diff --git a/beacon-chain/forkchoice/protoarray/nodes_test.go b/beacon-chain/forkchoice/protoarray/nodes_test.go
index ab9aeb7e072..19ec552962a 100644
--- a/beacon-chain/forkchoice/protoarray/nodes_test.go
+++ b/beacon-chain/forkchoice/protoarray/nodes_test.go
@@ -374,10 +374,10 @@ func TestStore_HasParent(t *testing.T) {
 		want bool
 	}{
 		{r: [32]byte{'a'}, want: false},
-		{m: map[[32]byte]uint64{[32]byte{'a'}: 0}, r: [32]byte{'a'}, want: false},
-		{m: map[[32]byte]uint64{[32]byte{'a'}: 0}, r: [32]byte{'a'},
+		{m: map[[32]byte]uint64{{'a'}: 0}, r: [32]byte{'a'}, want: false},
+		{m: map[[32]byte]uint64{{'a'}: 0}, r: [32]byte{'a'},
 			n: []*Node{{Parent: NonExistentNode}}, want: false},
-		{m: map[[32]byte]uint64{[32]byte{'a'}: 0},
+		{m: map[[32]byte]uint64{{'a'}: 0},
 			n: []*Node{{Parent: 0}}, r: [32]byte{'a'},
 			want: true},
 	}
diff --git a/validator/accounts/v2/BUILD.bazel b/validator/accounts/v2/BUILD.bazel
index 72b0d449cd5..6ea1436644b 100644
--- a/validator/accounts/v2/BUILD.bazel
+++ b/validator/accounts/v2/BUILD.bazel
@@ -23,6 +23,7 @@ go_library(
         "//validator:__subpackages__",
     ],
     deps = [
+        "//shared/bytesutil:go_default_library",
         "//shared/featureconfig:go_default_library",
         "//shared/params:go_default_library",
         "//shared/petnames:go_default_library",
@@ -73,7 +74,9 @@ go_test(
         "//validator/keymanager/v2/remote:go_default_library",
         "@com_github_dustin_go_humanize//:go_default_library",
         "@com_github_google_uuid//:go_default_library",
+        "@com_github_pkg_errors//:go_default_library",
         "@com_github_sirupsen_logrus//:go_default_library",
+        "@com_github_sirupsen_logrus//hooks/test:go_default_library",
         "@com_github_urfave_cli_v2//:go_default_library",
         "@com_github_wealdtech_go_eth2_wallet_encryptor_keystorev4//:go_default_library",
     ],
diff --git a/validator/accounts/v2/accounts_create.go b/validator/accounts/v2/accounts_create.go
index 04431d7792f..1f2d7a5f0bc 100644
--- a/validator/accounts/v2/accounts_create.go
+++ b/validator/accounts/v2/accounts_create.go
@@ -20,25 +20,10 @@ var log = logrus.WithField("prefix", "accounts-v2")
 // a wallet from the user's specified path.
 func CreateAccount(cliCtx *cli.Context) error {
 	ctx := context.Background()
-	walletDir, err := inputDirectory(cliCtx, walletDirPromptText, flags.WalletDirFlag)
-	if err != nil {
-		return errors.Wrapf(err, "Could not retrieve input directory")
-	}
-	ok, err := hasDir(walletDir)
+	wallet, err := createOrOpenWallet(cliCtx, CreateWallet)
 	if err != nil {
 		return err
 	}
-	// Create a new wallet if no directory exists.
-	if !ok {
-		err = CreateWallet(cliCtx)
-		if err != nil {
-			return errors.Wrapf(err, "Could not create wallet")
-		}
-	}
-	wallet, err := OpenWallet(cliCtx)
-	if err != nil {
-		return errors.Wrap(err, "could not open wallet")
-	}
 	skipMnemonicConfirm := cliCtx.Bool(flags.SkipMnemonicConfirmFlag.Name)
 	keymanager, err := wallet.InitializeKeymanager(ctx, skipMnemonicConfirm)
 	if err != nil {
@@ -52,7 +37,7 @@ func CreateAccount(cliCtx *cli.Context) error {
 		if !ok {
 			return errors.New("not a direct keymanager")
 		}
-		password, err := inputPassword(cliCtx, newAccountPasswordPromptText, confirmPass)
+		password, err := inputPassword(cliCtx, flags.AccountPasswordFileFlag, newAccountPasswordPromptText, confirmPass)
 		if err != nil {
 			return errors.Wrap(err, "could not input new account password")
 		}
diff --git a/validator/accounts/v2/accounts_create_test.go b/validator/accounts/v2/accounts_create_test.go
index b1a74e63d71..9cffb2af090 100644
--- a/validator/accounts/v2/accounts_create_test.go
+++ b/validator/accounts/v2/accounts_create_test.go
@@ -14,15 +14,17 @@ func TestCreateAccount_Derived(t *testing.T) {
 	walletDir, passwordsDir, passwordFile := setupWalletAndPasswordsDir(t)
 	numAccounts := int64(5)
 	cliCtx := setupWalletCtx(t, &testWalletConfig{
-		walletDir:      walletDir,
-		passwordsDir:   passwordsDir,
-		passwordFile:   passwordFile,
-		keymanagerKind: v2keymanager.Derived,
-		numAccounts:    numAccounts,
+		walletDir:           walletDir,
+		passwordsDir:        passwordsDir,
+		walletPasswordFile:  passwordFile,
+		accountPasswordFile: passwordFile,
+		keymanagerKind:      v2keymanager.Derived,
+		numAccounts:         numAccounts,
 	})
 
 	// We attempt to create the wallet.
-	require.NoError(t, CreateWallet(cliCtx))
+	_, err := CreateWallet(cliCtx)
+	require.NoError(t, err)
 
