If it's just one layer, the knot is just going to be for esthetics so there's no right or wrong answer! Maybe tie one side (or part of one side) and compare it to an untied side and see what you like best? Depending on how long your fringe is, a knot might make it kind of stick out; more "bristly" than "fringey"...which might look good or not!
I don't have kids but I don't think there would be any safety issues with knots...