I just noticed recently that Paypal.com offers a Money Market fund that allows you to earn a return on your paypal balance. The current 7 day average yield as of 7/2/2007 is 5.06%, which is not the best rate but still competitive, and better than 0% that most paypal accounts are earning.

There is no minimum balance required. PayPal’s Money Market Fund is managed by Barclays Global Investors, international experts who oversee over $1.50 USD trillion in global assets. You can take a look at the prospectus here (PDF). You can also access your account with the Paypal Debit Card.