 	// We attempt to open the newly created wallet.
 	ctx := context.Background()
diff --git a/validator/accounts/v2/accounts_export.go b/validator/accounts/v2/accounts_export.go
index 21bc3005066..f89269d9aaa 100644
--- a/validator/accounts/v2/accounts_export.go
+++ b/validator/accounts/v2/accounts_export.go
@@ -28,9 +28,10 @@ func ExportAccount(cliCtx *cli.Context) error {
 	if err != nil {
 		return errors.Wrap(err, "could not parse output directory")
 	}
-
 	wallet, err := OpenWallet(cliCtx)
-	if err != nil {
+	if errors.Is(err, ErrNoWalletFound) {
+		return errors.Wrap(err, "nothing to export, no wallet found")
+	} else if err != nil {
 		return errors.Wrap(err, "could not open wallet")
 	}
 	keymanager, err := wallet.InitializeKeymanager(context.Background(), true /* skip mnemonic confirm */)
diff --git a/validator/accounts/v2/accounts_export_test.go b/validator/accounts/v2/accounts_export_test.go
index 80c1355cc36..29058a52738 100644
--- a/validator/accounts/v2/accounts_export_test.go
+++ b/validator/accounts/v2/accounts_export_test.go
@@ -36,10 +36,12 @@ func TestZipAndUnzip(t *testing.T) {
 	require.NoError(t, err)
 	require.NoError(t, wallet.SaveWallet())
 	ctx := context.Background()
+	keymanagerCfg := direct.DefaultConfig()
+	keymanagerCfg.AccountPasswordsDirectory = passwordsDir
 	keymanager, err := direct.NewKeymanager(
 		ctx,
 		wallet,
-		direct.DefaultConfig(),
+		keymanagerCfg,
 	)
 	require.NoError(t, err)
 	_, err = keymanager.CreateAccount(ctx, password)
@@ -80,6 +82,7 @@ func TestExport_Noninteractive(t *testing.T) {
 	require.NoError(t, wallet.SaveWallet())
 	ctx := context.Background()
 	keymanagerCfg := direct.DefaultConfig()
+	keymanagerCfg.AccountPasswordsDirectory = passwordsDir
 	encodedCfg, err := direct.MarshalConfigFile(ctx, keymanagerCfg)
 	require.NoError(t, err)
 	require.NoError(t, wallet.WriteKeymanagerConfigToDisk(ctx, encodedCfg))
diff --git a/validator/accounts/v2/accounts_import.go b/validator/accounts/v2/accounts_import.go
index 0ce9afdfbaf..aff0e2a2686 100644
--- a/validator/accounts/v2/accounts_import.go
+++ b/validator/accounts/v2/accounts_import.go
@@ -23,53 +23,41 @@ import (
 // ImportAccount uses the archived account made from ExportAccount to import an account and
 // asks the users for account passwords.
 func ImportAccount(cliCtx *cli.Context) error {
-	walletDir, err := inputDirectory(cliCtx, walletDirPromptText, flags.WalletDirFlag)
-	if err != nil && !errors.Is(err, ErrNoWalletFound) {
-		return errors.Wrap(err, "could not parse wallet directory")
-	}
-	// Check if the user has a wallet at the specified path. If so, only let them continue if it is a non-HD wallet.
-	walletExists, err := hasDir(walletDir)
-	if err != nil {
-		return errors.Wrap(err, "could not check if wallet exists")
-	}
-	if walletExists {
-		keymanagerKind, err := readKeymanagerKindFromWalletPath(walletDir)
-		if err != nil {
-			return errors.Wrap(err, "could not read keymanager kind for existing wallet")
+	ctx := context.Background()
+	wallet, err := createOrOpenWallet(cliCtx, func(cliCtx *cli.Context) (*Wallet, error) {
+		w, err := NewWallet(cliCtx, v2keymanager.Direct)
+		if err != nil && !errors.Is(err, ErrWalletExists) {
+			return nil, errors.Wrap(err, "could not create new wallet")
 		}
-		if keymanagerKind != v2keymanager.Direct {
-			return fmt.Errorf(
-				"importing non-HD accounts into a non-direct wallet is not allowed, given wallet path contains a %s wallet",
-				keymanagerKind.String(),
-			)
+		if err = createDirectKeymanagerWallet(cliCtx, w); err != nil {
+			return nil, errors.Wrap(err, "could not initialize wallet")
 		}
-	}
-	passwordsDir, err := inputDirectory(cliCtx, passwordsDirPromptText, flags.WalletPasswordsDirFlag)
+		log.WithField("wallet-path", w.walletDir).Info(
+			"Successfully created new wallet",
+		)
+		return w, err
+	})
 	if err != nil {
-		return err
+		return errors.Wrap(err, "could not initialize wallet")
+	}
+	if wallet.KeymanagerKind() != v2keymanager.Direct {
+		return errors.New(
+			"only non-HD wallets can import accounts, try creating a new wallet with wallet-v2 create",
+		)
 	}
 	keysDir, err := inputDirectory(cliCtx, importKeysDirPromptText, flags.KeysDirFlag)
 	if err != nil {
 		return errors.Wrap(err, "could not parse keys directory")
 	}
-
-	accountsPath := filepath.Join(walletDir, v2keymanager.Direct.String())
-	if err := os.MkdirAll(accountsPath, DirectoryPermissions); err != nil {
-		return errors.Wrap(err, "could not create wallet directory")
-	}
-	if err := os.MkdirAll(passwordsDir, DirectoryPermissions); err != nil {
-		return errors.Wrap(err, "could not create passwords directory")
-	}
-
-	wallet := &Wallet{
-		accountsPath:   accountsPath,
-		passwordsDir:   passwordsDir,
-		keymanagerKind: v2keymanager.Direct,
+	if err := wallet.SaveWallet(); err != nil {
+		return errors.Wrap(err, "could not save wallet")
 	}
-
 	var accountsImported []string
-	ctx := context.Background()
+	var pubKeysImported [][]byte
 	if err := filepath.Walk(keysDir, func(path string, info os.FileInfo, err error) error {
+		if err != nil {
+			return err
+		}
 		if info.IsDir() {
 			return nil
 		}
@@ -90,11 +78,12 @@ func ImportAccount(cliCtx *cli.Context) error {
 			return nil
 		}
 
-		accountName, err := wallet.importKeystore(ctx, path)
+		accountName, pubKey, err := wallet.importKeystore(ctx, path)
 		if err != nil {
 			return errors.Wrap(err, "could not import keystore")
 		}
 		accountsImported = append(accountsImported, accountName)
+		pubKeysImported = append(pubKeysImported, pubKey)
 		return nil
 	}); err != nil {
 		return errors.Wrap(err, "could not walk files")
@@ -102,8 +91,8 @@ func ImportAccount(cliCtx *cli.Context) error {
 
 	au := aurora.NewAurora(true)
 	fmt.Printf("Importing accounts: %s\n", au.BrightGreen(strings.Join(accountsImported, ", ")).Bold())
-	for _, accountName := range accountsImported {
-		if err := wallet.enterPasswordForAccount(cliCtx, accountName); err != nil {
+	for i, accountName := range accountsImported {
+		if err := wallet.enterPasswordForAccount(cliCtx, accountName, pubKeysImported[i]); err != nil {
 			return errors.Wrap(err, "could not verify password for keystore")
 		}
 	}
@@ -123,25 +112,25 @@ func ImportAccount(cliCtx *cli.Context) error {
 	return nil
 }
 
-func (w *Wallet) importKeystore(ctx context.Context, keystoreFilePath string) (string, error) {
+func (w *Wallet) importKeystore(ctx context.Context, keystoreFilePath string) (string, []byte, error) {
 	keystoreBytes, err := ioutil.ReadFile(keystoreFilePath)
 	if err != nil {
-		return "", errors.Wrap(err, "could not read keystore file")
+		return "", nil, errors.Wrap(err, "could not read keystore file")
 	}
 	keystoreFile := &v2keymanager.Keystore{}
 	if err := json.Unmarshal(keystoreBytes, keystoreFile); err != nil {
-		return "", errors.Wrap(err, "could not decode keystore json")
+		return "", nil, errors.Wrap(err, "could not decode keystore json")
 	}
 	pubKeyBytes, err := hex.DecodeString(keystoreFile.Pubkey)
 	if err != nil {
-		return "", errors.Wrap(err, "could not decode public key string in keystore")
+		return "", nil, errors.Wrap(err, "could not decode public key string in keystore")
 	}
 	accountName := petnames.DeterministicName(pubKeyBytes, "-")
 	keystoreFileName := filepath.Base(keystoreFilePath)
 	if err := w.WriteFileAtPath(ctx, accountName, keystoreFileName, keystoreBytes); err != nil {
-		return "", errors.Wrap(err, "could not write keystore to account dir")
+		return "", nil, errors.Wrap(err, "could not write keystore to account dir")
 	}
-	return accountName, nil
+	return accountName, pubKeyBytes, nil
 }
 
 func logAccountsImported(ctx context.Context, wallet *Wallet, keymanager *direct.Keymanager, accountNames []string) error {
diff --git a/validator/accounts/v2/accounts_import_test.go b/validator/accounts/v2/accounts_import_test.go
index 89469f5b077..448ffa84f25 100644
--- a/validator/accounts/v2/accounts_import_test.go
+++ b/validator/accounts/v2/accounts_import_test.go
@@ -34,17 +34,19 @@ func TestImport_Noninteractive(t *testing.T) {
 	})
 
