Three different arrangements of heat exchange from a hot fluid stream to a cold fluid stream such as, direct heat exchanger and fluid coupled indirect heat exchanger both with forced circulation loop as well as thermally driven natural circulation loop have been considered in the present work. Dynamic performance of these three arrangements has been studied for four different excitations namely, step, ramp, exponential and sinusoidal. These excitations are imposed at the hot fluid inlet temperature. Finite element technique is used to solve the transient one-dimensional conservation equations. A thorough comparison of the dynamic performance of these three arrangements is made. It is found that the direct heat exchanger does not have any time delay between the response and the excitation function. Moreover, the phase difference between the sinusoidal excitation and response is the lowest in this case. (c) 2005 Elsevier Ltd. All rights reserved.