Since this is hard earned money accumulated over 3 years, safety should be paramount then only think about returns.
1. Avoid stocks
2. Avoid small banks - not worth the risk for that extra 1%. Even though it is covered by 5L insurance, but then you dont want to run around for that. That is the last option. Would make sense if this 1L was loose money for you.
Better select any large bank and put in FD. HDFC is giving 7.25% for 18 months period onwards.
Alternatively, you could put in a liquid fund and will get 5-6% but can access fund any time without any penalty.