Thermal errors remain one of the biggest challenges for the precision of cutting machine tools. Aside from optimizations in the machine tool design and behaviour, optimal cutting process parameters and targeted usage of cutting fluid or alternative methods of tool cooling are required for improved process efficiency with minimal energy demand and maximal tool life. A simulation-based study is presented which compares both different methods of tool cooling, specifically air cooling, flooded cooling and minimum quantity lubrication and also different simulation methods and models. Using a case study, which models an existing thermal test stand comprised of motor spindle, tool holder, tool and coolant nozzle, different cooling scenarios were tested and compared. The simulations were performed in ANSYS CFX. Comparisons were made between simulations with and without buoyancy, with and without tool rotation, transient and steady-state, with laminar flow and with different turbulence models and between the different cooling scenarios. Some insight on different time step sizes and the resulting increase in simulation time and precision was also gained. These results will make future studies on the thermal behaviour of both tool and cutting process easier by showing suitable simulation techniques and viable model simplifications.