In household and commercial usage, most North American and Southern Asian water heaters are the tank type, also called storage water heaters, these consist of a cylindrical vessel or container that keeps water continuously hot and ready to use. Typical sizes for household use range from 75 to 400 liters (20 to 100 US gallons). These may use electricity, natural gas, propane, heating oil, solar, or other energy sources. Natural gas heaters are most popular in the US and most European countries, since the gas is often conveniently piped throughout cities and towns and currently is the cheapest to use. In the United States, typical natural gas water heaters for households without unusual needs are 40 or 50 US gallons with a burner rated at 34,000 to 40,000 BTU/hour. Some models offer “High Efficiency and Ultra Low NOx” emissions.

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This is a popular arrangement where higher flow rates are required for limited periods, water is heated in a pressure vessel that can withstand a hydrostatic pressure close to that of the incoming mains supply. In North America, these vessels are called hot water tanks, and may incorporate an electrical resistance heater, a heat pump, or a gas or oil burner that heats water directly.

Where hot-water space heating boilers are installed, domestic hot water cylinders are usually heated indirectly by primary water from the boiler, or by an electric immersion heater (often as backup to the boiler). In the UK these vessels are called indirect cylinders, or direct cylinders, respectively. Additionally, if these cylinders form part of a sealed system, providing mains-pressure hot water, they are known as unvented cylinders. In the US, when connected to a boiler they are called an indirect-fired water heater.

Compared to tankless water heaters, a storage water heater has the advantage of using energy (gas or electricity) at a relatively slow rate, storing the heat for later use. The disadvantage is that over time, heat escapes through the tank wall and the water cools down, activating the heating system to heat the water back up, so investing in a tank with better insulation improves this standby efficiency. Additionally, when heavy use exhausts the hot water, there is a significant delay before hot water is available again. Larger tanks tend to provide hot water with less temperature fluctuation at moderate flow rates.

Volume storage water heaters in the United States and New Zealand are typically vertical, cylindrical tanks, usually standing on the floor or on a platform raised a short distance above the floor. Volume storage water heaters in Spain are typically horizontal. In India, they are mainly vertical. In apartments they can be mounted in the ceiling space over laundry-utility rooms. In Australia, gas and electric outdoor tank heaters have mainly been used (with high temperatures to increase effective capacity), but solar roof tanks are becoming fashionable.

Tiny point-of-use (POU) electric storage water heaters with capacities ranging from 8 to 32 liters (2 to 6 gallons) are made for installation in kitchen and bath cabinets or on the wall above a sink. They typically use low power heating elements, about 1 kW to 1.5 kW, and can provide hot water long enough for hand washing, or, if plumbed into an existing hot water line, until hot water arrives from a remote high capacity water heater. They may be used when retrofitting a building with hot water plumbing is too costly or impractical. Since they maintain water temperature thermostatically, they can only supply a continuous flow of hot water at extremely low flow rates, unlike high-capacity tankless heaters.

In tropical countries, like Singapore and India, a storage water heater may vary from 10 L to 35 L. Smaller water heaters are sufficient, as ambient weather temperatures and incoming water temperature are moderate.