 	cliCtx := setupWalletCtx(t, &testWalletConfig{
-		walletDir:      walletDir,
-		passwordsDir:   passwordsDir,
-		keysDir:        keysDir,
-		keymanagerKind: v2keymanager.Direct,
-		passwordFile:   passwordFilePath,
+		walletDir:           walletDir,
+		passwordsDir:        passwordsDir,
+		keysDir:             keysDir,
+		keymanagerKind:      v2keymanager.Direct,
+		walletPasswordFile:  passwordFilePath,
+		accountPasswordFile: passwordFilePath,
 	})
 	wallet, err := NewWallet(cliCtx, v2keymanager.Direct)
 	require.NoError(t, err)
 	require.NoError(t, wallet.SaveWallet())
 	ctx := context.Background()
 	keymanagerCfg := direct.DefaultConfig()
+	keymanagerCfg.AccountPasswordsDirectory = passwordsDir
 	encodedCfg, err := direct.MarshalConfigFile(ctx, keymanagerCfg)
 	require.NoError(t, err)
 	require.NoError(t, wallet.WriteKeymanagerConfigToDisk(ctx, encodedCfg))
diff --git a/validator/accounts/v2/accounts_list.go b/validator/accounts/v2/accounts_list.go
index 1e862e6a238..ea074121a02 100644
--- a/validator/accounts/v2/accounts_list.go
+++ b/validator/accounts/v2/accounts_list.go
@@ -24,8 +24,10 @@ func ListAccounts(cliCtx *cli.Context) error {
 	// Read the wallet from the specified path.
 	ctx := context.Background()
 	wallet, err := OpenWallet(cliCtx)
-	if err != nil {
-		return errors.Wrapf(err, "could not read wallet at specified path %s", wallet.AccountsDir())
+	if errors.Is(err, ErrNoWalletFound) {
+		return errors.Wrap(err, "no wallet found at path, create a new wallet with wallet-v2 create")
+	} else if err != nil {
+		return errors.Wrap(err, "could not open wallet")
 	}
 	keymanager, err := wallet.InitializeKeymanager(ctx, true /* skip mnemonic confirm */)
 	if err != nil {
@@ -103,7 +105,7 @@ func listDirectKeymanagerAccounts(
 		if err != nil {
 			return errors.Wrap(err, "could not get timestamp from keystore file name")
 		}
-		fmt.Printf("%s | Created %s\n", au.BrightGreen(accountNames[i]).Bold(), humanize.Time(unixTimestamp))
+		fmt.Printf("%s | %s | Created %s\n", au.BrightBlue(fmt.Sprintf("Account %d", i)).Bold(), au.BrightGreen(accountNames[i]).Bold(), humanize.Time(unixTimestamp))
 		fmt.Printf("%s %#x\n", au.BrightMagenta("[validating public key]").Bold(), pubKeys[i])
 		if !showDepositData {
 			continue
diff --git a/validator/accounts/v2/accounts_list_test.go b/validator/accounts/v2/accounts_list_test.go
index 557e2fc77e4..0c0c135a2ac 100644
--- a/validator/accounts/v2/accounts_list_test.go
+++ b/validator/accounts/v2/accounts_list_test.go
@@ -127,10 +127,10 @@ func TestListAccounts_DirectKeymanager(t *testing.T) {
 func TestListAccounts_DerivedKeymanager(t *testing.T) {
 	walletDir, passwordsDir, passwordFilePath := setupWalletAndPasswordsDir(t)
 	cliCtx := setupWalletCtx(t, &testWalletConfig{
-		walletDir:      walletDir,
-		passwordsDir:   passwordsDir,
-		keymanagerKind: v2keymanager.Derived,
-		passwordFile:   passwordFilePath,
+		walletDir:          walletDir,
+		passwordsDir:       passwordsDir,
+		keymanagerKind:     v2keymanager.Derived,
+		walletPasswordFile: passwordFilePath,
 	})
 	wallet, err := NewWallet(cliCtx, v2keymanager.Derived)
 	require.NoError(t, err)
diff --git a/validator/accounts/v2/cmd_accounts.go b/validator/accounts/v2/cmd_accounts.go
index 217598c89d1..05b1d1ee2e8 100644
--- a/validator/accounts/v2/cmd_accounts.go
+++ b/validator/accounts/v2/cmd_accounts.go
@@ -20,8 +20,8 @@ specified input, capable of creating a direct, derived, or remote wallet.
 this command outputs a deposit data string which is required to become a validator in eth2.`,
 			Flags: []cli.Flag{
 				flags.WalletDirFlag,
-				flags.WalletPasswordsDirFlag,
-				flags.PasswordFileFlag,
+				flags.WalletPasswordFileFlag,
+				flags.AccountPasswordFileFlag,
 				flags.NumAccountsFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
@@ -38,8 +38,7 @@ this command outputs a deposit data string which is required to become a validat
 			Description: "Lists all validator accounts in a user's wallet directory",
 			Flags: []cli.Flag{
 				flags.WalletDirFlag,
-				flags.WalletPasswordsDirFlag,
-				flags.PasswordFileFlag,
+				flags.WalletPasswordFileFlag,
 				flags.ShowDepositDataFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
@@ -56,7 +55,6 @@ this command outputs a deposit data string which is required to become a validat
 			Description: `exports the account of a given directory into a zip of the provided output path. This zip can be used to later import the account to another directory`,
 			Flags: []cli.Flag{
 				flags.WalletDirFlag,
-				flags.WalletPasswordsDirFlag,
 				flags.BackupDirFlag,
 				flags.AccountsFlag,
 				featureconfig.AltonaTestnet,
@@ -76,7 +74,7 @@ this command outputs a deposit data string which is required to become a validat
 				flags.WalletDirFlag,
 				flags.WalletPasswordsDirFlag,
 				flags.KeysDirFlag,
-				flags.PasswordFileFlag,
+				flags.WalletPasswordFileFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
 			},
diff --git a/validator/accounts/v2/cmd_wallet.go b/validator/accounts/v2/cmd_wallet.go
index 27c22e1af4a..4a7bd855a85 100644
--- a/validator/accounts/v2/cmd_wallet.go
+++ b/validator/accounts/v2/cmd_wallet.go
@@ -24,12 +24,12 @@ var WalletCommands = &cli.Command{
 				flags.RemoteSignerCertPathFlag,
 				flags.RemoteSignerKeyPathFlag,
 				flags.RemoteSignerCACertPathFlag,
-				flags.PasswordFileFlag,
+				flags.WalletPasswordFileFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
 			},
 			Action: func(cliCtx *cli.Context) error {
-				if err := CreateWallet(cliCtx); err != nil {
+				if _, err := CreateWallet(cliCtx); err != nil {
 					log.Fatalf("Could not create a wallet: %v", err)
 				}
 				return nil
@@ -44,6 +44,7 @@ var WalletCommands = &cli.Command{
 				flags.RemoteSignerCertPathFlag,
 				flags.RemoteSignerKeyPathFlag,
 				flags.RemoteSignerCACertPathFlag,
+				flags.WalletPasswordsDirFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
 			},
@@ -61,7 +62,7 @@ var WalletCommands = &cli.Command{
 				flags.WalletDirFlag,
 				flags.WalletPasswordsDirFlag,
 				flags.MnemonicFileFlag,
-				flags.PasswordFileFlag,
+				flags.WalletPasswordFileFlag,
 				flags.NumAccountsFlag,
 				featureconfig.AltonaTestnet,
 				featureconfig.MedallaTestnet,
diff --git a/validator/accounts/v2/prompt.go b/validator/accounts/v2/prompt.go
index a7100da88ce..895cf12d70d 100644
--- a/validator/accounts/v2/prompt.go
+++ b/validator/accounts/v2/prompt.go
@@ -3,7 +3,6 @@ package v2
 import (
 	"fmt"
 	"io/ioutil"
-	"path/filepath"
 	"strings"
 	"unicode"
 
@@ -17,16 +16,15 @@ import (
 )
 
 const (
-	importDirPromptText          = "Enter the file location of the exported wallet zip to import"
 	importKeysDirPromptText      = "Enter the directory where your keystores to import are located"
-	exportDirPromptText          = "Enter a file location to write the exported wallet to"
+	exportDirPromptText          = "Enter a file location to write the exported account(s) to"
 	walletDirPromptText          = "Enter a wallet directory"
 	passwordsDirPromptText       = "Directory where passwords will be stored"
 	newWalletPasswordPromptText  = "New wallet password"
 	confirmPasswordPromptText    = "Confirm password"
 	walletPasswordPromptText     = "Wallet password"
 	newAccountPasswordPromptText = "New account password"
-	passwordForAccountPromptText = "Enter password for account %s"
+	passwordForAccountPromptText = "Enter password for account with public key %#x"
 )
 
 type passwordConfirm int
@@ -44,7 +42,7 @@ const (
 )
 
 func inputDirectory(cliCtx *cli.Context, promptText string, flag *cli.StringFlag) (string, error) {
-	directory := appendDirName(cliCtx.String(flag.Name), flag.Name)
+	directory := cliCtx.String(flag.Name)
 	if cliCtx.IsSet(flag.Name) {
 		return directory, nil
 	}
@@ -84,17 +82,7 @@ func inputDirectory(cliCtx *cli.Context, promptText string, flag *cli.StringFlag
 	if inputtedDir == prompt.Default {
 		return directory, nil
 	}
-	return appendDirName(inputtedDir, flag.Name), nil
-}
-
-func appendDirName(inputtedDir string, flagName string) string {
-	switch flagName {
-	case flags.WalletDirFlag.Name:
-		inputtedDir = filepath.Join(inputtedDir, WalletDefaultDirName)
-	case flags.WalletPasswordsDirFlag.Name:
-		inputtedDir = filepath.Join(inputtedDir, PasswordsDefaultDirName)
-	}
-	return inputtedDir
+	return inputtedDir, nil
 }
 
 func validateDirectoryPath(input string) error {
@@ -104,9 +92,14 @@ func validateDirectoryPath(input string) error {
 	return nil
 }
 
