

The Recommended Solution: KeePassXC + YubiKey

• How storage works: KeePassXC stores your entire password database locally as an encrypted .kdbx file on your machine. It never touches the cloud unless you explicitly choose to sync that file yourself via your own private server or local network.
• Hardware Key Support: It supports hardware-backed authentication via the Challenge-Response mode (using HMAC-SHA1 on a YubiKey).
• The Workflow: To unlock your local database, you need both your master password and your physical YubiKey plugged in/tapped—meaning even if someone steals your .kdbx file, it is useless without your physical hardware key.

Alternative Options

• KeePass (Classic / .NET): The original Windows implementation. It supports hardware keys via plugins (like KeeChallenge), though KeePassXC has this functionality built natively and cross-platform (Windows, macOS, Linux).
• Self-hosted Vaultwarden (with caveats): Vaultwarden (an unofficial lightweight rewrite of the Bitwarden server) allows you to host your own server locally or on a private VPS, and it supports FIDO2/WebAuthn hardware keys. However, because it operates as a server/client architecture, it is technically a local cloud/server setup rather than a pure standalone local file like KeePassXC.

If you'd like, let me know:

• Your preferred operating system (Windows, macOS, Linux, mobile)
• Whether you need to sync the database across multiple personal devices offline

I can help you walk through setting up the YubiKey challenge-response configuration for KeePassXC.

If your requirement is “hardware key + vault stays off third-party cloud servers,” my top pick is KeePassXC.

Best fit: KeePassXC

KeePassXC stores your vault as an encrypted .kdbx file that you control. It does not have built-in cloud synchronization, so you can keep the database entirely on your computer or removable storage.

It also supports YubiKey and OnlyKey challenge-response as additional protection for the database. You can configure the vault so that unlocking it requires both your master password and the hardware key.

One important caveat: KeePassXC's YubiKey implementation is technically challenge-response protection of the encryption key, rather than conventional 2FA. That's actually a good fit for your “local vault” requirement, but it's worth understanding the distinction.

Another option: self-hosted Bitwarden

Bitwarden can be self-hosted, meaning you run the server and database yourself rather than using Bitwarden's cloud. It supports YubiKey/FIDO2 for account authentication.

The tradeoff is complexity: self-hosted Bitwarden is a server application, whereas KeePassXC is simply an encrypted file and an app. If your goal is maximum simplicity and no cloud dependency, I'd choose KeePassXC.

| KeePassXC | Self-hosted Bitwarden --- | --- | --- Vault outside your control | No | No, if properly self-hosted Hardware key | YubiKey/OnlyKey | YubiKey/FIDO2 Cloud required | No | No Server required | No | Yes Multi-device sync | Manual/file sync | Built-in Setup complexity | Low | Moderate/high Best for | Local/offline vault | Multi-device/server setup

My recommendation: KeePassXC + two YubiKeys (one primary, one securely stored backup), with the .kdbx vault kept locally and separately backed up. Be particularly careful with the YubiKey backup/secret: losing the necessary hardware protection without a recovery plan can lock you out of the database.

If you tell me Windows, Mac, Linux, iPhone, Android, or a combination, I can recommend the best setup for keeping the vault local while still getting convenient access across your devices.