diff --git a/ui/src/components/BaseFormView/BaseFormView.tsx b/ui/src/components/BaseFormView/BaseFormView.tsx
index 5a49c27393..58e0fa0ed6 100644
--- a/ui/src/components/BaseFormView/BaseFormView.tsx
+++ b/ui/src/components/BaseFormView/BaseFormView.tsx
@@ -749,10 +749,14 @@ class BaseFormView extends PureComponent<BaseFormProps, BaseFormState> {
         const body = new URLSearchParams();
         Object.keys(this.datadict).forEach((key) => {
             if (this.datadict[key] != null) {
+                const entity = this.entities?.find((x) => x?.field === key);
+                if ((entity as any)?.encrypted && this.datadict[key] === '******') {
+                    return;
+                }
                 // Custom logic for only sending file content in payload, not file name and file size.
                 if (
                     typeof this.datadict[key] === 'object' &&
-                    this.entities?.find((x) => x?.field === key)?.type === 'file'
+                    entity?.type === 'file'
                 ) {
                     const { fileContent } = this.datadict?.[key] as { fileContent: string };
                     body.append(key, fileContent);
diff --git a/ui/src/components/BaseFormView/BaseFormViewUtils.ts b/ui/src/components/BaseFormView/BaseFormViewUtils.ts
index e3a4fce849..88b51a62fe 100644
--- a/ui/src/components/BaseFormView/BaseFormViewUtils.ts
+++ b/ui/src/components/BaseFormView/BaseFormViewUtils.ts
@@ -58,7 +58,10 @@ export const mapEntityIntoBaseForViewEntityObject = (
         if (props.mode === MODE_EDIT) {
             tempEntity.value =
                 typeof currentInput?.[e.field] !== 'undefined' ? currentInput?.[e.field] : null;
-            tempEntity.value = e.encrypted ? '' : tempEntity.value;
+            // For encrypted fields, preserve masked values (like "******") to show user that value exists
+            if (e.encrypted && !currentInput?.[e.field]) {
+                tempEntity.value = '';
+            }
             tempEntity.display =
                 typeof e?.options?.display !== 'undefined' ? e.options.display : true;
             if (oauthType) {
@@ -111,7 +114,10 @@ export const mapEntityIntoBaseForViewEntityObject = (
                 typeof currentInput?.[e.field] !== 'undefined'
                     ? currentInput?.[e.field]
                     : e.defaultValue;
-            tempEntity.value = e.encrypted ? '' : tempEntity.value;
+            // For encrypted fields, preserve masked values (like "******") to show user that value exists
+            if (e.encrypted && !currentInput?.[e.field]) {
+                tempEntity.value = '';
+            }
             tempEntity.display =
                 typeof e?.options?.display !== 'undefined' ? e.options.display : true;
             if (oauthType) {
diff --git a/ui/src/components/BaseFormView/tests/BaseFormViewUtils.test.ts b/ui/src/components/BaseFormView/tests/BaseFormViewUtils.test.ts
new file mode 100644
index 0000000000..667b248386
--- /dev/null
+++ b/ui/src/components/BaseFormView/tests/BaseFormViewUtils.test.ts
@@ -0,0 +1,150 @@
+import { describe, it, expect } from 'vitest';
+import { mapEntityIntoBaseForViewEntityObject } from '../BaseFormViewUtils';
+import { MODE_EDIT, MODE_CONFIG } from '../../../constants/modes';
+import { BaseFormProps } from '../../../types/components/BaseFormTypes';
+
+describe('BaseFormViewUtils - Password Placeholder Fix', () => {
+    const mockProps: BaseFormProps = {
+        mode: MODE_EDIT,
+        currentServiceState: {},
+        serviceName: 'account',
+        page: 'configuration',
+        stanzaName: 'test',
+        handleFormSubmit: () => {},
+    };
+
+    it('should preserve masked password values in edit mode', () => {
+        const entity = {
+            field: 'password',
+            label: 'Password',
+            type: 'text' as const,
+            encrypted: true,
+        };
+        
+        const currentInput = {
+            password: '******',
+        };
+
+        const result = mapEntityIntoBaseForViewEntityObject(
+            entity,
+            currentInput,
+            mockProps
+        );
+
+        expect(result.value).toBe('******');
+    });
+
+    it('should show empty string for encrypted fields with no value in edit mode', () => {
+        const entity = {
+            field: 'password',
+            label: 'Password',
+            type: 'text' as const,
+            encrypted: true,
+        };
+        
+        const currentInput = {};
+
+        const result = mapEntityIntoBaseForViewEntityObject(
+            entity,
