What Are the Risks of Storing a "Personal" Email Password Password Locally?

Question

I sometimes use MS Outlook 2010 on my home PC to check my personal Hotmail, but I have to type my password in every time I connect. What risks would I face if I allowed MS Outlook to memorize my Hotmail Password?

Notes:

1. I'm pretty sure I have Outlook setup to use encrypted authentication with the Hotmail server
2. My user account that hosts my Outlook client is secured with a reasonable password
3. I use a mediocre quality hardware Firewall to "secure" outbound traffic
4. I use a well known software Antivirus/Firewall solution

Answer 1

Quite safe. Outlook does not store your password in plain text, it uses Windows Network Password to save your credentials.

When retrieving the email, Hotmail uses an SSL-secured connection so that's OK there too.

As for your firewall and anti-virus, they're probably the weakest link, but they do go a long way to keeping it safe. The anti-virus is by far the most important one, so make sure you keep it up to date.

It's important to note though that no password is ever 100% safe, so I don't want you to misconstrue this answer as saying such. But it's reasonably safe, safe enough for any personal email account anyway.

Just remember that if someone steals your computer and is able to unlock it, it doesn't matter that they don't know your password, they will be able to get into your email anyway because it's been saved.