diff --git a/krfb/invitationsrfbserver.h b/krfb/invitationsrfbserver.h
--- a/krfb/invitationsrfbserver.h
+++ b/krfb/invitationsrfbserver.h
@@ -50,6 +50,8 @@
     bool start() override;
     void stop() override;
     void toggleUnattendedAccess(bool allow);
+    void openKWallet();
+    void closeKWallet();
 
 protected:
     InvitationsRfbServer();
diff --git a/krfb/invitationsrfbserver.cpp b/krfb/invitationsrfbserver.cpp
--- a/krfb/invitationsrfbserver.cpp
+++ b/krfb/invitationsrfbserver.cpp
@@ -53,16 +53,11 @@
     instance->setListeningPort(KrfbConfig::port());
     instance->setPasswordRequired(true);
 
+    instance->m_wallet = nullptr;
     if (KrfbConfig::noWallet()) {
-      instance->walletOpened(false);
-    }
-    else {
-      instance->m_wallet = Wallet::openWallet(
-              Wallet::NetworkWallet(), 0, Wallet::Asynchronous);
-      if(instance->m_wallet) {
-          connect(instance->m_wallet, &KWallet::Wallet::walletOpened,
-                  instance, &InvitationsRfbServer::walletOpened);
-      }
+        instance->walletOpened(false);
+    } else {
+        instance->openKWallet();
     }
 }
 
@@ -125,19 +120,12 @@
 InvitationsRfbServer::~InvitationsRfbServer()
 {
     stop();
-    KConfigGroup krfbConfig(KSharedConfig::openConfig(),"Security");
-    krfbConfig.writeEntry("allowUnattendedAccess",m_allowUnattendedAccess);
-    if(!KrfbConfig::noWallet()) {
-      if (m_wallet && m_wallet->isOpen()) {
-         if( (m_wallet->currentFolder()=="krfb") ||
-                 ((m_wallet->hasFolder("krfb") || m_wallet->createFolder("krfb")) &&
-                    m_wallet->setFolder("krfb")) ) {
-
-             m_wallet->writePassword("desktopSharingPassword",m_desktopPassword);
-             m_wallet->writePassword("unattendedAccessPassword",m_unattendedPassword);
-         }
-       }
 
+    KConfigGroup krfbConfig(KSharedConfig::openConfig(), "Security");
+    krfbConfig.writeEntry("allowUnattendedAccess", m_allowUnattendedAccess);
+
+    if (!KrfbConfig::noWallet() && m_wallet) {
+        closeKWallet();
     } else {
         krfbConfig.writeEntry("desktopPassword",
                 KStringHandler::obscure(m_desktopPassword));
@@ -153,6 +141,29 @@
     return new PendingInvitationsRfbClient(client, this);
 }
 
+void InvitationsRfbServer::openKWallet()
+{
+    m_wallet = Wallet::openWallet(Wallet::NetworkWallet(), 0, Wallet::Asynchronous);
+    if (m_wallet) {
+        connect(instance->m_wallet, &KWallet::Wallet::walletOpened,
+                this, &InvitationsRfbServer::walletOpened);
+    }
+}
+
+void InvitationsRfbServer::closeKWallet()
+{
+    if (m_wallet && m_wallet->isOpen()) {
+        if ((m_wallet->currentFolder() == "krfb") ||
+                ((m_wallet->hasFolder("krfb") || m_wallet->createFolder("krfb")) &&
+                m_wallet->setFolder("krfb")) ) {
+            m_wallet->writePassword("desktopSharingPassword", m_desktopPassword);
+            m_wallet->writePassword("unattendedAccessPassword", m_unattendedPassword);
+        }
+        delete m_wallet; // closes the wallet
+        m_wallet = nullptr;
+    }
+}
+
 void InvitationsRfbServer::walletOpened(bool opened)
 {
     QString desktopPassword;
diff --git a/krfb/mainwindow.cpp b/krfb/mainwindow.cpp
--- a/krfb/mainwindow.cpp
+++ b/krfb/mainwindow.cpp
@@ -18,6 +18,7 @@
 #include <KConfigDialog>
 #include <KLocalizedString>
 #include <KMessageBox>
+#include <KMessageWidget>
 #include <KStandardAction>
 #include <KActionCollection>
 #include <KLineEdit>
@@ -48,7 +49,20 @@
 public:
     Security(QWidget *parent = nullptr) : QWidget(parent) {
         setupUi(this);
+        walletWarning = new KMessageWidget(this);
+        walletWarning->setText(i18n("Storing passwords in config file is insecure!"));
+        walletWarning->setCloseButtonVisible(false);
+        walletWarning->setMessageType(KMessageWidget::Warning);
+        walletWarning->hide();
+        vboxLayout->addWidget(walletWarning);
+
+        // show warning when "noWallet" checkbox is unchecked
+        QObject::connect(kcfg_noWallet, &QCheckBox::toggled, [this](bool checked){
+            walletWarning->setVisible(!checked);
+        });
     }
+
+    KMessageWidget *walletWarning = nullptr;
 };
 
 class ConfigFramebuffer: public QWidget, public Ui::Framebuffer
@@ -226,10 +240,12 @@
 void MainWindow::showConfiguration()
 {
     static QString s_prevFramebufferPlugin;
+    static bool s_prevNoWallet;
     // ^^ needs to be static, because lambda will be called long time
     //    after showConfiguration() ends, so auto variable would go out of scope
     // save previously selected framebuffer plugin config
     s_prevFramebufferPlugin = KrfbConfig::preferredFrameBufferPlugin();
+    s_prevNoWallet = KrfbConfig::noWallet();
 
     if (KConfigDialog::showDialog("settings")) {
         return;
@@ -246,6 +262,19 @@
             KMessageBox::information(this, i18n("To apply framebuffer plugin setting, "
                                                 "you need to restart the program."));
         }
+        // check if kwallet config has changed
+        if (s_prevNoWallet != KrfbConfig::noWallet()) {
+            // try to apply settings immediately
+            if (KrfbConfig::noWallet()) {
+                InvitationsRfbServer::instance->closeKWallet();
+            } else {
+                InvitationsRfbServer::instance->openKWallet();
+                // erase stored passwords from krfbconfig file
+                KConfigGroup securityConfigGroup(KSharedConfig::openConfig(), "Security");
+                securityConfigGroup.deleteEntry("desktopPassword");
+                securityConfigGroup.deleteEntry("unattendedPassword");
+            }
+        }
     });
 }
 
diff --git a/krfb/ui/configsecurity.ui b/krfb/ui/configsecurity.ui
--- a/krfb/ui/configsecurity.ui
+++ b/krfb/ui/configsecurity.ui
@@ -21,6 +21,13 @@
      </property>
     </widget>
    </item>
+   <item>
+    <widget class="QCheckBox" name="kcfg_noWallet">
+     <property name="text">
+      <string>Do not store passwords using KDE wallet</string>
+     </property>
+    </widget>
+   </item>
    <item>
     <spacer>
      <property name="orientation">