Canadian Tire Bank has launched an account it says will save people money by consolidating their debts and helping to pay them off more quickly.

The retail and financial services company introduced its One-and-Only account on Tuesday in Calgary and in Kitchener-Waterloo and London in Ontario. The account allows customers to combine mortgage, chequing and savings accounts, and loans and credit-card balances.

"Any funds deposited into the account, like one's pay, immediately go towards paying down the mortgage and reducing the debt load, and as a result could also result in significant reductions in interest payments," Canadian Tire said in a news release.

Essentially, Canadian Tire Bank is buying all the debts the consumer wants to put into the account, up to 80 per cent of the value of the customer's home, and will charge a prime rate of interest on the combined debt, said Pam Dodaro, associate vice-president of Canadian Tire Financial Services.

While normal mortgage payments are made at regular intervals, the new account applies money to the debt as soon as it is deposited, thereby cutting interest charges. And users can write cheques on the account, so the money is available if needed, Dodaro said.

"You can get it back at any time."

The company is also paying legal and set-up fees, and even offering bonus Canadian Tire money for customers.

The bank, which has been spending heavily on marketing — more than $18 million or a fifth of its total income in the first quarter, ended June 30 — will promote the account in the test cities. It's also available in British Columbia, through the account website.

The spokeswoman would not say how Canadian Tire will determine if the test is a success, but the bank's research indicates that Canadians want something of the kind, she said.

A third of mortgages are held in similar accounts in Britain and Australia, and while it is not unique — the Manulife One account combines deposits and loans — Canadians are not aware of the benefits, she said.

Canadian Tire Bank launched high-interest savings accounts, guaranteed investment certificates and residential mortgages in the three test markets last fall. "Management regards new retail banking products as another high-potential channel for long-term growth," the company said this summer.

The bank is tiny by Canadian standards. According to filings with the federal government, the bank made profit of $7.2 million on income of $80.7 million for the three months ended June 30, compared with $1.2 million on income of $66.4 million in the year-earlier quarter.

Assets at June 30 were less than $860 million.