Password authentication is not centralized and requires direct user administration in an RDS instance. However, IAM database authentication can be enabled so that users do not need to rely on passwords for authentication. For more information, see the AWS documentation.
References:
https://docs.aws.amazon.com/AmazonRDS/latest/UserGuide/CHAP_CommonTasks.Connect.html#CHAP_CommonTasks.Connect.DatabaseAuthentication
In AWS Console -
In Terraform -