How do I echo stars (*) when reading password with `read`?

As Mark Rushakoff pointed out, read -s will suppress the echoing of characters typed at the prompt. You can make use of that feature as part of this script to echo asterisks for each character typed:

#!/bin/bash
unset password
prompt="Enter Password:"
while IFS= read -p "$prompt" -r -s -n 1 char
do
    if [[ $char == $'\0' ]]
    then
        break
    fi
    prompt='*'
    password+="$char"
done
echo
echo "Done. Password=$password"

read -s should put it in silent mode:

-s     Silent mode.  If input is coming from a terminal, characters are not echoed.

See the read section in man bash.

I don't know about stars, but stty -echo is your friend:

 #!/bin/sh 
 read -p "Username: " uname 
 stty -echo 
 read -p "Password: " passw; echo 
 stty echo

Source: http://www.peterbe.com/plog/passwords-with-bash

stty -echo
read something
stty echo

will stop user input being echoed to the screen for that read. Depending on what you are doing with prompts, you may want to add an extra echo command to generate a newline after the read.

@nxnev's answer didn't quite work for me, at least on macOS. I simplified it a bit, and now it's flawless:

#!/bin/bash

ask() {
    charcount='0'
    prompt="${1}: "
    reply=''
    while IFS='' read -n '1' -p "${prompt}" -r -s 'char'
    do
        case "${char}" in
            # Handles NULL
            ( $'\000' )
            break
            ;;
            # Handles BACKSPACE and DELETE
            ( $'\010' | $'\177' )
            if (( charcount > 0 )); then
                prompt=$'\b \b'
                reply="${reply%?}"
                (( charcount-- ))
            else
                prompt=''
            fi
            ;;
            ( * )
            prompt='*'
            reply+="${char}"
            (( charcount++ ))
            ;;
        esac
    done
    printf '\n' >&2
    printf '%s\n' "${reply}"
}

pwd="$(ask Password)"

echo "Your password is $pwd"