Abstract: A domestic electric water heater includes inner and outer water heating compartments in thermal communication with each other and arranged for free thermal circulation of water therebetween. First and second electric heating elements, individually controlled at different temperatures by separate thermostats responsive to the temperature of the water in the outer compartment, are provided in the inner compartment for directly heating the water therein. First and second groups of water preheating pipe windings, connected in series, are located at the lower and upper portions, respectively, of the outer compartment in heat exchange with the water therein.