Wash banana peppers thoroughly under cold water. Remove the stems and slice into 1/4-inch rings. For milder flavor, remove seeds and membranes.
Sanitize glass jars and lids by placing in boiling water for 5 minutes or running through a dishwasher sanitize cycle.
In a medium saucepan, combine vinegar, water, salt, sugar, and all seasonings (garlic, mustard seeds, celery seeds, turmeric, bay leaves, and peppercorns). Bring to a rolling boil, then reduce heat and simmer for 5 minutes.
Pack sanitized jars with pepper rings, leaving 1/2-inch headspace at the top.
Carefully pour the hot brine over the peppers, ensuring they're completely submerged while maintaining the 1/2-inch headspace. Tap the jars gently to release any trapped air bubbles, then seal with sanitized lids.
Allow jars to cool to room temperature before refrigerating. For optimal flavor development, refrigerate for at least 48 hours before enjoying.