| I would strongly suggest being as honest as you can on a job application if that is what this is for. Depending on how good a company is that is doing the searching on your background, they might be able to find anything about your past, especially if it involved the law. However, I have never seen it on a job application where it asks about arrests, only convictions. But, that doesn't mean that there is no possibility of the question of arrests coming up on a job application. It might be necessary to ask that, depending on the type of job you are going for. You will want to look as good as possible to a potential employer in all ways. One of those is honesty. If an application does ask the question about you having been arrested for something, then I would answer "Yes." Since you are asking about this concerning a fidelity bond, then how honest you are is of the utmost importance.
I'm not quite sure what you mean by "erased."
Answering a question like "Have you ever been arrested?" And then, saying "Yes" may seem like an embarrassment to you. However, please think about how embarrassing it will be to you if a potential employer finds out that you lied on the application.
Just the fact that this occurred 20 years ago and the fact that the charge was dropped, would seem to be in your favor. However, if you answer "Yes" to the question of being arrested and are asked why the charge was dropped, then I hope that the reason that it was dropped would be for the fact that you didn't commit a crime and that it wasn't dropped because of some technical error by the police or legal system when the charge was made. | 
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