The bottom rail on my Grandparents house had a Vee on top and the pickets/balusters were cut to sit on them. They were primed with lead paint and nailed with heavily galvanized nails. Heart pine. I know they have been there for over 60 years.
Tom's idea of a spacer is a good one, but it needs to be more than a washer. Technically it should be about 3/8" space. Water will find a way to bridge a gap smaller than that.
Last two rails I built used copper clad ground rod cut into 32" pieces for balusters. Treated wood for rails. It's holding up well.