This is my setup for folding Vim:
hi Folded term=bold ctermfg=White
How do I get rid of the underline?
For attributes that you do not specify, the command will :hi keep the previous one. Therefore, if your color scheme includes cterm=underline , you need to tweak this:
:hi
cterm=underline
hi Folded term=bold cterm=NONE ctermfg=White