Regardless of the permalink structure, prefer collection and per-file permalinks that end with a trailing slash, rather than .html. Pretty permalinks are intended to be read by humans, not machines, and contain no extraneous information (format information otherwise conveyed by the response header).
Good:
permalink: pretty
permalink: /:year/:month/:day/:title/
Bad:
permalink: date
permalink: /:categories/:year/:y_day/:title.html
Don’t hide markdown files in subfolders to achieve pretty permalinks. Doing so is unnecessary, adds additional steps to most editing workflows, and makes distinguishing between numerous index.md files more difficult, when open in a text editor. Generated permalinks should have a logical relationship to the source filename.
Good:
In about.md (accessible as /about/):
---
title: About
permalink: /about/
---
Bad:
In about/index.md (accessible as /about/):
---
title: About
---