Most types of water are equally good for your fish. Nonetheless, generally, water that is in its normal state isn't good for your fish. However, there are many ways to modify water so that it will be ready for your tank.
First of all, let's look at city water. Well, this kind has too much chlorine. In that case, it has to be filtered out. Chlorine is dangerous for fish, and maybe people too, lol, cause it is essentially a poison. How about distilled water?
Well, this type of water can be too pure for its own good, lol. In other words, it is just too free of minerals to be safe for fish. Nonetheless, though, in reef systems additives are used which bring things back to normal and with small systems the use of buffering levels things out. How about bought water?
This type of water is normally great for fish, but if it's spring water then it should be tested to see if the minerals etc. are balanced. Now, finally, let's look at reverse osmosis and de-ionized water. This type of water, like distilled water, is often too pure, so it will need to be remineralized in the case of small systems. However, the reef systems automatically become leveled out once salt mixes are applied.