diff --git a/src/action/wallet.js b/src/action/wallet.js
index 8a937a82c..ff966a845 100644
--- a/src/action/wallet.js
+++ b/src/action/wallet.js
@@ -298,6 +298,7 @@ class WalletAction {
       this._nav.goWait();
       observe(this._store, 'lndReady', () => this._nav.goHome());
     } catch (err) {
+      this.setPassword({ password: '' });
       this._notification.display({ type: 'error', msg: 'Invalid password' });
     }
   }
diff --git a/test/unit/action/wallet.spec.js b/test/unit/action/wallet.spec.js
index a8584413b..ab51e346f 100644
--- a/test/unit/action/wallet.spec.js
+++ b/test/unit/action/wallet.spec.js
@@ -354,13 +354,16 @@ describe('Action Wallet Unit Tests', () => {
       expect(nav.goHome, 'was called once');
     });
 
-    it('should display error notification on failure', async () => {
+    it('should display error notification on failure and clear password', async () => {
+      wallet.setPassword('not-empty');
+      expect(store.wallet.password, 'not to be', '');
       grpc.sendUnlockerCommand
         .withArgs('UnlockWallet')
         .rejects(new Error('Boom!'));
       await wallet.unlockWallet({ walletPassword: 'baz' });
       expect(notification.display, 'was called once');
       expect(nav.goWait, 'was not called');
+      expect(store.wallet.password, 'to be', '');
     });
   });