Short answer
Edit the user preference "terminal.integrated.cwd": "" to the path that you want the integrated terminal to open to.
Long answer
The same answer, but the long step-by-step version,
In Visual Studio Code go to:
Menu File → Preferences → Settings
Now that you are in the “User Settings“, using the “Search Settings” bar across the top of the window paste or type this:
terminal.integrated.cwd
It will list the following as a result:
// An explicit start path where the terminal will be launched, this is used
as the current working directory (cwd) for the shell process. This may be
particularly useful in workspace settings if the root directory is not a
convenient cwd.
"terminal.integrated.cwd": "",
You will notice that it will not let you type here to change this setting. That is because you can’t change the default setting. You instead need to change your personal settings. Here’s how…
Click the pencil icon to the left of the this option and then the “Copy to Settings” option that pops-up.
You should have a split screen in which the right side of the screen has the heading Place your settings here to overwrite the Default Settings. This is the correct place for you to make changes. You might already have a few personalized settings listed here.
When you clicked “Copy to Settings” it automatically added this line for you:
“terminal.integrated.cwd”: “”
Notice that whichever item is last in this list will not have a trailing comma but any items before it in the list will require one.
FYI: you could have simply typed or copy/pasted this into the personalized settings yourself, but following these steps is the process to learn for changing other preferences as needed.
Now you are able to type to set the path you want to use. Make sure to use \\ in place of \ and you do not need the trailing \. For example including this line would always start your terminal in the baz directory:
{
"terminal.integrated.cwd": "C:\\Users\\foo\\bar\\baz"
}
To apply the change, simply Save and restart Visual Studio Code.