diff --git a/e2e/vault-picker-local.spec.ts b/e2e/vault-picker-local.spec.ts
new file mode 100644
index 00000000..3ab0b54a
--- /dev/null
+++ b/e2e/vault-picker-local.spec.ts
@@ -0,0 +1,39 @@
+import { test, expect } from '@playwright/test'
+
+test.describe('Vault Picker Local Options', () => {
+  test.beforeEach(async ({ page }) => {
+    await page.goto('http://localhost:5240')
+    await page.waitForSelector('text=notes', { timeout: 10000 })
+  })
+
+  test('vault menu shows local folder options', async ({ page }) => {
+    // Screenshot before opening menu
+    await page.screenshot({ path: 'test-results/vault-picker-before.png', fullPage: true })
+
+    // Click the vault button in the status bar to open the menu
+    const vaultButton = page.locator('[title="Switch vault"]')
+    await expect(vaultButton).toBeVisible()
+    await vaultButton.click()
+
+    // Wait for menu to appear
+    await page.waitForTimeout(300)
+
+    // Verify all three options are visible
+    await expect(page.locator('text=Open local folder')).toBeVisible()
+    await expect(page.locator('text=Create new vault')).toBeVisible()
+    await expect(page.locator('text=Connect GitHub repo')).toBeVisible()
+
+    // Screenshot with menu open showing all options
+    await page.screenshot({ path: 'test-results/vault-picker-menu-open.png', fullPage: true })
+  })
+
+  test('vault menu options have correct test IDs', async ({ page }) => {
+    const vaultButton = page.locator('[title="Switch vault"]')
+    await vaultButton.click()
+    await page.waitForTimeout(200)
+
+    await expect(page.locator('[data-testid="vault-menu-open-local"]')).toBeVisible()
+    await expect(page.locator('[data-testid="vault-menu-create-new"]')).toBeVisible()
+    await expect(page.locator('[data-testid="vault-menu-connect-github"]')).toBeVisible()
+  })
+})