The Reagan administration will stop issuing 20-year Treasury bonds and is considering lowering the minimum guaranteed rate on U.S. savings bonds, two cost-cutting moves expected to save the government billions of dollars in interest costs over the years.

Charles Sethness, Treasury assistant secretary for domestic finance, said the government is considering lowering the minimum guaranteed rate on savings bonds from 7.5 percent. Declining market interest rates have made the bonds, traditionally the reserve of small savers, a boon for other investors as well.

Savings bond rates paid by Treasury are based on an average of market rates, but investors are guaranteed a rate of at least 7.5 percent if they hold the bonds for five years, department officials said. That now makes savings bonds a better investment than many other comparable securities.

For example, a U.S. Treasury note requiring a minimum investment of $1,000 now yields about 7.15 percent, according to William V. Sullivan, a senior vice president for Dean Witter Reynolds Inc. The possible lowering of the minimum rate is "just a reflection of market conditions," Sullivan said.

Sales of savings bonds jumped to $1.7 billion in the first quarter this year from $779 million sold in the third quarter of 1982, Treasury said.

Sethness wouldn't say to what rate the guaranteed minimum might be lowered.

Sethness also said that the Treasury would eliminate the auction of 20-year bonds and instead would increase the amount of borrowing through 30-year bonds because they are more attractive to investors. The 30-year bond offers a lower return even though its term is longer.

Bond market analysts said the 20-year bonds, which the Treasury began auctioning twice a year in 1980 and then quarterly in 1981, were too long-term to suit short- and medium-term investors, and too short-term for long-term investors such as insurance companies and pension trusts funds.

"There aren't that many other 20-year securities," Sullivan said. The longer-term bonds "blend in nicely with other bond portfolios."

Leonard Santow of Griggs and Santow financial consultants said that the 20-year notes were unsuitable for many of the innovations in bond sales such as stripping -- selling the bonds and coupons separately.

"The 20-year Treasury bond has never received a good reception by investors," Santow said. "It's been the most expensive issue for the Treasury."

Because the issue was less attractive, the Treasury had to offer a higher return to investors, which gave it a higher yield than the 30-year bond and increased the cost to the government. Ordinarily, the longer-term security pays the higher rate because its distant maturity date makes it riskier.

"We have concluded that it would be most cost-effective for the Treasury to issue larger amounts of 10- and 30-year securities rather than 20-year issues," Sethness said.

Santow said that dealers had recommended the Treasury eliminate the 20-year bond and that "the Treasury is going to get high marks" for getting rid of it. But he said it could be costly for the Treasury if it decides it wants to bring back the 20-year bond.

In another area, Sethness said Treasury will approach Congress before it recesses on Aug. 15 to request an extension of the government's ceiling on the amount of its debt. The borrowing limit is now $2.079 trillion.