I don't know whether I am late in responding. I saw this thread just now.
Even if it takes one or two days to finally decide also there is not going to be much problem. It is better than taking a hasty decision and then land in some problem.
I would first suggest, to instruct the bank tomorrow morning itself, to split the total maturity proceeds tomorrow into three deposits . Why I say so is :
(a) You will get the interest without break on your fund if renewed on maturity without delay.
(b) Make three deposits for the minimum period for which interest is maximum now.
(c) Some banks take penal interest on premature closure of deposits of 5 lacs and above. In your case, if after some time (before maturity) you need the money or you want to invest in some other way, you will not lose any amount as penal charges. This you enquire and ensure from bank.
You may need to visit the bank ad fill up new deposit opening forms and KYC documents.
The other alternative I suggest is:
You now decide how much amount is essential for her monthly expenses. By working in reverse method, find the amount of deposit which can fetch that much as interest. If it is more than 5 lacs, make two deposits for reason(c) stated above.
As she is 58+, in less than two years she will be a senior citizen and can utilise the Senior citizen S Savings Scheme, which fetches higher interest.
At this age the risk taking should be less. Even Mutual Funds have higher risk than bank deposits. There is a risk of capital erosion in MF. But let us be optimistic prudently. So invest in MF that amount which is residual after keeping the optimum essential amount in FD. One or two percent difference in interest may not matter because the main consideration should be minimum risk and easy liquidity.
Not just interest, but at this age, there will be many other practical issues in day to day matters, and a bank can be of much use and help in these than a Mutual Fund organisation. Hence I suggest once more that you keep an amount in Bank FD which can fetch the essential minimum monthly need as interest. Take risk on the residual amount only doing more homework, and investing in one or two different MF which has a history of reputation and investor satisfaction by return on investment.