-func inputPassword(cliCtx *cli.Context, promptText string, confirmPassword passwordConfirm) (string, error) {
-	if cliCtx.IsSet(flags.PasswordFileFlag.Name) {
-		passwordFilePath := cliCtx.String(flags.PasswordFileFlag.Name)
+func inputPassword(
+	cliCtx *cli.Context,
+	passwordFileFlag *cli.StringFlag,
+	promptText string,
+	confirmPassword passwordConfirm,
+) (string, error) {
+	if cliCtx.IsSet(passwordFileFlag.Name) {
+		passwordFilePath := cliCtx.String(passwordFileFlag.Name)
 		data, err := ioutil.ReadFile(passwordFilePath)
 		if err != nil {
 			return "", errors.Wrap(err, "could not read password file")
@@ -152,9 +145,9 @@ func inputPassword(cliCtx *cli.Context, promptText string, confirmPassword passw
 	return strings.TrimRight(walletPassword, "\r\n"), nil
 }
 
-func inputWeakPassword(cliCtx *cli.Context, promptText string) (string, error) {
-	if cliCtx.IsSet(flags.PasswordFileFlag.Name) {
-		passwordFilePath := cliCtx.String(flags.PasswordFileFlag.Name)
+func inputWeakPassword(cliCtx *cli.Context, passwordFileFlag *cli.StringFlag, promptText string) (string, error) {
+	if cliCtx.IsSet(passwordFileFlag.Name) {
+		passwordFilePath := cliCtx.String(passwordFileFlag.Name)
 		data, err := ioutil.ReadFile(passwordFilePath)
 		if err != nil {
 			return "", errors.Wrap(err, "could not read password file")
@@ -227,71 +220,63 @@ func inputRemoteKeymanagerConfig(cliCtx *cli.Context) (*remote.Config, error) {
 	crt := cliCtx.String(flags.RemoteSignerCertPathFlag.Name)
 	key := cliCtx.String(flags.RemoteSignerKeyPathFlag.Name)
 	ca := cliCtx.String(flags.RemoteSignerCACertPathFlag.Name)
-
-	if addr != "" && crt != "" && key != "" && ca != "" {
-		if !(isValidUnicode(addr) && isValidUnicode(crt) && isValidUnicode(key) && isValidUnicode(ca)) {
-			return nil, errors.New("flag inputs contain non-unicode characters")
-		}
-		newCfg := &remote.Config{
-			RemoteCertificate: &remote.CertificateConfig{
-				ClientCertPath: strings.TrimRight(crt, "\r\n"),
-				ClientKeyPath:  strings.TrimRight(key, "\r\n"),
-				CACertPath:     strings.TrimRight(ca, "\r\n"),
+	log.Info("Input desired configuration")
+	var err error
+	if addr == "" {
+		prompt := promptui.Prompt{
+			Label: "Remote gRPC address (such as host.example.com:4000)",
+			Validate: func(input string) error {
+				if input == "" {
+					return errors.New("remote host address cannot be empty")
+				}
+				if !isValidUnicode(input) {
+					return errors.New("not valid unicode")
+				}
+				return nil
 			},
-			RemoteAddr: strings.TrimRight(addr, "\r\n"),
 		}
-		log.Infof("New configuration")
-		fmt.Printf("%s\n", newCfg)
-		return newCfg, nil
-	}
-	log.Infof("Input desired configuration")
-	prompt := promptui.Prompt{
-		Label: "Remote gRPC address (such as host.example.com:4000)",
-		Validate: func(input string) error {
-			if input == "" {
-				return errors.New("remote host address cannot be empty")
-			}
-			if !isValidUnicode(input) {
-				return errors.New("not valid unicode")
-			}
-			return nil
-		},
-	}
-	remoteAddr, err := prompt.Run()
-	if err != nil {
-		return nil, err
-	}
-	prompt = promptui.Prompt{
-		Label:    "Path to TLS crt (such as /path/to/client.crt)",
-		Validate: validateCertPath,
-	}
-	clientCrtPath, err := prompt.Run()
-	if err != nil {
-		return nil, err
-	}
-	prompt = promptui.Prompt{
-		Label:    "Path to TLS key (such as /path/to/client.key)",
-		Validate: validateCertPath,
+		addr, err = prompt.Run()
+		if err != nil {
+			return nil, err
+		}
 	}
-	clientKeyPath, err := prompt.Run()
-	if err != nil {
-		return nil, err
+	if crt == "" {
+		prompt := promptui.Prompt{
+			Label:    "Path to TLS crt (such as /path/to/client.crt)",
+			Validate: validateCertPath,
+		}
+		crt, err = prompt.Run()
+		if err != nil {
+			return nil, err
+		}
 	}
-	prompt = promptui.Prompt{
-		Label:    "(Optional) Path to certificate authority (CA) crt (such as /path/to/ca.crt)",
-		Validate: validateCACertPath,
+	if key == "" {
+		prompt := promptui.Prompt{
+			Label:    "Path to TLS key (such as /path/to/client.key)",
+			Validate: validateCertPath,
+		}
+		key, err = prompt.Run()
+		if err != nil {
+			return nil, err
+		}
 	}
-	caCrtPath, err := prompt.Run()
-	if err != nil {
-		return nil, err
+	if ca == "" {
+		prompt := promptui.Prompt{
+			Label:    "Path to certificate authority (CA) crt (such as /path/to/ca.crt)",
+			Validate: validateCertPath,
+		}
+		ca, err = prompt.Run()
+		if err != nil {
+			return nil, err
+		}
 	}
 	newCfg := &remote.Config{
 		RemoteCertificate: &remote.CertificateConfig{
-			ClientCertPath: strings.TrimRight(clientCrtPath, "\r\n"),
-			ClientKeyPath:  strings.TrimRight(clientKeyPath, "\r\n"),
-			CACertPath:     strings.TrimRight(caCrtPath, "\r\n"),
+			ClientCertPath: strings.TrimRight(crt, "\r\n"),
+			ClientKeyPath:  strings.TrimRight(key, "\r\n"),
+			CACertPath:     strings.TrimRight(ca, "\r\n"),
 		},
-		RemoteAddr: strings.TrimRight(remoteAddr, "\r\n"),
+		RemoteAddr: strings.TrimRight(addr, "\r\n"),
 	}
 	fmt.Printf("%s\n", newCfg)
 	return newCfg, nil
@@ -310,16 +295,6 @@ func validateCertPath(input string) error {
 	return nil
 }
 
-func validateCACertPath(input string) error {
-	if input != "" && !fileExists(input) {
-		return fmt.Errorf("no crt found at path: %s", input)
-	}
-	if !isValidUnicode(input) {
-		return errors.New("not valid unicode")
-	}
-	return nil
-}
-
 func formatPromptError(err error) error {
 	switch err {
 	case promptui.ErrAbort:
diff --git a/validator/accounts/v2/wallet.go b/validator/accounts/v2/wallet.go
index 1dd65b84882..150b936f233 100644
--- a/validator/accounts/v2/wallet.go
+++ b/validator/accounts/v2/wallet.go
@@ -15,6 +15,7 @@ import (
 	petname "github.com/dustinkirkland/golang-petname"
 	"github.com/logrusorgru/aurora"
 	"github.com/pkg/errors"
+	"github.com/prysmaticlabs/prysm/shared/bytesutil"
 	"github.com/prysmaticlabs/prysm/validator/flags"
 	v2keymanager "github.com/prysmaticlabs/prysm/validator/keymanager/v2"
 	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/derived"
@@ -25,23 +26,7 @@ import (
 	keystorev4 "github.com/wealdtech/go-eth2-wallet-encryptor-keystorev4"
 )
 
-var (
-	// ErrNoWalletFound signifies there was no wallet directory found on-disk.
-	ErrNoWalletFound = errors.New(
-		"no wallet found at path, please create a new wallet using `./prysm.sh validator wallet-v2 create`",
-	)
-	keymanagerKindSelections = map[v2keymanager.Kind]string{
-		v2keymanager.Derived: "HD Wallet (Recommended)",
-		v2keymanager.Direct:  "Non-HD Wallet (Most Basic)",
-		v2keymanager.Remote:  "Remote Signing Wallet (Advanced)",
-	}
-)
-
 const (
-	// WalletDefaultDirName for accounts-v2.
-	WalletDefaultDirName = ".prysm-wallet-v2"
-	// PasswordsDefaultDirName where account passwords are stored.
-	PasswordsDefaultDirName = ".prysm-wallet-v2-passwords"
 	// KeymanagerConfigFileName for the keymanager used by the wallet: direct, derived, or remote.
 	KeymanagerConfigFileName = "keymanageropts.json"
 	// DirectoryPermissions for directories created under the wallet path.
@@ -49,10 +34,19 @@ const (
 )
 
 var (
+	// ErrNoWalletFound signifies there was no wallet directory found on-disk.
+	ErrNoWalletFound = errors.New(
+		"no wallet found at path, please create a new wallet using `./prysm.sh validator wallet-v2 create`",
+	)
 	// ErrWalletExists is an error returned when a wallet already exists in the path provided.
 	ErrWalletExists = errors.New("you already have a wallet at the specified path. You can " +
 		"edit your wallet configuration by running ./prysm.sh validator wallet-v2 edit-config",
 	)
+	keymanagerKindSelections = map[v2keymanager.Kind]string{
+		v2keymanager.Derived: "HD Wallet (Recommended)",
+		v2keymanager.Direct:  "Non-HD Wallet (Most Basic)",
+		v2keymanager.Remote:  "Remote Signing Wallet (Advanced)",
+	}
 )
 
