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This paper presents a mathematical model to investigate the effect of intermediate water tank for cascade configuration of thermoelectric modules in heating and cooling application. The system consists of two thermoelectric modules separated by an intermediate water tank. Another surface of each thermoelectric module is in contact with cold water tank or hot water tank. In the simulation, both hot and cold water tanks consist one kilogram of water. The mass of water in the intermediate water tank was set to 0.01 kg (negligible thermal mass), 1 kg (equal thermal mass) and 10 kg (large thermal mass). Set point for hot and cold water tanks was 373 K and 276 K, respectively. It was found that intermediate water tank with higher thermal mass enable a better temperature control and produceshigher Coefficient of Performance for both thermoelectric modules. These findings are essential for the development of a three-stage temperature water dispenser using thermoelectric modules.