Blunder going into the bank with a dog (7)
I believe the answer is:
terrier
'dog' is the definition.
(terrier is a kind of dog)
'blunder going into the bank' is the wordplay.
'blunder' becomes 'err' (to err is to make a mistake or blunder).
'going into' means one lot of letters goes inside another.
'the bank' becomes 'tier' (both can mean a row of similar things).
'err' put within 'tier' is 'TERRIER'.
'with a' acts as a link.
(Other definitions for terrier that I've seen before include "Dog - reservist" , "he's not a boxer" , "Dog originally used to ferret out burrowing animals" , "Bedlington - -" , "Short-bodied canine" .)