 // Wallet is a primitive in Prysm's v2 account management which
@@ -60,6 +54,7 @@ var (
 // and providing secure access to eth2 secrets depending on an
 // associated keymanager (either direct, derived, or remote signing enabled).
 type Wallet struct {
+	walletDir      string
 	accountsPath   string
 	passwordsDir   string
 	keymanagerKind v2keymanager.Kind
@@ -77,9 +72,6 @@ func NewWallet(
 	keymanagerKind v2keymanager.Kind,
 ) (*Wallet, error) {
 	walletDir, err := inputDirectory(cliCtx, walletDirPromptText, flags.WalletDirFlag)
-	if err != nil && !errors.Is(err, ErrNoWalletFound) {
-		return nil, errors.Wrap(err, "could not parse wallet directory")
-	}
 	// Check if the user has a wallet at the specified path.
 	// If a user does not have a wallet, we instantiate one
 	// based on specified options.
@@ -94,9 +86,15 @@ func NewWallet(
 	w := &Wallet{
 		accountsPath:   accountsPath,
 		keymanagerKind: keymanagerKind,
+		walletDir:      walletDir,
 	}
 	if keymanagerKind == v2keymanager.Derived {
-		walletPassword, err := inputPassword(cliCtx, newWalletPasswordPromptText, confirmPass)
+		walletPassword, err := inputPassword(
+			cliCtx,
+			flags.WalletPasswordFileFlag,
+			newWalletPasswordPromptText,
+			confirmPass,
+		)
 		if err != nil {
 			return nil, errors.Wrap(err, "could not get password")
 		}
@@ -121,11 +119,16 @@ func NewWallet(
 func OpenWallet(cliCtx *cli.Context) (*Wallet, error) {
 	// Read a wallet's directory from user input.
 	walletDir, err := inputDirectory(cliCtx, walletDirPromptText, flags.WalletDirFlag)
-	if errors.Is(err, ErrNoWalletFound) {
-		return nil, errors.New("no wallet found, create a new one with ./prysm.sh validator wallet-v2 create")
-	} else if err != nil {
+	if err != nil {
 		return nil, err
 	}
+	ok, err := hasDir(walletDir)
+	if err != nil {
+		return nil, errors.Wrap(err, "could not parse wallet directory")
+	}
+	if !ok {
+		return nil, ErrNoWalletFound
+	}
 	keymanagerKind, err := readKeymanagerKindFromWalletPath(walletDir)
 	if err != nil {
 		return nil, errors.Wrap(err, "could not read keymanager kind for wallet")
@@ -136,19 +139,31 @@ func OpenWallet(cliCtx *cli.Context) (*Wallet, error) {
 		keymanagerKind: keymanagerKind,
 	}
 	if keymanagerKind == v2keymanager.Derived {
-		walletPassword, err := inputPassword(cliCtx, walletPasswordPromptText, noConfirmPass)
+		walletPassword, err := inputPassword(
+			cliCtx,
+			flags.WalletPasswordFileFlag,
+			walletPasswordPromptText,
+			noConfirmPass,
+		)
 		if err != nil {
 			return nil, err
 		}
 		w.walletPassword = walletPassword
 	}
 	if keymanagerKind == v2keymanager.Direct {
-		passwordsDir, err := inputDirectory(cliCtx, passwordsDirPromptText, flags.WalletPasswordsDirFlag)
+		keymanagerCfg, err := w.ReadKeymanagerConfigFromDisk(context.Background())
 		if err != nil {
 			return nil, err
 		}
-		w.passwordsDir = passwordsDir
+		directCfg, err := direct.UnmarshalConfigFile(keymanagerCfg)
+		if err != nil {
+			return nil, err
+		}
+		w.passwordsDir = directCfg.AccountPasswordsDirectory
+		au := aurora.NewAurora(true)
+		log.Infof("%s %s", au.BrightMagenta("(account passwords path)"), w.passwordsDir)
 	}
+	log.Info("Successfully opened wallet")
 	return w, nil
 }
 
@@ -380,12 +395,12 @@ func (w *Wallet) ReadPasswordFromDisk(ctx context.Context, passwordFileName stri
 
 // enterPasswordForAccount checks if a user has a password specified for the new account
 // either from a file or from stdin. Then, it saves the password to the wallet.
-func (w *Wallet) enterPasswordForAccount(cliCtx *cli.Context, accountName string) error {
+func (w *Wallet) enterPasswordForAccount(cliCtx *cli.Context, accountName string, pubKey []byte) error {
 	au := aurora.NewAurora(true)
 	var password string
 	var err error
-	if cliCtx.IsSet(flags.PasswordFileFlag.Name) {
-		passwordFilePath := cliCtx.String(flags.PasswordFileFlag.Name)
+	if cliCtx.IsSet(flags.AccountPasswordFileFlag.Name) {
+		passwordFilePath := cliCtx.String(flags.AccountPasswordFileFlag.Name)
 		data, err := ioutil.ReadFile(passwordFilePath)
 		if err != nil {
 			return err
@@ -393,7 +408,7 @@ func (w *Wallet) enterPasswordForAccount(cliCtx *cli.Context, accountName string
 		password = string(data)
 		err = w.checkPasswordForAccount(accountName, password)
 		if err != nil && strings.Contains(err.Error(), "invalid checksum") {
-			return fmt.Errorf("invalid password entered for account %s", accountName)
+			return fmt.Errorf("invalid password entered for account with public key %#x", pubKey)
 		}
 		if err != nil {
 			return err
@@ -403,7 +418,11 @@ func (w *Wallet) enterPasswordForAccount(cliCtx *cli.Context, accountName string
 		// Loop asking for the password until the user enters it correctly.
 		for attemptingPassword {
 			// Ask the user for the password to their account.
-			password, err = inputWeakPassword(cliCtx, fmt.Sprintf(passwordForAccountPromptText, au.BrightGreen(accountName)))
+			password, err = inputWeakPassword(
+				cliCtx,
+				flags.AccountPasswordFileFlag,
+				fmt.Sprintf(passwordForAccountPromptText, bytesutil.Trunc(pubKey)),
+			)
 			if err != nil {
 				return errors.Wrap(err, "could not input password")
 			}
@@ -474,6 +493,27 @@ func readKeymanagerKindFromWalletPath(walletPath string) (v2keymanager.Kind, err
 	return v2keymanager.ParseKind(list[0])
 }
 
