Banter, chaff, kid, rag, rib, josh, jolly are comparable when denoting to make fun of good-naturedly (as by reminding one of an actual fault, foible, failure, or shortcoming, by exaggerated praise obviously remote from the truth, or by playful imputation of undeserved success).
The same distinctions in implications and connotations are found in their corresponding nouns.
Banter is the generic term and may usually be substituted for any of the others, though not without loss of specificness.
To chaff is to nettle with rough banter.
Kid is frequently as general in meaning as banter.
More often than perhaps any other word in this group, however, it specifically implies an attempt at good-natured imposition on one’s gullibility; thus, “No kidding?” is a common way of asking “Are you serious?” of one who has made a statement that sounds incredible.
Used with a reflexive pronoun, kid implies a shutting one’s eyes to the truth.
To rag is to banter repeatedly or persistently and often annoyingly to the victim.
Rib implies bantering under conditions which make it impossible or inadvisable for the butt to retort or defend himself and also may imply specifically the enactment of a role on the part of the ribber.
Josh and especially jolly imply transparent good humor in the funmaker.
Josh usually suggests homeliness and unsophistication.
Jolly often implies an ulterior aim such as putting the person bantered into good humor so that he will grant a favor.