The best holdfasts out there are the expensive, special order, forged ones Roy Underhill uses or the "
slightly" more reasonably-priced formed wire ones by Gramercy, sold by Tools for Working Wood.
The TFWW website says the Gramercy holdfast is designed for a 3/4" hole in a workbench top that is
1-3/4" or thicker for a 6 1/2" reach. The maximum clamping is 7-1/4" in a 2" thick bench top. You really don't want a snug hole- that makes it hard to get the holdfast out- mine are an easy, loose fit in the 3/4" dog holes like the one in first pic below from the TFWW website.
I have a set. They are great and will last a lifetime! They hold very well but are easy to remove from my 2" (2-1/2"?) thick maple top. They will never bend or break like the cheaper, cast ones may (read what TFWW says about holdfasts). When not in use I stow them in apron holes:
I just used an electric hand drill and a shopmade drill guide to keep it vertical to make my dog holes. Before you start drilling spend some time working on the dog hole layout- so you avoid putting them over base supports, vise mechanism, etc. It is hard to tell from the pic above, but I also used a router and chamfer bit with bearing to put a slight chamfer on the top rim of the dog holes to keep them looking nice. It had no effect on holdfast grip.