+func createOrOpenWallet(cliCtx *cli.Context, creationFunc func(cliCtx *cli.Context) (*Wallet, error)) (*Wallet, error) {
+	directory := cliCtx.String(flags.WalletDirFlag.Name)
+	ok, err := hasDir(directory)
+	if err != nil {
+		return nil, errors.Wrapf(err, "could not check if wallet dir %s exists", directory)
+	}
+	var wallet *Wallet
+	if !ok {
+		wallet, err = creationFunc(cliCtx)
+		if err != nil {
+			return nil, errors.Wrapf(err, "Could not create wallet")
+		}
+	} else {
+		wallet, err = OpenWallet(cliCtx)
+		if err != nil {
+			return nil, errors.Wrap(err, "could not open wallet")
+		}
+	}
+	return wallet, nil
+}
+
 // Returns true if a file is not a directory and exists
 // at the specified path.
 func fileExists(filename string) bool {
diff --git a/validator/accounts/v2/wallet_create.go b/validator/accounts/v2/wallet_create.go
index 4058b67e241..47279a335d3 100644
--- a/validator/accounts/v2/wallet_create.go
+++ b/validator/accounts/v2/wallet_create.go
@@ -15,53 +15,55 @@ import (
 // CreateWallet from user input with a desired keymanager. If a
 // wallet already exists in the path, it suggests the user alternatives
 // such as how to edit their existing wallet configuration.
-func CreateWallet(cliCtx *cli.Context) error {
+func CreateWallet(cliCtx *cli.Context) (*Wallet, error) {
 	keymanagerKind, err := inputKeymanagerKind(cliCtx)
 	if err != nil {
-		return err
+		return nil, err
 	}
 	w, err := NewWallet(cliCtx, keymanagerKind)
 	if err != nil && !errors.Is(err, ErrWalletExists) {
-		return errors.Wrap(err, "could not check if wallet directory exists")
+		return nil, errors.Wrap(err, "could not check if wallet directory exists")
 	}
 	if errors.Is(err, ErrWalletExists) {
-		return ErrWalletExists
+		return nil, ErrWalletExists
 	}
 	switch w.KeymanagerKind() {
 	case v2keymanager.Direct:
 		if err = createDirectKeymanagerWallet(cliCtx, w); err != nil {
-			return errors.Wrap(err, "could not initialize wallet with direct keymanager")
+			return nil, errors.Wrap(err, "could not initialize wallet with direct keymanager")
 		}
-		log.WithField("wallet-path", w.accountsPath).Infof(
+		log.WithField("wallet-path", w.walletDir).Info(
 			"Successfully created wallet with on-disk keymanager configuration. " +
 				"Make a new validator account with ./prysm.sh validator accounts-v2 create",
 		)
 	case v2keymanager.Derived:
 		if err = createDerivedKeymanagerWallet(cliCtx, w); err != nil {
-			return errors.Wrap(err, "could not initialize wallet with derived keymanager")
+			return nil, errors.Wrap(err, "could not initialize wallet with derived keymanager")
 		}
-		log.WithField("wallet-path", w.accountsPath).Infof(
+		log.WithField("wallet-path", w.walletDir).Info(
 			"Successfully created HD wallet and saved configuration to disk. " +
 				"Make a new validator account with ./prysm.sh validator accounts-2 create",
 		)
 	case v2keymanager.Remote:
 		if err = createRemoteKeymanagerWallet(cliCtx, w); err != nil {
-			return errors.Wrap(err, "could not initialize wallet with remote keymanager")
+			return nil, errors.Wrap(err, "could not initialize wallet with remote keymanager")
 		}
-		log.WithField("wallet-path", w.accountsPath).Infof(
+		log.WithField("wallet-path", w.walletDir).Info(
 			"Successfully created wallet with remote keymanager configuration",
 		)
 	default:
-		return errors.Wrapf(err, "keymanager type %s is not supported", w.KeymanagerKind())
+		return nil, errors.Wrapf(err, "keymanager type %s is not supported", w.KeymanagerKind())
 	}
-	return nil
+	return w, nil
 }
 
 func createDirectKeymanagerWallet(cliCtx *cli.Context, wallet *Wallet) error {
 	if err := wallet.SaveWallet(); err != nil {
 		return errors.Wrap(err, "could not save wallet to disk")
 	}
-	keymanagerConfig, err := direct.MarshalConfigFile(context.Background(), direct.DefaultConfig())
+	defaultConfig := direct.DefaultConfig()
+	defaultConfig.AccountPasswordsDirectory = wallet.passwordsDir
+	keymanagerConfig, err := direct.MarshalConfigFile(context.Background(), defaultConfig)
 	if err != nil {
 		return errors.Wrap(err, "could not marshal keymanager config file")
 	}
diff --git a/validator/accounts/v2/wallet_create_test.go b/validator/accounts/v2/wallet_create_test.go
index 576b3f88a5e..1ee60b4adb7 100644
--- a/validator/accounts/v2/wallet_create_test.go
+++ b/validator/accounts/v2/wallet_create_test.go
@@ -6,6 +6,7 @@ import (
 	"os"
 	"testing"
 
+	"github.com/pkg/errors"
 	"github.com/prysmaticlabs/prysm/shared/testutil"
 	"github.com/prysmaticlabs/prysm/shared/testutil/assert"
 	"github.com/prysmaticlabs/prysm/shared/testutil/require"
@@ -14,9 +15,43 @@ import (
 	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/derived"
 	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/direct"
 	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/remote"
+	logTest "github.com/sirupsen/logrus/hooks/test"
 	"github.com/urfave/cli/v2"
 )
 
+func TestCreateOrOpenWallet(t *testing.T) {
+	hook := logTest.NewGlobal()
+	walletDir, passwordsDir, _ := setupWalletAndPasswordsDir(t)
+	cliCtx := setupWalletCtx(t, &testWalletConfig{
+		walletDir:      walletDir,
+		passwordsDir:   passwordsDir,
+		keymanagerKind: v2keymanager.Direct,
+	})
+	createDirectWallet := func(cliCtx *cli.Context) (*Wallet, error) {
+		w, err := NewWallet(cliCtx, v2keymanager.Direct)
+		if err != nil && !errors.Is(err, ErrWalletExists) {
+			return nil, errors.Wrap(err, "could not create new wallet")
+		}
+		if err = createDirectKeymanagerWallet(cliCtx, w); err != nil {
+			return nil, errors.Wrap(err, "could not initialize wallet")
+		}
+		log.WithField("wallet-path", w.walletDir).Info(
+			"Successfully created new wallet",
+		)
+		return w, err
+	}
+	createdWallet, err := createOrOpenWallet(cliCtx, createDirectWallet)
+	require.NoError(t, err)
+	testutil.AssertLogsContain(t, hook, "Successfully created new wallet")
+	testutil.AssertLogsDoNotContain(t, hook, "Successfully opened wallet")
+
+	openedWallet, err := createOrOpenWallet(cliCtx, createDirectWallet)
+	require.NoError(t, err)
+	testutil.AssertLogsContain(t, hook, "Successfully opened wallet")
+	assert.Equal(t, createdWallet.KeymanagerKind(), openedWallet.KeymanagerKind())
+	assert.Equal(t, createdWallet.AccountsDir(), openedWallet.AccountsDir())
+}
+
 func TestCreateWallet_Direct(t *testing.T) {
 	walletDir, passwordsDir, _ := setupWalletAndPasswordsDir(t)
 	cliCtx := setupWalletCtx(t, &testWalletConfig{
@@ -26,7 +61,8 @@ func TestCreateWallet_Direct(t *testing.T) {
 	})
 
 	// We attempt to create the wallet.
-	require.NoError(t, CreateWallet(cliCtx))
+	_, err := CreateWallet(cliCtx)
+	require.NoError(t, err)
 
 	// We attempt to open the newly created wallet.
 	ctx := context.Background()
@@ -40,20 +76,23 @@ func TestCreateWallet_Direct(t *testing.T) {
 	assert.NoError(t, err)
 
 	// We assert the created configuration was as desired.
-	assert.DeepEqual(t, direct.DefaultConfig(), cfg)
+	wantedCfg := direct.DefaultConfig()
+	wantedCfg.AccountPasswordsDirectory = passwordsDir
+	assert.DeepEqual(t, wantedCfg, cfg)
 }
 
 func TestCreateWallet_Derived(t *testing.T) {
 	walletDir, passwordsDir, passwordFile := setupWalletAndPasswordsDir(t)
 	cliCtx := setupWalletCtx(t, &testWalletConfig{
-		walletDir:      walletDir,
-		passwordsDir:   passwordsDir,
-		passwordFile:   passwordFile,
-		keymanagerKind: v2keymanager.Derived,
+		walletDir:          walletDir,
+		passwordsDir:       passwordsDir,
+		walletPasswordFile: passwordFile,
+		keymanagerKind:     v2keymanager.Derived,
 	})
 
 	// We attempt to create the wallet.
-	require.NoError(t, CreateWallet(cliCtx))
+	_, err := CreateWallet(cliCtx)
+	require.NoError(t, err)
 
 	// We attempt to open the newly created wallet.
 	ctx := context.Background()
@@ -101,7 +140,8 @@ func TestCreateWallet_Remote(t *testing.T) {
 	cliCtx := cli.NewContext(&app, set, nil)
 
 	// We attempt to create the wallet.
-	require.NoError(t, CreateWallet(cliCtx))
+	_, err := CreateWallet(cliCtx)
+	require.NoError(t, err)
 
 	// We attempt to open the newly created wallet.
 	ctx := context.Background()
diff --git a/validator/accounts/v2/wallet_edit.go b/validator/accounts/v2/wallet_edit.go
index e43e50d4480..41e3a613d6f 100644
--- a/validator/accounts/v2/wallet_edit.go
+++ b/validator/accounts/v2/wallet_edit.go
@@ -5,7 +5,9 @@ import (
 	"fmt"
 
