1Password is a popular password management tool that securely stores all your passwords and sensitive information in a highly encrypted format. The passwords in 1Password are stored locally on your device and synchronized with its servers using end-to-end encryption.

When you save a password in 1Password, it is encrypted with a unique key derived from your master password. This encrypted data is then stored on your device, ensuring that only you can access it with your master password.

1Password also offers the option to sync your encrypted password vault with their cloud servers for backup and cross-device access. However, even in the cloud, your data remains encrypted and inaccessible without your master password.

In conclusion, 1Password stores passwords locally on your device in an encrypted format, ensuring the highest level of security and privacy for your sensitive information.