When Merrill Lynch Pierce, Fenner & Smith Inc. introduced its Cash Management Account (CMA) in 1977, it undoubtedly expected a lot of competition. That is why it patented the concept of a one-stop package that included checking, money fund, credit, and brokerage features.

Patents notwithstanding, Merrill got what it bargained for. In the years since 1977, virtually all the major brokerage firms (and some not-so-major ones) have introduced their own versions of Merrill's pioneering product. Banks have gotten into the act, too: Numerous commercial banks and thrifts around the country are either offering or planning home-grown variants of the CMA.

Central asset accounts, as they are known generically, let you keep all, or most, of your money in one place. They also let you transact most of your business through a single conduit. Write checks. Trade securities. Borrow through a credit card, a margin loan, or even an unsecured line of credit. Earn market interest rates on your cash. Since most transactions can be conducted electronically or by mail, the theory runs, you can do business with one financial institution no matter where you live. To top it off, you get all your affairs reported on a single monthly statement.

Thanks to the intense competition, some sponsors have begun to offer even fancier gimmicks. Prudential-Bache Securities Inc.'s Command Account, for example, offers a shop-at-home service for such major purchases as televisions, stereos, and even cars. It also lets you pay your bills by telephone.

Fidelity Investments's Ultra Service Account offers the pay-by-phone feature, too, but with an added fillip: You can arrange to have regular bills paid automatically, and you can give your instructions to a computerized voice recorder that talks back. Enjoy paying your bills at 3 a.m.? No problem.

With attractions like these, the old-fashioned bank account runs the risk of obsolescence.

Unlike stand-alone money funds, for example -- which usually offer check-writing only for amounts of $500 or more -- most asset management accounts allow you to write as many checks as you want for any amount you want. This means that you can use your Merrill Lynch CMA check or your E. F. Hutton & Co. Asset Management Account check to pay for a $2 parking ticket as well as a $54,000 Mercedes-Benz. And unlike bank checking accounts, which charge ever-increasing per-check fees, the asset account's single annual fee covers everything.

In considering these accounts, though, it helps to know what the sponsoring institution is expecting to get out of it. Banks and brokerage houses differ in this respect.

Brokers, for the most part, want to encourage securities trading. Even if you are an active trader, you may not want to keep all your spare cash in an account that is literally under your account executive's nose. The original CMA, suggests Shep Harmon, a financial planner who is president of his own financial services firm in a Boston suburb, was developed by Merrill primarily as a marketing tool. With it, brokers can see both your stock portfolio and your float in one comprehensive statement. "If you get $10,000 back from your income taxes and put it into this account," Harmon says, "this is a red flag to your broker. He now knows you have additional funds he can earn a commissionon."

In keeping with this emphasis on securities, much borrowing in a broker-based asset account is accomplished through the account's margin feature. That allows you to borrow -- via card or check -- up to 50% of the market value of your marginable securities. As with any margin loan, of course, you will have to meet margin calls if your stock declines in value. Interest on the loan ranges from .75 to 2.25 percentage points above the broker's call rate, which recently was about 11%.

Banks, by contrast, are more interested in encouraging you to borrow money over longer terms -- and are as happy to finance a new bathroom as a new round lot of IBM Corp. With a bank central asset account, you are likely to be offered both secured and unsecured lines of credit. Some plans, such as The Money Management Account, offered by City Federal Savings & Loan in New Jersey and Florida, let you borrow against the equity you have in your house.

Whichever way you go, check out the account's statement. Some bank plans provide a package of apparently convenient services, but at the end of the month you get a separate statement for each type of transaction.

Other plans, like Fidelity's, not only send you a complete record of all your monthly transactions in an understandable format, they also provide up to 99 different codes for categorizing your checking transactions. When April 15 rolls around, an organized summary of the year's financial activities can help relieve the pain of paying taxes.

There is, of course, no free lunch. Fees for these accounts vary, ranging from $3 a month to $100 a year. And all require hefty minimum deposits: typically $10,000, but often $20,000 or more. Still, the accounts may earn their keep. If they do nothing more than save a few hours at tax time, they are probably worth the expense.

As for Merrill Lynch, it has recently begun to branch out beyond the basic CMA, and is test-marketing a scaled-down version (fewer options, but a lower minimum balance) aimed mainly at younger investors. But it isn't doing badly with the CMA itself, competition or not. At last report it had 1 million accounts, with an average balance of roughly $75,000.