 	"github.com/pkg/errors"
+	"github.com/prysmaticlabs/prysm/validator/flags"
 	v2keymanager "github.com/prysmaticlabs/prysm/validator/keymanager/v2"
+	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/direct"
 	"github.com/prysmaticlabs/prysm/validator/keymanager/v2/remote"
 	"github.com/urfave/cli/v2"
 )
@@ -21,7 +23,30 @@ func EditWalletConfiguration(cliCtx *cli.Context) error {
 	}
 	switch wallet.KeymanagerKind() {
 	case v2keymanager.Direct:
-		return errors.New("no configuration options available to edit for direct keymanager")
+		enc, err := wallet.ReadKeymanagerConfigFromDisk(ctx)
+		if err != nil {
+			return errors.Wrap(err, "could not read config")
+		}
+		cfg, err := direct.UnmarshalConfigFile(enc)
+		if err != nil {
+			return errors.Wrap(err, "could not unmarshal config")
+		}
+		log.Info("Current configuration")
+		// Prints the current configuration to stdout.
+		fmt.Println(cfg)
+		passwordsDir, err := inputDirectory(cliCtx, passwordsDirPromptText, flags.WalletPasswordsDirFlag)
+		if err != nil {
+			return errors.Wrap(err, "could not get password directory")
+		}
+		defaultCfg := direct.DefaultConfig()
+		defaultCfg.AccountPasswordsDirectory = passwordsDir
+		encodedCfg, err := direct.MarshalConfigFile(ctx, defaultCfg)
+		if err != nil {
+			return errors.Wrap(err, "could not marshal config file")
+		}
+		if err := wallet.WriteKeymanagerConfigToDisk(ctx, encodedCfg); err != nil {
+			return errors.Wrap(err, "could not write config to disk")
+		}
 	case v2keymanager.Derived:
 		return errors.New("derived keymanager is not yet supported")
 	case v2keymanager.Remote:
@@ -33,8 +58,9 @@ func EditWalletConfiguration(cliCtx *cli.Context) error {
 		if err != nil {
 			return errors.Wrap(err, "could not unmarshal config")
 		}
-		log.Infof("Current configuration")
-		fmt.Printf("%s\n", cfg)
+		log.Info("Current configuration")
+		// Prints the current configuration to stdout.
+		fmt.Println(cfg)
 		newCfg, err := inputRemoteKeymanagerConfig(cliCtx)
 		if err != nil {
 			return errors.Wrap(err, "could not get keymanager config")
diff --git a/validator/accounts/v2/wallet_edit_test.go b/validator/accounts/v2/wallet_edit_test.go
index 60a9686be6d..5cdde2a4d50 100644
--- a/validator/accounts/v2/wallet_edit_test.go
+++ b/validator/accounts/v2/wallet_edit_test.go
@@ -58,9 +58,10 @@ func TestEditWalletConfiguration(t *testing.T) {
 	assert.NoError(t, set.Set(flags.RemoteSignerCACertPathFlag.Name, wantCfg.RemoteCertificate.CACertPath))
 	cliCtx = cli.NewContext(&app, set, nil)
 
-	assert.NoError(t, EditWalletConfiguration(cliCtx))
+	err = EditWalletConfiguration(cliCtx)
+	require.NoError(t, err)
 	encoded, err := wallet.ReadKeymanagerConfigFromDisk(ctx)
-	assert.NoError(t, err)
+	require.NoError(t, err)
 
 	cfg, err := remote.UnmarshalConfigFile(encoded)
 	assert.NoError(t, err)
diff --git a/validator/accounts/v2/wallet_recover_test.go b/validator/accounts/v2/wallet_recover_test.go
index 15557e17c6e..28c5a83cdcc 100644
--- a/validator/accounts/v2/wallet_recover_test.go
+++ b/validator/accounts/v2/wallet_recover_test.go
@@ -39,13 +39,13 @@ func TestRecoverDerivedWallet(t *testing.T) {
 	set := flag.NewFlagSet("test", 0)
 	set.String(flags.WalletDirFlag.Name, walletDir, "")
 	set.String(flags.WalletPasswordsDirFlag.Name, passwordsDir, "")
-	set.String(flags.PasswordFileFlag.Name, passwordFilePath, "")
+	set.String(flags.WalletPasswordFileFlag.Name, passwordFilePath, "")
 	set.String(flags.KeymanagerKindFlag.Name, v2keymanager.Derived.String(), "")
 	set.String(flags.MnemonicFileFlag.Name, mnemonicFilePath, "")
 	set.Int64(flags.NumAccountsFlag.Name, numAccounts, "")
 	assert.NoError(t, set.Set(flags.WalletDirFlag.Name, walletDir))
 	assert.NoError(t, set.Set(flags.WalletPasswordsDirFlag.Name, passwordsDir))
-	assert.NoError(t, set.Set(flags.PasswordFileFlag.Name, passwordFilePath))
+	assert.NoError(t, set.Set(flags.WalletPasswordFileFlag.Name, passwordFilePath))
 	assert.NoError(t, set.Set(flags.KeymanagerKindFlag.Name, v2keymanager.Derived.String()))
 	assert.NoError(t, set.Set(flags.MnemonicFileFlag.Name, mnemonicFilePath))
 	assert.NoError(t, set.Set(flags.NumAccountsFlag.Name, strconv.Itoa(int(numAccounts))))
diff --git a/validator/accounts/v2/wallet_test.go b/validator/accounts/v2/wallet_test.go
index 6e7cd382e1f..00d769c13dd 100644
--- a/validator/accounts/v2/wallet_test.go
+++ b/validator/accounts/v2/wallet_test.go
@@ -28,14 +28,15 @@ func init() {
 }
 
 type testWalletConfig struct {
-	walletDir        string
-	passwordsDir     string
-	exportDir        string
-	keysDir          string
-	accountsToExport string
-	passwordFile     string
-	numAccounts      int64
-	keymanagerKind   v2keymanager.Kind
+	walletDir           string
+	passwordsDir        string
+	exportDir           string
+	keysDir             string
+	accountsToExport    string
+	walletPasswordFile  string
+	accountPasswordFile string
+	numAccounts         int64
+	keymanagerKind      v2keymanager.Kind
 }
 
 func setupWalletCtx(
@@ -50,7 +51,8 @@ func setupWalletCtx(
 	set.String(flags.KeymanagerKindFlag.Name, cfg.keymanagerKind.String(), "")
 	set.String(flags.BackupDirFlag.Name, cfg.exportDir, "")
 	set.String(flags.AccountsFlag.Name, cfg.accountsToExport, "")
-	set.String(flags.PasswordFileFlag.Name, cfg.passwordFile, "")
+	set.String(flags.WalletPasswordFileFlag.Name, cfg.walletPasswordFile, "")
+	set.String(flags.AccountPasswordFileFlag.Name, cfg.accountPasswordFile, "")
 	set.Bool(flags.SkipMnemonicConfirmFlag.Name, true, "")
 	set.Int64(flags.NumAccountsFlag.Name, cfg.numAccounts, "")
 	assert.NoError(tb, set.Set(flags.WalletDirFlag.Name, cfg.walletDir))
@@ -59,7 +61,8 @@ func setupWalletCtx(
 	assert.NoError(tb, set.Set(flags.KeymanagerKindFlag.Name, cfg.keymanagerKind.String()))
 	assert.NoError(tb, set.Set(flags.BackupDirFlag.Name, cfg.exportDir))
 	assert.NoError(tb, set.Set(flags.AccountsFlag.Name, cfg.accountsToExport))
-	assert.NoError(tb, set.Set(flags.PasswordFileFlag.Name, cfg.passwordFile))
+	assert.NoError(tb, set.Set(flags.WalletPasswordFileFlag.Name, cfg.walletPasswordFile))
+	assert.NoError(tb, set.Set(flags.AccountPasswordFileFlag.Name, cfg.accountPasswordFile))
 	assert.NoError(tb, set.Set(flags.SkipMnemonicConfirmFlag.Name, "true"))
 	assert.NoError(tb, set.Set(flags.NumAccountsFlag.Name, strconv.Itoa(int(cfg.numAccounts))))
 	return cli.NewContext(&app, set, nil)
@@ -92,8 +95,8 @@ func TestCreateAndReadWallet(t *testing.T) {
 		keymanagerKind: v2keymanager.Direct,
 	})
 	wallet, err := NewWallet(cliCtx, v2keymanager.Direct)
-	require.NoError(t, wallet.SaveWallet())
 	require.NoError(t, err)
+	require.NoError(t, createDirectKeymanagerWallet(cliCtx, wallet))
 	// We should be able to now read the wallet as well.
 	_, err = OpenWallet(cliCtx)
 	require.NoError(t, err)
diff --git a/validator/flags/flags.go b/validator/flags/flags.go
index db44f996eaa..34676369936 100644
--- a/validator/flags/flags.go
+++ b/validator/flags/flags.go
@@ -12,6 +12,13 @@ import (
 	"github.com/urfave/cli/v2"
 )
 
