Question: Is this a safe thing to do or should we spread the money around ?
Will have about €260 on deposit for a couple of months(say Feb) till new house is finished.
The chances of a bank going bust, while not zero, are extremely small. Personally I think you'd be better off just getting the best rate for your money and not leaving it too long on deposit (due to the eroding effects of inflation etc.) rather than worrying about banks going bust.
What is the current inflation rate in Ireland.
I would have assumed that inflation shouldn't have too much of an affect on your deposit here........
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