It all really depends on what you want to achieve, what your financial outlook is and what you are comfortable with.
Generally it is considered prudent to have a multiple of your monthly paycheck in accessible savings, some would suggest three months, others more or less.
The points you probably need to consider Plumbob are (in no particular order!):
1) Return
2) Accessibility
3) Security
4) Objectives for using the money (long, medium and short term big ticket expenditure)
If you can get a savings rate that is higher than your mortgage interest then you may get a better return from saving the money rather than spending it on reducing your mortgage.
Locking a lumpsum into a fixed return scheme (such as the national solidarity bond for example) may mean a better return if you stay the distance but penalties if you try to exit early. It may also be that the rate which is attractive this year is less so next year.
If you pay down your mortgage that money then becomes inaccessible to you as you will have to re-borrow to retrieve it, however, if you pay down your mortgage then you can either reduce your term or your monthly outgoing and reduce the overall cost of your mortgage.
Generally (though this is not a hard and fast rule), the riskier the investment the higher the potential return (and the greater the potential loss). So the level of risk that you are willing to take may limit your options.
You also have to think about what you want to do with your money. As in the objectives you may have over the next five or ten years that your savings may be used for (children, cars, furnishings, holidays, education, etc).
Start by thinking about what your objectives and risk strategy are, what proportion of your lump-sum do you need to be readily accessible and what proportion you believe you won't need in the medium term. These will allow you to start looking at specific types of products tailored for what you wish to achieve. Then start looking at the different options available,
www.itsyourmoney.ie has comparison charts for different savings options that might help.