diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1b596ff61..becfabc7c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -41,6 +41,9 @@ At the moment this project **does not** adhere to
 - Additional `hash` field in `/sign_tx` JSON body indicates which hashing algorithm to use for signing ([#553](https://github.com/entropyxyz/entropy-core/pull/553))
 - Additive aux data ([#577](https://github.com/entropyxyz/entropy-core/pull/577))
 
+### Fixed
+- Fix inconsistency between interactive and file based passwords ([#589](https://github.com/entropyxyz/entropy-core/pull/589))
+
 ### Removed
 - Remove pallet-helpers ([#581](https://github.com/entropyxyz/entropy-core/pull/581/))
 
diff --git a/Cargo.lock b/Cargo.lock
index 2a63feef4..edd3d7042 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -2534,7 +2534,7 @@ dependencies = [
  "entropy-protocol",
  "hex",
  "rand 0.8.5",
- "rpassword 5.0.1",
+ "rpassword",
  "scrypt",
  "serde",
  "serial_test 0.6.0",
@@ -8318,23 +8318,13 @@ dependencies = [
 
 [[package]]
 name = "rpassword"
-version = "5.0.1"
+version = "7.3.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "ffc936cf8a7ea60c58f030fd36a612a48f440610214dc54bc36431f9ea0c3efb"
-dependencies = [
- "libc",
- "winapi",
-]
-
-[[package]]
-name = "rpassword"
-version = "7.2.0"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "6678cf63ab3491898c0d021b493c94c9b221d91295294a2a5746eacbe5928322"
+checksum = "80472be3c897911d0137b2d2b9055faf6eeac5b14e324073d83bc17b191d7e3f"
 dependencies = [
  "libc",
  "rtoolbox",
- "winapi",
+ "windows-sys 0.48.0",
 ]
 
 [[package]]
@@ -8734,7 +8724,7 @@ dependencies = [
  "parity-scale-codec",
  "rand 0.8.5",
  "regex",
- "rpassword 7.2.0",
+ "rpassword",
  "sc-client-api",
  "sc-client-db",
  "sc-keystore",
diff --git a/crates/kvdb/Cargo.toml b/crates/kvdb/Cargo.toml
index 4ac0f1bcc..74b88896b 100644
--- a/crates/kvdb/Cargo.toml
+++ b/crates/kvdb/Cargo.toml
@@ -19,7 +19,7 @@ sp-core={ version="21.0.0", default-features=false }
 
 # Crypto
 zeroize         ={ version="1.4", features=["zeroize_derive"], default-features=false }
-rpassword       ={ version="5.0", default-features=false }
+rpassword       ={ version="7.3.1", default-features=false }
 scrypt          ={ version="0.11.0", default-features=false, features=["std"] }
 chacha20poly1305={ version="0.9", features=["alloc"], default-features=false }
 synedrion       ="0.1"
diff --git a/crates/threshold-signature-server/src/helpers/launch.rs b/crates/threshold-signature-server/src/helpers/launch.rs
index fddf637f3..28c5e81fe 100644
--- a/crates/threshold-signature-server/src/helpers/launch.rs
+++ b/crates/threshold-signature-server/src/helpers/launch.rs
@@ -96,8 +96,10 @@ pub async fn load_kv_store(
     };
 
     let password = if let Some(password_path) = password_path {
-        String::from_utf8(fs::read(password_path).expect("error reading password file"))
+        std::str::from_utf8(&fs::read(password_path).expect("error reading password file"))
             .expect("failed to convert password to string")
+            .trim()
+            .to_string()
             .into()
     } else {
         PasswordMethod::Prompt.execute().unwrap()