When I type in a password in iOS 11.4.1, the last entered character is shown only for a split second.
For security reasons, I do not want the characters to get echoed. How do I disable this split second preview and show only the dots instead?
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Short answer, it is not possible to do so.
This functionality is built into iOS and it is by design. Showing a character for split second lets the user visually verify that correct character is entered.
If you are concerned about someone watching over your shoulder, consider using a password manager. Apple's iCloud keychain can store and enter passwords for you. If you upgrade to iOS 12, built-in support for 3rd party password managers in included in iOS. You get an option to enter password via it in the keyboard toolbar area. When entering password using password manager, no character is echoed and only dots are shown.
While it is also possible to use password manager in iOS 11.4.1, you'll have to resort to manually copying and pasting the password where the characters aren't echoed.