There are three things which effect compatibility and performance when connecting external storage:
The physical connector and cable. The 2020 iMac has four USB Type A (USB-A) and two USB Type C (USB-C) connectors.
The data transfer protocol – USB 1, USB 2, USB 3 (and later variants 3.1 and 3.2) and Thunderbolt. There is also USB 4, but this is not relevant to 2020 iMac. The 202O iMac supports:
- USB-A ports: USB 3.0 (maximum speed 5 Gbits/s) and slower USB 2 and
- USB-C ports: Thunderbolt 3 (maximum speed 40 Gbits/s), USB 3.1
gen2 (10 Gbits/s), and slower USB 3.1 speeds.
- The drive inside the external device/enclosure. Common types are are SATA (maximum speed 6 Gbits/s) or NVMe (faster). HDD are usually SATA, whilst SSDs might be SATA or NVMe.
The USB 3.1 gen1 and 3.2 gen1 standards are similar to USB 3.0 and storage devices specifying these are generally compatible with USB 3.0 via the USB-A ports.
Further, the USB 3.2 gen2 is very close to USB 3.1 gen2. So storage devices specifying USB 3.2 gen2 should be compatible with the USB 3.1 gen2 protocol delivered by the USB-C ports.
As well as the the iMac ports supporting or being compatible with multiple data protocols, most USB storage devices support multiple data protocols and (in many cases) both USB-A and USB-C cables and computer ports.
For an overview of USB standards read Wikipedia.
But Thunderbolt 3 storage devices can only be connected to the USB-C ports and must use Thunderbolt 3 cables. Older Thunderbolt 1 and 2 devices can only be connected using cables which convert to Thunderbolt 3 – the iMac does not directly support Thunderbolt 1 and 2.
Note that physical USB-C ports which support Thunderbolt 3 have a thunderbolt like symbol next to them. For more detail read Wikipedia.
To further confuse matters (but out of scope for this question) USB-C ports also support connecting monitors using, for examples, Display Port and HDMI standards.
What should you be looking for:
For maximum speed (and cost) you should be looking for a Thunderbolt 3 SSD storage device. These can have performance similar to the internal SSD (~2000 MByte/s). Example: Samsung X5.
For a more modest cost, there are SSDs which use USB 3.1 Gen 2 (or 3.2 Gen 2) and via the USB-C ports on the iMac will deliver ~1000 Mbyte/s. Example: Sumsung T7.
And for a slightly more modest cost there are SSDs which use USB 3.1 Gen 2 (or 3.2 Gen 2), but internally use SATA SSDs and deliver only ~500 Mbyte/s. Example: Samsung T5. These devices can connect to either USB-C or USB-A ports using USB 3.0, 3.1 Gen1/2 or 3.2 Gen1/2 – the differences in speed are minor as the SATA SSD becomes the bottleneck.
Unless you have a professional need for highest speed, devices like the Samsung T7 (or T5) provide fast secondary storage.
I have just used Samsung as examples. There are other equally good (and some not quite so good) brands.