The Blues failed with a bid to sign Fernandez after attempting to negotiate the player’s £105million release clause.
During the talks, the 21-year-old absconded to Argentina for New Year’s Eve and was fined by Benfica for missing training amid rumours that he wanted to move to Chelsea.
Schmidt recently admitted that he is having to “start from zero” with World Cup winner Fernandez but insisted on Monday that the case for any January departure is now finished.
“As I said last week, the question is closed,” he told reporters.
“He's a player of ours, he's happy. He's part of the team and he's a key player.”
When pressed on the matter, Schmidt stated: “The situation is closed, I said that right at the beginning.”
After returning to training, Fernandez is expected to make his first Benfica appearance of the calendar year against lower-league Varzim in the Taca de Portugal on Tuesday.