How high or low the larynx should be in your neck when you sing is steeped in controversy and misunderstanding. Unfortunately, it's also important. Get it too wrong and you have big vocal problems.
Voice teachers don't always agree on what is best. If I understand it correctly, the Speech Level Singing method of Seth Riggs (SLS) teaches that you should always have your larynx at the same level that you speak (#3). However, vocal coach Lisa Popiel suggests that there are times you would be correct to slightly raise or lower the larynx. She names 5 laryngeal positions... that some rock singing and saucy musical theater uses the more raised position (#2), while classical, cabaret jazz and some R&B singing uses a slightly lowered position (#4). She admonishes that no one should ever use positions #1 (very raised) or #5 (very lowered).
Here's what I think and have experience: As long as you only raise or lower the larynx so that you don't feel your throat or experience strain or fatigue, this is fine. In fact, as a session singer (stunt singer, I call it), I have to do this to blend with all kinds of voices and styles in recording. It's a way to get more tone colors and emotions. Musical theater needs these choices, too.
In fact, it's not just slight raising and lowering that must be allowed. To accomplish higher notes, the larynx needs to be free to tilt in your neck! Tension in and around the larynx can interfere with these movements.
However, and it's a great big however, you must not lower or raise your larynx to the point that you become aware of it. That will get you vocal problems. Most popular genre singing really should be in the middle position, with the larynx comfortably floating and tilting in the throat.
What can you do if you are raising or lowering your voice box (larynx) too much?
Learning to PULL instead of PUSH your voice, as taught in Power, Path & Performance method, is the best way I've found to protect your delicate and precious vocal instrument, and will help you immensely. This pulling instead of pushing sound, among other things, allows the larynx to determine it's best position with no outside interference. Also...
I'm going to tell you about a cool exercise I adapted for my students from yet another great voice teacher, Jeannie Deva:
Lightly place the tips of two fingers on top of your adam's apple. For females, this bump is not so pronounced... feel for it in the middle of the front of your neck. This is where the vocal cords are attached at one end, inside the thyroid cartilage. Now, just let your fingers be "brain flashlights" and simply don't allow any strain there as you sing. It's an amazing trick when your larynx tries to lift for high notes. Keeping the larynx from lifting makes those high notes just float out!
For low notes, try this to keep your larynx from lowering too much: Stand tall and put your hand on your sternum and try to pull your voice from there. Don't bend over or down to get the notes. Be aware of the vibration and definitely keep your chest open.
These are great voice teachers I've named in this post. It can get confusing, I know, when experts differ. All I can be sure of is what I've experienced that WORKS, and this should be your criteria, too. From my experience, I say mostly just keep your larynx happily floating, actually rocking a bit, in the center of your neck. If you sing correctly, even with a SLIGHTLY lower or higher laryngeal position, you should not be aware of your throat at all.