Since you’re only using the credit card to build credit, I’d personally vote for sticking with a lower limit. $500 would be good. Honestly, you could do it with less. You can build good credit just by buying a pack of gum every month with your card and paying your bills on time. By getting a lower limit, you might also free up money to take care of other financial obligations (just some examples that come to mind — paying off debt, starting an emergency fund or saving for retirement).
A higher credit line would only be helpful if you’re definitely set on putting $250 in expenses (or more) on your card each month, since it would keep your credit utilization ratio down (the % of the available credit you’re using). It can also give you a little wiggle room in case of an unexpected expense. But otherwise, I don’t think it makes a lot of sense.
A secured card is really just a temporary solution. For that reason, I wouldn’t tie up a lot of money for the deposit. After several months of on-time payments and no derogatory marks, it’s generally easier to qualify for better cards with higher limits and no deposits. And when you get a better card, you can continue to work on your credit while also having a card that’s more functional.