You should be able to stand flat footed over the top tube. Meaning the highest "bar" should be comfortably under your body if you have to jump down at anytime during the ride.

I remember when I was a child (decades ago) there was an idea that we should be able to remain seated at a stop sign (or light) yet keep the bike upright while on our tippy-toes. I don't know where that came from.... but that "guide" isn't used now-a-days.

If the saddle (seat) is too low.... your knees will be too bent at their apex. This will cause undue stress on your knees and possibly an injury. Alternately... setting a saddle too high may cause a leg extension issue/injury. Whereas neither condition will likely cause any life threating problems.... why not get the adjustments correct and ride comfortably.

There are tons of Bicycle fit videos on YouTube.

What many of us didn't know as children or even as parents and adults is that bicycles come in sizes. Not just the wheel sizes we often see in big mega stores. But bicycles (with the same wheels) are made with different frame sizes. Selecting a bicycle with the correct sized frame makes adjusting the saddle, handlebar height, and such much easier.

A decent bicycle, with a decent fit can be the difference between a very pleasant cycling experience and one that seems like work.