Deciding between SharePoint custom list or External list

I have arround 5 lacs of Contacts records, i want to stored them in SharePoint list

So i was thinking of two options

1) Store all records in SQL Table (different database) and using BCS display all the records in External List (which will provide CRUD operations as well)

2) Second option is storing all the records in SharePoint custom list

Let me know your opinion which one will be better in above scenario, considering the performance and growth of the data (data growth: 1000 items per year)

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