+const (
+	// WalletDefaultDirName for accounts-v2.
+	WalletDefaultDirName = "prysm-wallet-v2"
+	// PasswordsDefaultDirName where account-v2 passwords are stored.
+	PasswordsDefaultDirName = "prysm-wallet-v2-passwords"
+)
+
 var (
 	// DisableAccountMetricsFlag defines the graffiti value included in proposed blocks, default false.
 	DisableAccountMetricsFlag = &cli.BoolFlag{
@@ -124,19 +131,24 @@ var (
 	WalletDirFlag = &cli.StringFlag{
 		Name:  "wallet-dir",
 		Usage: "Path to a wallet directory on-disk for Prysm validator accounts",
-		Value: DefaultValidatorDir(),
+		Value: filepath.Join(DefaultValidatorDir(), WalletDefaultDirName),
 	}
 	// WalletPasswordsDirFlag defines the path for a passwords directory for
 	// Prysm accounts-v2.
 	WalletPasswordsDirFlag = &cli.StringFlag{
 		Name:  "passwords-dir",
 		Usage: "Path to a directory on-disk where account passwords are stored",
-		Value: DefaultValidatorDir(),
+		Value: filepath.Join(DefaultValidatorDir(), PasswordsDefaultDirName),
+	}
+	// AccountPasswordFileFlag is path to a file containing a password for a new validator account.
+	AccountPasswordFileFlag = &cli.StringFlag{
+		Name:  "account-password-file",
+		Usage: "Path to a plain-text, .txt file containing a password for a new validator account",
 	}
-	// PasswordFileFlag is used to enter a file to get a password for new account creation, non-interactively.
-	PasswordFileFlag = &cli.StringFlag{
-		Name:  "password-file",
-		Usage: "Path to a plaintext password.txt file",
+	// WalletPasswordFileFlag is the path to a file containing your wallet password.
+	WalletPasswordFileFlag = &cli.StringFlag{
+		Name:  "wallet-password-file",
+		Usage: "Path to a plain-text, .txt file containing your wallet password",
 	}
 	// MnemonicFileFlag is used to enter a file to mnemonic phrase for new wallet creation, non-interactively.
 	MnemonicFileFlag = &cli.StringFlag{
diff --git a/validator/keymanager/v2/direct/BUILD.bazel b/validator/keymanager/v2/direct/BUILD.bazel
index d979569a86f..bdafaa7ee4c 100644
--- a/validator/keymanager/v2/direct/BUILD.bazel
+++ b/validator/keymanager/v2/direct/BUILD.bazel
@@ -20,8 +20,10 @@ go_library(
         "//shared/petnames:go_default_library",
         "//shared/roughtime:go_default_library",
         "//validator/accounts/v2/iface:go_default_library",
+        "//validator/flags:go_default_library",
         "//validator/keymanager/v2:go_default_library",
         "@com_github_google_uuid//:go_default_library",
+        "@com_github_logrusorgru_aurora//:go_default_library",
         "@com_github_pkg_errors//:go_default_library",
         "@com_github_prysmaticlabs_go_ssz//:go_default_library",
         "@com_github_sirupsen_logrus//:go_default_library",
diff --git a/validator/keymanager/v2/direct/direct.go b/validator/keymanager/v2/direct/direct.go
index 62d9f59748c..2bf0b9c8557 100644
--- a/validator/keymanager/v2/direct/direct.go
+++ b/validator/keymanager/v2/direct/direct.go
@@ -9,9 +9,11 @@ import (
 	"io/ioutil"
 	"os"
 	"path/filepath"
+	"strings"
 	"sync"
 
 	"github.com/google/uuid"
+	"github.com/logrusorgru/aurora"
 	"github.com/pkg/errors"
 	"github.com/prysmaticlabs/go-ssz"
 	validatorpb "github.com/prysmaticlabs/prysm/proto/validator/accounts/v2"
@@ -21,6 +23,7 @@ import (
 	"github.com/prysmaticlabs/prysm/shared/petnames"
 	"github.com/prysmaticlabs/prysm/shared/roughtime"
 	"github.com/prysmaticlabs/prysm/validator/accounts/v2/iface"
+	"github.com/prysmaticlabs/prysm/validator/flags"
 	v2keymanager "github.com/prysmaticlabs/prysm/validator/keymanager/v2"
 	"github.com/sirupsen/logrus"
 	keystorev4 "github.com/wealdtech/go-eth2-wallet-encryptor-keystorev4"
@@ -47,7 +50,8 @@ const (
 
 // Config for a direct keymanager.
 type Config struct {
-	EIPVersion string `json:"direct_eip_version"`
+	EIPVersion                string `json:"direct_eip_version"`
+	AccountPasswordsDirectory string `json:"direct_accounts_passwords_directory"`
 }
 
 // Keymanager implementation for direct keystores utilizing EIP-2335.
@@ -61,7 +65,8 @@ type Keymanager struct {
 // DefaultConfig for a direct keymanager implementation.
 func DefaultConfig() *Config {
 	return &Config{
-		EIPVersion: eipVersion,
+		EIPVersion:                eipVersion,
+		AccountPasswordsDirectory: flags.WalletPasswordsDirFlag.Value,
 	}
 }
 
@@ -106,6 +111,30 @@ func MarshalConfigFile(ctx context.Context, cfg *Config) ([]byte, error) {
 	return json.MarshalIndent(cfg, "", "\t")
 }
 
+// Config for the direct keymanager.
+func (dr *Keymanager) Config() *Config {
+	return dr.cfg
+}
+
+// String pretty-print of a direct keymanager configuration.
+func (c *Config) String() string {
+	au := aurora.NewAurora(true)
+	var b strings.Builder
+	strAddr := fmt.Sprintf("%s: %s\n", au.BrightMagenta("EIP Version"), c.EIPVersion)
+	if _, err := b.WriteString(strAddr); err != nil {
+		log.Error(err)
+		return ""
+	}
+	strCrt := fmt.Sprintf(
+		"%s: %s\n", au.BrightMagenta("Accounts Passwords Directory"), c.AccountPasswordsDirectory,
+	)
+	if _, err := b.WriteString(strCrt); err != nil {
+		log.Error(err)
+		return ""
+	}
+	return b.String()
+}
+
 // ValidatingAccountNames for a direct keymanager.
 func (dr *Keymanager) ValidatingAccountNames() ([]string, error) {
 	return dr.wallet.ListDirs()
diff --git a/validator/main.go b/validator/main.go
index ad101700478..55e72804db2 100644
--- a/validator/main.go
+++ b/validator/main.go
@@ -72,7 +72,7 @@ var appFlags = []cli.Flag{
 	flags.SlasherRPCProviderFlag,
 	flags.SlasherCertFlag,
 	flags.WalletPasswordsDirFlag,
-	flags.PasswordFileFlag,
+	flags.WalletPasswordFileFlag,
 	flags.WalletDirFlag,
 	cmd.MinimalConfigFlag,
 	cmd.E2EConfigFlag,
diff --git a/validator/usage.go b/validator/usage.go
index 025f51980dd..3fc1ff648ad 100644
--- a/validator/usage.go
+++ b/validator/usage.go
@@ -83,7 +83,6 @@ var appHelpFlagGroups = []flagGroup{
 			flags.KeyManagerOpts,
 			flags.KeystorePathFlag,
 			flags.PasswordFlag,
-			flags.PasswordFileFlag,
 			flags.DisablePenaltyRewardLogFlag,
 			flags.UnencryptedKeysFlag,
 			flags.GraffitiFlag,
@@ -98,6 +97,7 @@ var appHelpFlagGroups = []flagGroup{
 			flags.DisableAccountMetricsFlag,
 			flags.WalletDirFlag,
 			flags.WalletPasswordsDirFlag,
+			flags.WalletPasswordFileFlag,
 		},
 	},
 	{