Kitty has a good time on the day (4)
I believe the answer is:
fund
'kitty' is the definition.
(fund or money for a particular purpose)
'a good time on the day' is the wordplay.
'a good time' becomes 'fun' (I've seen this in another clue).
'on' is a charade indicator (letters next to each other) (in a down clue, letters appear on others).
'the day' becomes 'd' (abbreviation for day).
'fun'+'d'='FUND'
'has' acts as a link.
(Other definitions for fund that I've seen before include "Large stock; pay for" , "Pay for; kitty" , "Stock, resources" , "Pool - float" , "Sum of money set aside for a purpose" .)