By no means these are the correct GPO settings to have, but these are what I have configured on our environment for PCs (not servers), and so far seems to be working fine.
Windows Update policy location
Computer Configuration > Administrative Templates > Windows Components > Windows Update
Configure Automatic Updates:
I have selected Auto download and schedule the install, where we have set the install day to be every Wednesday at 11am. And install updates for other products too.
Specify internet Microsoft update service location:
This is where you specify your Windows Update Server.
Allow Automatic Updates immediate installation:
Allows updates that don’t interrupt the user or ask for restarts. If its enabled it will automatically install the updates once the PC has downloaded them.
No Auto-restart with logged on users for scheduled automatic updates installations:
Needed to stop the PC from just auto restarting wile a user is logged on.
Re-prompt for restart with scheduled installations:
As we have set the scheduled install for 11am on Wednesday, I have enabled re prompted for 60 minutes time, hopefully, around the time when our users may be going out for lunch.