DeeSa, keep an eye on that one - you shouldn't have responded really, that lets them know they have hit a real email account with their spam email. What you need to do now is to forward that email you received to Paypal's phishing report department, forward it to
[email protected], then they can tell you if it's genuine or not.
Paypal will never send you an email like that without is having some personal identifier on it. Do you already have a bank account registered with PayPal? - only they do like to have one as a backup if you are a regular user.
PayPal will look into it but it's hard to know what they can "do about it" - most of the phishing emails are generated from overseas.