+            currentInput,
+            mockProps
+        );
+
+        expect(result.value).toBe('');
+    });
+
+    it('should show empty string for encrypted fields with empty value in edit mode', () => {
+        const entity = {
+            field: 'password',
+            label: 'Password',
+            type: 'text' as const,
+            encrypted: true,
+        };
+        
+        const currentInput = {
+            password: '',
+        };
+
+        const result = mapEntityIntoBaseForViewEntityObject(
+            entity,
+            currentInput,
+            mockProps
+        );
+
+        expect(result.value).toBe('');
+    });
+
+    it('should preserve non-encrypted field values in edit mode', () => {
+        const entity = {
+            field: 'username',
+            label: 'Username',
+            type: 'text' as const,
+            encrypted: false,
+        };
+        
+        const currentInput = {
+            username: 'testuser',
+        };
+
+        const result = mapEntityIntoBaseForViewEntityObject(
+            entity,
+            currentInput,
+            mockProps
+        );
+
+        expect(result.value).toBe('testuser');
+    });
+
+    it('should work the same way in config mode', () => {
+        const configProps: BaseFormProps = { ...mockProps, mode: MODE_CONFIG };
+        
+        const entity = {
+            field: 'password',
+            label: 'Password',
+            type: 'text' as const,
+            encrypted: true,
+        };
+        
+        const currentInput = {
+            password: '******',
+        };
+
+        const result = mapEntityIntoBaseForViewEntityObject(
+            entity,
+            currentInput,
+            configProps
+        );
+
+        expect(result.value).toBe('******');
+    });
+
+    it('should not submit masked password values', () => {
+        const entity = {
+            field: 'password',
+            label: 'Password',
+            type: 'text' as const,
+            encrypted: true,
+        };
+        
+        const mockEntities = [entity];
+        const mockDataDict: Record<string, any> = { password: '******' };
+        
+        const mockComponent = {
+            entities: mockEntities,
+            datadict: mockDataDict,
+        };
+        
+        const body = new URLSearchParams();
+        Object.keys(mockComponent.datadict).forEach((key) => {
+            if (mockComponent.datadict[key] != null) {
+                const foundEntity = mockComponent.entities?.find((x: any) => x?.field === key);
+                if (foundEntity?.encrypted && mockComponent.datadict[key] === '******') {
+                    return;
+                }
+                body.append(key, String(mockComponent.datadict[key]));
+            }
+        });
+
+        expect(body.has('password')).toBe(false);
+    });
+});
diff --git a/ui/src/components/TextComponent/TextComponent.tsx b/ui/src/components/TextComponent/TextComponent.tsx
index 6797055efe..83a42dfc12 100755
--- a/ui/src/components/TextComponent/TextComponent.tsx
+++ b/ui/src/components/TextComponent/TextComponent.tsx
@@ -15,10 +15,26 @@ export interface TextComponentProps {
 }
 
 class TextComponent extends Component<TextComponentProps> {
+    private wasMasked: boolean = false;
+
     handleChange = (e: unknown, { value }: { value: string | number }) => {
         this.props.handleChange(this.props.field, value);
     };
 
+    handleFocus = (e: React.FocusEvent<HTMLInputElement | HTMLTextAreaElement>) => {
+        if (this.props.encrypted && e.target.value === '******') {
+            this.wasMasked = true;
+            this.props.handleChange(this.props.field, '');
+        }
+    };
+
+    handleBlur = (e: React.FocusEvent<HTMLInputElement | HTMLTextAreaElement>) => {
+        if (this.props.encrypted && e.target.value === '' && this.wasMasked) {
+            this.props.handleChange(this.props.field, '******');
+            this.wasMasked = false;
+        }
+    };
+
     render() {
         const { id, field, disabled, value, encrypted, ...restProps } = this.props;
         const restSuiProps = excludeControlWrapperProps(restProps);
@@ -30,6 +46,8 @@ class TextComponent extends Component<TextComponentProps> {
                 disabled={disabled && 'dimmed'}
                 value={value === null || typeof value === 'undefined' ? '' : value.toString()}
                 onChange={this.handleChange}
+                onFocus={this.handleFocus}
+                onBlur={this.handleBlur}
                 type={encrypted ? 'password' : 'text'}
             />
         );