Pour the oil into a deep fryer or heavy pot and heat it to about 365 degrees Fahrenheit. Getting the temperature right before you start battering means the rings fry evenly instead of turning greasy. A thermometer clipped to the side of the pot takes all the guesswork out of this step.
While the oil heats, slice your onion into rounds about a quarter inch thick. Gently push out the individual rings and set them aside on a plate. The bigger outer rings usually hold together best, so save the tiny inner pieces for another use.
In a small bowl, stir together the flour, baking powder, and salt until fully combined. This dry mixture is what the onion rings get dipped into first, so it needs to coat every ring completely. Toss the rings through it until each one looks lightly dusted.
Whisk the egg and milk directly into that same flour mixture using a fork until it turns into a smooth, pourable batter. This step only takes a minute or two once everything is measured out. The batter should be thick enough to cling to the rings but not so thick that it clumps.
Dip each floured ring into the batter, letting the excess drip back into the bowl. Place them on a wire rack set over foil so any extra batter drains away cleanly. Letting them rest here for a minute keeps the coating from sliding off in the oil.
Spread the dry bread crumbs across a shallow dish or plate. Press each battered ring into the crumbs, scooping more over the top so it's fully covered on both sides. This final layer is what gives the rings their signature crunch once fried.
Carefully lower the coated rings into the hot oil in small batches so the temperature doesn't drop. Fry for about two to three minutes, flipping once, until they turn a deep golden brown. Lift them out with tongs and let them drain on paper towels before serving.